GuocoLand profit almost doubles in Q3

Higher contribution from China projects; absence of $24.6m forex loss also helps


GUOCOLAND posted a net profit of $9.5 million for the third quarter ended March 31, 2010, almost twice that of $4.9 million a year earlier.


This was mainly due to higher profit contribution from property development projects in China, GuocoLand said, adding: 'Gross profit, however, decreased by 15 per cent to $29.3 million for the third quarter. Revenue and cost of sales were also lower at $107.6 million and $78.2 million respectively. The decrease was mainly due to lower contribution from property development projects in Singapore.'

Also helping the Q3 results was the absence this time round of a $24.6 million net foreign exchange loss it incurred in the year-ago period. For Q3, the property developer's revenue fell 15 per cent to $107.6 million from $126.1 million.

For the first nine months ended March 31, 2010, GuocoLand's net profit rose to $82.3 million from $2.93 million in the same year-ago period. Revenue increased 52 per cent to $567 million from $373.8 million. Gross profit also doubled to $174.2 million from $86.5 million.

On the higher profit contribution from China property development projects, GuocoLand cited in particular Ascot Park in Nanjing and Changfeng project in Shanghai. Ascot Park, a 1,112-unit development, is fully sold. The group has also sold an office block and about 76 per cent of its small office home office (Soho) units in the Changfeng project.

The nine-month performance was also helped by the absence this time round of a $46.7 million net foreign exchange loss it registered for the year-ago comparative period.

On current developments, the group said that in Singapore it launched Sophia Residence and Elliot at the East Coast in the third quarter of 2009. To-date, Sophia Residence is almost fully sold and Elliot has achieved strong sales of more than 85 per cent. Construction at both developments has already begun.

The group also soft-launched Goodwood Residence in March 2010. The freehold 210-unit development, situated just off the prime Orchard-Scotts area, is now 53 per cent sold.

The property developer's cash and cash equivalents rose to $688.4 million at end-March 2010 from $488.9 million a year earlier. Its Q3 earnings per share increased to 1.15 cents from 0.60 cents in the same year-ago period. Net asset value (NAV) was $2.33 as at end-March 2010.

'With the continued improvement in the global economies, strong momentum in residential property sales was observed, especially in Singapore and China,' GuocoLand said.

On the stock market yesterday, GuocoLand closed seven cents lower at $2.29.

Source: Business Times, 24 Apr 2010