Tuan Sing’s Earnings Up 92% For ‘07

Source : The Business Times, February 6, 2008

PROPERTY group Tuan Sing Holdings yesterday announced an almost doubling of full-year earnings, thanks to the strong Singapore property market, contributions from its Australian hotels and fair value gains from investment properties .

The company chalked up full-year attributable earnings of $151.1 million for the year ended Dec 31, 2007, a 92 per cent leap from 2006’s $78.7 million.

This was despite the previous year’s earnings being boosted by a deconsolidation gain of $37.5 million after Gul Technologies Singapore Ltd became an associate.

Topline revenue dipped 12 per cent to $322.1 million due to a fall in turnover on its industrial services division, SP Corp. However, its property and hospitality turnover hit new highs.

Property generated revenue of $49.8 million against $17.8 million a year ago, thanks to the strong property sales and higher rental income from the group’s investment properties . The segment recorded a profit after tax of $97.8 million, compared to $38.4 million in 2006, much of it from a net gain on the fair valuation of investment properties of $84.6 million in 2007 (compared with $39.6 million in FY2006).

Tuan Sing’s property division’s profit contributed about 64 per cent of the group’s total profit for 2007.

Its Australia-based Grand Hotel Group (GHG) chalked up a profit of $74.8 million, including the group’s share of the fair value gain on GHG’s assets portfolio. After deducting takeover charges, investment costs and provision for deferred tax, Tuan Sing’s investment in GHG generated a net profit of $51.0 million, representing about 34 per cent of the group’s total profit for the year.

Tuan Sing’s retail business, centred around TS Planet Sports Pte Ltd, which owns 60 per cent of golf products distributor Pan-West, recorded a 17 per cent rise in revenue to $63.4 million and a net profit of $1.4 million.

Looking forward, Tuan Sing said the strong FY2007 performance and improved balance sheets would enable it to further broaden its earning bases and position itself to continue with its pursuit to improve future growth and profitability. But it warned of greater uncertainty arising from the US sub-prime woes and the slowdown of the US economy.

Meanwhile, the group is said to be seeking suitable partners to redevelop its prime commercial property centred around Robinson Towers and two adjoining buildings in the Robinson Road-Maxwell Street area.

Together, this ‘island’ of three properties has a total built-up plot ratio of 10 times, comprising a total floor area of some 12,500 sq m, or some 134,000 sq ft. Tuan Sing’s valuation of these properties , done two years ago, was $154 million.

Property insiders reckon that this cluster could be worth well over $300 million in current market conditions.

The latest record high profits boosted its earnings per share to 13.3 cents, from 6.9 cents, while net asset backing per share rose to 38.4 cents from 22.5 cents a year ago.

Annualised return on equity improved to 44 per cent from 36 per cent in FY2006.