Source : The Business Times, October 31, 2008
Earnings dragged down by lower contributions from associated, JV firms
WING Tai Holdings yesterday said that its first-quarter profit fell 47 per cent to $32.6 million - from $61.8 million a year ago - as it saw lower profit contributions from associated and joint-venture companies.
Earnings per share fell to 4.13 cents, from 8.58 cents for the corresponding three months in 2007.
Floridian: Wing Tai's first-quarter revenue climbed 34% due mainly to the higher contributions from the development properties division
For the first quarter ended Sept 30, 2008, revenue climbed 34 per cent to $134.3 million, from $100.2 million in the previous corresponding period. This increase is mainly attributable to the higher contributions from the development properties division, Wing Tai said.
Revenue for the current period came largely from the units sold in Helios Residences and The Riverine by the Park in Singapore, and Sering Ukay in Malaysia.
Profits recognised from these projects also contributed to the increase in the group's operating profit from $15 million to $41.1 million, an increase of 174 per cent.
However, Wing Tai's share of profits of associated and joint-venture companies fell by 88 per cent to $7.8 million in Q1 due to the substantially lower profit recognition from the sale of residential units in VisionCrest and USI Holdings.
Looking ahead, Wing Tai said demand for properties is expected to slow down with the slower economic growth and weaker market sentiment. In a filing to the Singapore Exchange, it said: 'The group will continue to monitor the market closely and will exercise prudent management to ride through these difficult times.'
Wing Tai, like many other Singapore developers, has been reluctant to cut selling prices to entice buying - except when it comes to Floridian, its joint-venture project with Far East.
As at end-September, Wing Tai had only soft-launched the high-end Belle Vue, selling six units at a median price of $2,044 per square foot.
As at Sept 30, 2008, Wing Tai's net gearing ratio was 0.4 times and it has no loan maturing in Singapore for the next 12 months, the developer said.
Wing Tai shares gained 5 cents to close at 60 cents yesterday. The stock has lost 77.8 per cent so far this year. The developer has been supporting its share price through its share buyback programme since late last year.
'Since November 2007, a total of 6.96 million shares have been bought back by the company for a total of $11.34 million, or $1.63 a share on average,' Morgan Stanley analysts noted on Oct 24. Management can be expected to continue buying back shares, the analysts said.
Wing Tai has also been steadily increasing its stake in its associate company USI Holdings in the last month or so. Yesterday, Wing Tai said that it has once again increased its shareholding in USI from 34.809 per cent to 34.831 per cent.
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