KepLand's Q2 Net Profit Increases 42.2% to $63m

Source : The Business Times, July 25, 2007

Developer sees contributions from high-profile projects like MBR

KEPPEL Land, Singapore's third-largest developer by asset size, yesterday said that net profit for the second quarter ended June 30, rose 42.2 per cent to $63.0 million - from $44.3 million a year ago - as it saw contributions from high-profile projects Marina Bay Residences (MBR) and Reflections at Keppel Bay.





Mr Wong: 'We believe that both prices and rents will continue to move up in the near future'




Turnover for the three months rose 55.1 per cent to $359.2 million, from $231.6 million a year ago.

KepLand said that profit for the first half jumped 55.7 per cent to $125.5 million. Turnover for the first six months of the year climbed 86.8 per cent to $654.6 million.

No dividend was declared for the period.

For the first half of 2007, the company drew 37.7 per cent of its net profit from overseas, down from 65.1 per cent in the same six months in 2006.

KepLand sold about 600 homes in Singapore in the first half of the year, a jump of more than 50 per cent over the number of units sold a year earlier.

For the rest of 2007 and 2008, another 558 units could be launched, the developer said yesterday. The 250 homes in phase two of MBR could be put on the market as early as the end of this year, said KepLand managing director Kevin Wong.

Another big project that investors will be watching is Reflections at Keppel Bay, where another 151 units will be launched.

Mr Wong remains upbeat about the prospects of the residential property market in Singapore. 'We see that there is strong demand (for homes), while the supply is steady,' he said. 'We believe that both prices and rents will continue to move up in the near future.'

Prices for homes in Singapore have climbed 13.1 per cent since the start of the year, official data show.

Similarly, KepLand expects its office portfolio to continue performing strongly. Mr Wong said that capital values and office rents here can be expected to continue their steady increase.

Citigroup analyst Wendy Koh said that KepLand's second-quarter results are in line with market expectations, but below her estimates.

'We have lowered 2007 full-year earnings estimates by 7 per cent to reflect slower-than-expected sales at the Reflections at Keppel Bay,' Ms Koh said.

So far, 97 per cent of the 493 apartments launched have been sold at the development, but the project has some 1,129 units in all. Citigroup is maintaining its 'buy' call and target price of $10.25 on the stock.

Shares of Keppel Land rose 15 cents - or 1.8 per cent - to close at $8.70 today. The stock has advanced 26 per cent since the start of this year.