BTO: Allgreen Q1 revenue dips but profit jumps 67.5%

Business Times - 29 Apr 2009

Allgreen Q1 revenue dips but profit jumps 67.5%

By KALPANA RASHIWALA

 

ALLGREEN Properties has posted a 67.5 per cent increase in first quarter net profit to $29.2 million from the same year-ago period, despite lower turnover.

 

The improved bottomline was due chiefly to an increase in other operating income (largely because of translation gains on foreign currency loans and deposits) and a decrease in distribution and selling expenses, as showflat expenses were lower amidst the subdued property market this year.

 

The Singapore-listed property unit of Malaysian tycoon Robert Kuok said revenue for Q1 ended March 31, 2009, slipped 8.1 per cent year on year to $80.7 million chiefly due to lower revenue from development properties and hotel operations.

 

'In the development properties segment, lower revenue was a result of lower progress sales recognition. In the hotel segment, lower revenue was a result of lower room rates and occupancy at Traders Hotel as compared with the corresponding period in 2008,' Allgreen said.

 

The developer said that it expects to remain profitable for 2009, barring unforeseen circumstances and excluding fair value adjustment. Earnings will be underpinned from past sales of residential units and steady income from investment properties.

 

Allgreen owns Great World City at Kim Seng Road, comprising offices, shop space and serviced residences; Tanglin Mall, Tanglin Place and a majority stake in Traders Hotel near Orchard Road.

 

It currently has some 400-plus Singapore residential units in the market, BT understands. These include terrace homes in various phases of its Pavilion Park landed estate in Bukit Batok and units in the completed Balestier condo D'Lotus (priced at about $800 psf) and Viva condo along Thomson Road. All three projects are freehold.

 

The developer is expected to receive Temporary Occupation Permit later this year for the 97-unit Cairnhill Residences, which is fully sold. Allgreen has sold the units at an average price of about $1,700 psf, and about 40 per cent of buyers - predominantly with Singapore addresses - bought on deferred payment scheme, BT understands.

 

Over in the Bukit Timah area, Allgreen is developing Cascadia, where it sold 162 units to private equity property fund management group MGPA at a median price of $1,527 psf in 2007, according to an earlier report.

 

In its results statement last night, Allgreen said that gearing improved slightly to 0.43 time (with net borrowings of $1.116 billion) as at end-March 2009, from 0.45 time gearing (and net borrowings of $1.138 billion as at end-Dec 2008).

 

Earnings per share rose from 1.10 cents in Q1 2008 to 1.84 cents in Q1 2009. Net asset value per share rose from $1.41 as at Dec 31, 2008 to $1.44 as at March 31, 2009. On the stockmarket yesterday, the counter ended 2.5 cents lower at 48 cents.