KepLand Revenue, Profit Hit Record

Source : The Business Times, January 30, 2008

FY2007: boost from residential sales and revaluation and restructuring surplus

KEPPEL Land's turnover crossed the billion-dollar mark in 2007 to hit a record $1.4 billion, a rise of 48.5 per cent from the previous year's $948 million.

The 12-month period ended Dec 31, 2007, saw profit after tax and minority interests (Patmi) more than trebled from $200.3 million to a record $779.7 million. This was bolstered by strong residential sales, a net gain on revaluation of investment properties of $343.6 million, and a rise of $100.5 million under an item which includes corporate restructuring surplus and enbloc property sales. The latter $100.5 million gain was after taking into consideration a $235.2 million surplus from the restructuring of its one-third interest in One Raffles Quay and $89 million in offsets to account for the diminution in value of the group's Myanmar hotels and the fall in the value of rupiah relating to its prior investments.

Full-year earnings per share came to 108.3 cents, up from 2006's 27.9 cents. Q4 Patmi rose from $81.2 million to $572.3 million while turnover climbed 8.6 per cent to $371.4 million.

Announcing its financial results yesterday, KepLand group CEO Kevin Wong also said that it was proposing a final one-tier dividend of 8 cents per share and a special dividend of 12 cents to 'reward shareholders for their support'. The proposed dividends amount to $144 million.

Patmi from property trading made up 35 per cent or $274.9 million of the total 2007 Patmi. Mr Wong said this was driven by profit contribution from Singapore developments including Marina Bay Residences, Reflections at Keppel Bay and Park Infinia at Wee Nam.

Contributions from overseas business made up 39.6 per cent while Singapore business contributed 60.4 per cent, up from 36.4 per cent in the previous year. For the year ahead, Mr Wong said that overseas contributions from residential properties will likely increase to about 50 per cent, in light of the weakening US economy. 'Our projects are mostly in China and Vietnam, and the subprime effect on these two countries will be less.'

He added that most of its development projects in these two countries were targeted at the mid- to high-end market which was supported by 'genuine buyers'. He also said the newly instituted capital gains tax in Vietnam should add stability to the market there. 'Demand for housing in these two countries is coming from a very low base,' he added.

In 2007, Keppel Land acquired eight residential sites in Vietnam with a total of 22,225 potential units for sale. Three developments are expected to be launched this year.

Other overseas launches for 2008 include a 1,000 unit residential development in Jeddah, Saudi Arabia, while two mega developments with over 8,000 units in Shanghai and Shenyang, China, is expected to be launched in 2009.

Mr Wong said it will continue to look for potential development sites and these will likely be in China, Vietnam and the Middle-East. Highlighting Keppel Land's low gearing of 0.41 per cent, and the possibility of borrowing to fund future acquisitions, he also said: 'We can gear up.'

At the end of the trading day yesterday, Keppel Land shares closed 2 cents higher at $6.45 per share.