Wing Tai's Q4 Net Slumps 60%

Source : The Business Times, August 27, 2008

Home sellers seen unlikely to resort to fire-sale - at least until 2010

PROPERTY group Wing Tai Holdings yesterday said that net profit for its fourth quarter fell by more than half as it sold fewer homes and saw lower fair value gains from investment properties.

At the same time, chairman Cheng Wai Keung, known for his often candid assessments of the property market, said that while home prices could see some adjustment in 2008 and 2009, sellers are unlikely to have a 'fire sale' of their properties - at least until 2010.

This is because home prices in Singapore started climbing rapidly only in 2006 and 2007, and buyers of these newer properties will see the projects completed only from 2010 onwards. The push to offload their units will happen only then, he said.

The company's net profit for the three months ended June 30 fell 60 per cent to $96.3 million, from $243.2 million a year ago. Fair value gains on investment properties dropped to $90.6 million from $189 million.

Revenue for the fourth quarter fell 57 per cent to $107.3 million, down from $249.1 million in Q4 2007. Among other projects, revenue was contributed by units sold in The Riverine by the Park in Singapore.

Earnings per share fell to 12.45 cents, from 33.83 cents a year ago.

Wing Tai has declared a dividend of six cents a share, comprising a first and final dividend of three cents and a special dividend of three cents.

For the entire 2008 financial year, Wing Tai reported that net profit fell some 40 per cent to $229.4 million, from $381.8 million in FY2007.

Revenue for the 12 months fell 56 per cent to $428.2 million, from $981.6 million a year ago.

Wing Tai said in a filing to the Singapore Exchange that the underlying fundamentals of the property market are still sound.

'I have always believed that property is actually a reflection of the fundamental strength of the economy,' said Mr Cheng. However, sentiment has a part to play too, he admitted.

Wing Tai sold some 205 units in Singapore during the financial year, although the majority of units were sold in the last six months of 2007.

The company has some 1.4 million square feet in its residential land bank, but no new launches are planned for the moment, Mr Cheng said.