Friday, August 15, 2008

Banyan Tree Q2 Profit Rises 10% To $3.5m

Source : The Business Times, August 15, 2008

BANYAN Tree Holdings yesterday said that second-quarter net profit rose 10 per cent as it sold more of its luxury-branded hotel residences.

Earnings for the three months ended June 30, 2008 climbed to $3.5 million, from $3.2 million a year ago.

Revenue rose 28 per cent to $106.4 million in Q2 2008 from $83 million for the same three months in 2007. Turnover was boosted by the hotel residences segment but offset by lower revenue from its hotel investment division, Banyan Tree said.

Contribution from hotel residences rose more than ninefold to $33.2 million on higher sales and revenue recognition of the group's villas, townhomes and suites at Banyan Tree Phuket, Banyan Tree Lijiang, Dusit Laguna and Banyan Tree Bangkok.

However, turnover from the hotel investment segment fell 13 per cent, mainly due to lower revenue from Laguna Phuket, which was hit by lower business from the meetings, incentives, conference and exhibitions (MICE) segment.

Earnings per share for Q2 2008 rose to 0.46 cents, from 0.42 cents a year ago.

For the first half of 2008, Banyan Tree's net profit rose 32 per cent to $18.9 million. Turnover for the six months rose 27 per cent to $239 million.

Looking ahead, Banyan Tree is 'cautiously optimistic' that its prospects remain broadly positive despite the current global economic slowdown and costlier air travel resulting from higher fuel prices.

The company is particularly upbeat about its branded hotel residences.

In H1 2008, Banyan Tree sold 62 units worth some $90.6 million, compared to 38 units in the first six months of 2007.

'Including units sold in 2007, we have a total of S$95.6 million unrecognised revenue as at June 30, 2008 . . . and we will be progressively recognising revenue on percentage of completion basis as construction progresses in 2008,' the company said.

In 2008, revenue from property sales is expected to surpass last year's, Banyan Tree said.

Banyan Tree's shares closed two cents down at $1.19 yesterday. The stock price has shed 42 per cent this year.

Property Firms Report Weak Set Of Q2 Numbers

Source : The Business Times, August 15, 2008

Most developers see their business hit in 3rd and 4th quarters

HIT by fewer home sales, lower revaluation gains from investment properties, drops in divestment gains - and even the stronger Singapore dollar - property companies largely reported weak results for the second quarter.

And the future doesn't look rosy either.

Most listed developers have warned that the global slowdown and weakening market could hit their business in the third and fourth quarters. Even the most upbeat are only 'cautiously optimistic'.

The big three developers - CapitaLand, City Developments and Keppel Land - all posted lower profits for Q2.

CapitaLand, Singapore's and South-east Asia's largest developer, said its Q2 profit fell 43.5 per cent to $515.2 million, partly due to lower revaluation gains from investment properties, lower portfolio gains and development profits, and the absence of previous write-back provisions. Analysts called the results disappointing.

City Developments saw Q2 net profit drop 15.1 per cent to $165.2 million. Among other factors, CityDev was hurt by the translation of its overseas hotels earnings at weakening exchange rates due to the strengthening Singapore dollar.

Keppel Land reported that Q2 profit fell 16.4 per cent to $52.7 million as it sold fewer homes in Singapore and abroad.

'I think the mood is generally very cautious, and this has hurt the developers,' said an analyst. 'The trend is likely to continue for the rest of the year.'

Right now, the fear is that sectors that are currently contributing strongly to top lines, such as hospitality, may soon start to weaken.

The Ministry of Trade and Industry's latest quarterly economic survey showed there are increasing signs that segments within services - including the retail trade and hotels - are showing slower growth.

Property stocks with exposure to those sectors - such as CapitaLand, CityDev and UOL Group, to name just a few - could see contributions from those divisions drop.

For UOL, for example, a 4 per cent increase in Q2 in revenue was due largely to hotel operations, with its hotels in Singapore, Australia and Vietnam performing better.

As for the residential market here, Citigroup has said prices of luxury homes could correct sharply, which could have a negative impact on some developers.

'Scrapping of the deferred payment scheme and tighter bank financing for investment properties may have also hurt property transactions, which are off some 70 per cent from recent highs,' Citi noted in a recent report. 'Some developers may have also over-committed in terms of land purchases during the boom periods.'

Citi analyst Wendy Koh expects a 20-30 per cent price correction for high-end properties from their recent peak, and reckons the mid-tier is likely to decline 10-20 per cent.

US Slowdown Could Be Lengthy: Fed's Stern

Source : The Business Times, August 15, 2008

THREE FORKS (Montana) - Minneapolis Federal Reserve Bank President Gary Stern said on Thursday the United States could see modest economic growth and rising joblessness for some time, while inflation should ease.

Mr Stern, the Fed's current longest-serving district president, also offered a framework for reform of financial institutions to hold back the ever-expanding safety net for large firms.

A few weeks ago Mr Stern was among a number of Fed speakers who seemed anxious for the central bank to start raising interest rates to head off an inflation threat.

On Thursday, though, Mr Stern, a voting member of the policy-setting Federal Open Market Committee in 2008, seemed more at ease with the outlook for prices, and also wary that the US slowdown could be prolonged.

Mr Stern did not specifically address the interest rate outlook, but said that 'a diminution of inflation, absent a resurgence in energy and other commodity prices' is likely.

Speaking to local business leaders in Three Forks, Montana, Mr Stern said the economic slowdown in the early 1990s 'remains a valuable guide,' with a pattern suggesting it could be one to three years before the United States returns to robust growth.

'I'm not predicting that, but I can't rule it out,' Stern said in answer to questions from the audience.

Mr Stern's comments were seen as consistent with the view in financial markets that the FOMC will hold benchmark lending rates steady at 2 per cent at least through year-end.

'Clearly, these are not the words of a man intent on hiking interest rates anytime soon,' said Michael Feroli, US economist at JP Morgan Economics.

Mr Stern said the US economy was in better shape on several measures when it entered the current slowdown than it was in the early 1990s.

Credit markets will 'inevitably' pick up, but for now 'a variety of potential borrowers are finding funding more difficult and expensive to obtain,' he said.

Meanwhile, the downturn in the housing market continues and the run-up in energy and other commodity prices 'has taken a toll on consumer discretionary spending,' he added.

Earlier on Thursday, the government reported that US consumer prices in the 12 months to July jumped at the fastest pace in 17 years, led by rises in the cost of energy and food.

Oil prices, however, have begun to decline recently, and fell further on Thursday. Prices across a range of commodities have also tumbled over the past month.

Stern said the Fed looks at both headline and core inflation, because each has a comparative advantage in answering different questions about the economy.

Core measures, which exclude often volatile food and energy prices, give 'a better picture of underlying inflation,' while headline figures give a better read on the issues facing consumer spending, he said.

Taking on 'too big to fail'
Mr Stern devoted much of his remarks to outlining potential regulatory steps in the wake of a year's worth of actions by the Fed, the Treasury and other agencies to cope with the global credit and banking crisis.

Mr Stern, the Fed's 9th District president, has long been a critic of the ever-expanding safety net for large financial firms.

Actions taken over the past year were 'appropriate' but also point out the need for enhanced supervision to 'reduce the likelihood of full protection of uninsured creditors of large, complex financial institutions,' he said.

Mr Stern outlined an approach that he termed 'systemic-focused supervision,' centred on stress testing, enhanced and prompt corrective action, and communication.

'These efforts offer important actions in a long-term effort to limit the spillovers from the failure or impairment of a systemically important financial institution,' he said.

Mr Stern said that as part of a prompt correction action regime, banks whose capital falls below a given level might have their ability to pay dividends constrained, and chartering authorities could shut banks whose capital falls below an even lower trigger.

'Closing banks while they still have positive capital, or at least a small loss, can reduce spillovers in a fairly direct way,' he said. -- REUTERS

City Developments Posts 3% Rise In H1 Net Profit To S$330m

Source : Channel NewsAsia, 14 August 2008

Singapore property developer City Developments remains positive about its outlook - despite the global economic slowdown.

It has booked a 3 per cent increase in first-half earnings to S$330.1 million, and announced plans for a S$1 billion Islamic bond sale to boost its war chest.

The hotel business is one bright spark for City Developments. It is the second biggest contributor to the company's pre-tax profits.

According to City Developments, its average revenue per available room in Singapore jumped by 33 per cent in the first half this year, compared to a year ago.

This is expected to come down a little due to slowing visitor arrivals and the global economic slowdown. However, City Developments has reasons to stay positive.

Kwek Leng Beng, executive chairman, City Developments, said: "I think, certainly, pricing power has been reduced considerably. With the financial woes around the world, especially for financial institutions, they are not going to pay high prices to stay in a hotel.

"So the majority of our hotels are four-star, so we have the benefit. If you can't stay in a five-star (hotel), you go to the next level."

The group noted that the global economy's slowdown has affected the Singapore property market, but it believes that longer term fundamentals remain strong.

It is still looking for the best time to launch its two luxury residential projects in the second half of this year.

Outside Singapore, City Developments is looking at emerging markets like Vietnam, where inflation and interest rates are coming off their highs.

Mr Kwek said: "When it comes down... normally it will come down a little first. Then you will have fire sales, that's the right time to buy. We have all the options - buy a completed building, which is not many to come buy, or raw land to build, or buy a hotel but that's not many."

City Developments has operations across the globe, including China, Thailand and the UK. - CNA/ms

高档房产价虽下调 城市发展不会削价卖

Source :《联合早报》Aug 15, 2008






城市发展表示,会在下半年推出莉雅苑第二期的200个单位、升涛湾Sentosa Quayside的100个单位和汤申路The Arte的100个单位,总计400个单位。至于价格和什么时候推出,则将视市场情况而定。

但Quayside和The Arte虽还未推出市场销售,建筑工程已展开。郭令明表示,那是因为集团为这两个项目争取到合理的建筑费,因此先动工。



集团的清风雅筑(Shelford Suites)取得的平均售价,则介于每平方英尺1500至1600元。






Source :《联合早报》Aug 15, 2008