Ho Bee Q4 Net Falls 24%

Source : The Business Times, February 28, 2008

HO Bee Investment, the biggest developer on Sentosa Cove, has posted a 24.2 per cent year-on-year drop in net earnings.

For the fourth quarter ended Dec 31 it made $38.8 million, a reduction attributed to lower property development revenue and profit.

The comparable period Q4 2006 saw the group's top and bottom lines helped by the physical completion of The Berth condo.

Ho Bee did manage to achieve a record full-year net profit of $272.2 million, up 176.1 per cent from 2006, due to a sharp rise in revenue from property development, mostly from progressive recognition of revenue from the group's projects on Sentosa Cove.

Also boosting the full-year bottom line was an $83.3 million gain in fair value of investment properties, mainly from office space that Ho Bee owns at Samsung Hub and Suntec City, and the group's industrial properties.

Ho Bee acknowledged that demand for high-end residential property has dropped as foreign and local investors have become more cautious.

However, for Ho Bee, the substantial progressive recognition of income from the sale of residential projects and the expected launch of new residential projects will be a significant contributor to the group's revenue and earnings for the current year ending December 2008 as well as the next two years.

Ho Bee is likely to launch this year the 150-unit Trilights on the Elmira Heights site at Newton Road, the 348-unit Dakota Residence (a joint development with ChoiceHomes Investments) and the 151-unit Seascape on the Seaview Collection plot at Sentosa Cove.

Ho Bee is also expected to launch a 72-unit condo, The Orange Grove, this year.

The group may also release a 184-unit condo on the Holland Hill Mansions site in the second half of this year in a joint venture with MCL Land.

The group's joint-venture condo on the Pinnacle Collection parcel at Sentosa Cove could be launched in the first six months of next year.

Ho Bee shareholders will receive a two-cent per share (one-tier) final dividend.

Revenue for Q4 eased 63 per cent to $60.7 million while full-year revenue rose 51.7 per cent to $596.1 million. Most of the increase came from a 51 per cent jump in revenue from property development.

The improved showing was chiefly due to the progressive recognition of revenue from Ho Bee's three Sentosa Cove projects, the Coral Island development, The Coast and Paradise Island, as well as Orange Grove Residences, Montview at Mount Sinai Road and Quinterra at Holland Road.

Ho Bee has yet to book revenue for Turquoise condo at Sentosa Cove as construction has yet to begin.