Joint ventures, led by Parvis project, are key contributors
PROPERTY developer Ho Bee Investment's net profit for the first quarter ended March 31, 2010, rose to $41.7 million, an 11.8 per cent improvement from the same year-ago period.
The increase was due chiefly to a surge in share of profit of jointly controlled entities, from $1.9 million to $10.8 million, of which the joint-venture project Parvis at Holland Hill was the main contributor.
Group turnover for the first quarter of 2010 fell 16.1 per cent year on year to $92.4 million - primarily because of lower recognition of revenue from property development.
In Q1 2009, the group enjoyed higher revenue recognition as two projects, Vertis and Quinterra, obtained Temporary Occupation Permit in that period.
Ho Bee chairman and CEO Chua Thian Poh said the group has benefited from the economic recovery and strong property market sentiment.
'Our residential projects, Trilight, located at Newton Road, and the JV project with MCL Land, Parvis, at Holland Hill, have sold very well. The progressive recognition of income from the residential projects sold will be a significant contributor to the group's profitability for 2010,' he added.
In the first three months of this year, Ho Bee sold 198 residential units in various projects - Orange Grove Residences, The Orange Grove, Trilight, Parvis, Dakota Residences and Seascape. About 17 per cent of the group's 151-unit Seascape condo at Sentosa Cove was sold as at end-March this year, although this has since improved to 21 per cent.
Cash and cash equivalents shrank from $171.7 million at end-Dec 2009 to $52.4 million at end-March 2010 as the developer repaid term loans of $104.7 million and put a deposit for its stake for the purchase of a prime residential site in Shanghai's Qingpu district. Ho Bee has teamed up with Yanlord Land Group for the acquisition.
Ho Bee posted earnings per share of 5.66 cents in Q1 2010, higher than Q1 2009's EPS of 5.07 cents. Net asset value per share rose from $1.63 at end-Dec 2009 to $1.68 at end-March 2010.
The counter closed two cents higher at $1.66 on the stockmarket yesterday.
Source: Business Times, 30 Apr 2010