Source : The Business Times, August 23, 2008
PROPERTY developer GuocoLand's earnings for the full year ended June 30 fell 43 per cent as it saw lower sales from its property development projects in Singapore and a one-third fall in other income.
Net profit attributable to equity-holders fell to $161.84 million from FY2007's $281.89 million. Earnings per share dropped to 20.17 cents from 46.15 cents.
Revenue for the 12 months dipped 4 per cent to $670.9 million, from $702.5 million a year ago. Gross profit fell 12 per cent to $135.3 million.
The bottom line was also hit by a $63.9 million or 33 per cent fall in other income to $130.8 million. This came as interest income and net foreign exchange gains were more than wiped out by lower revaluation gain from investment properties and lower investment property provision writeback.
The group was also hit by higher income tax, mainly from its property development projects in China.
Finance costs also rose 22 per cent to $39.4 million due to higher bank borrowings and interest rates.
GuocoLand - which has operations in Singapore, China, Malaysia and Vietnam - did not provide separate numbers for its fourth quarter.
The group acknowledged that the property markets in the countries where it operates are slowing down as developers and buyers adopt a more cautious stance. But in the medium term, it expects these countries' economies to remain resilient and grow.
'Coupled with the implementation of regulatory measures and macro-economic policies to control inflation and prevent overheating of the economy and property markets, the attraction of Asia as a growth region should have positive effects on the demand for quality housing in these countries,' GuocoLand said in a filing to the Singapore Exchange.
For Singapore, the cautious sentiment in the property market is evidenced by a slowdown and delay in property launches and a lower take-up rate compared to 2007, GuocoLand noted. But the ongoing development and subsequent completion of the two integrated resorts and the Marina Bay Financial Centre should help economic growth in the next few years, the developer added.
GuocoLand also said that it has increased its inventories from $1.6 billion to $4.5 billion over the past year, mainly due to an increase in its land bank. Among other purchases, the company completed its en bloc acquisitions of Sophia Court, Palm Beach Garden, Leedon Heights and Toho Garden condominiums in Singapore.
GuocoLand shares lost six cents to close at a 52-week low of $2.06 yesterday. The stock has shed 63.5 per cent so far this year.
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