Wednesday, April 22, 2009

BTO: KepLand Q1 profit slides 38.8% to $36.9m

Business Times - 23 Apr 2009

KepLand Q1 profit slides 38.8% to $36.9m

Factors: Completion of several trading projects and higher expenses



KEPPEL Land has posted a 38.8 per cent year-on-year drop in group net profit for the first quarter ended March 31, 2009, to $36.9 million.


Sales slipped 46.6 per cent over the same period to $145.7 million.


KepLand said that the smaller net profit in Q1 2009 was due largely to the completion of several trading projects, higher net finance cost and administrative expenses. Staff compensation rose from $18.9 million in Q1 2008 to $22.3 million because of higher staff count.


Profit after tax and minority interest (Patmi) from property trading fell 35.3 per cent year-on-year to $31.7 million in Q1 2009. The drop came despite higher profit contribution from Marina Bay Residences and Reflections at Keppel Bay, because the pace of home sales slowed and profit contribution ceased with the completion of several residential projects.


Patmi from property investment rose 24.7 per cent to $9.6 million in Q1, on the back of higher rental income from Singapore and Vietnam, as well as a higher share of profit from K-Reit Asia. The group's fund management business achieved a 9.5 per cent rise in Patmi to $4.6 million, due mainly to higher fee income from Alpha Investment Partners.


Earnings per share fell from 8.4 cents in Q1 2008 to 5.1 cents in Q1 2009. Annualised return on equity declined from 10.4 per cent to 6 per cent over the same period. KepLand's net debt/equity ratio stood at 0.52 time as at end-Q1 2009, unchanged from three months earlier but higher than the 0.43 time as at end-Q1 2008.


KepLand said that its gearing is not expected to exceed 1.0 time over the next two years. As at end-March 2009, about 17 per cent of the group's borrowings was on fixed interest basis. For Q1 2009, the group's net cost of funds was 2.44 per cent. The group had a cash balance of $627 million as at end-March 2009 and unutilised credit facilities of $1.8 billion.


Occupancy at KepLand's office buildings at 94.6 per cent in Q1 2009 was lower than 95.4 per cent in Q4 2008


In the Singapore residential sector, the group has managed to sell so far this year 15 units at Park Infinia at Wee Nam at about $1,200 psf and also 15 units at The Tressor at Duchess Road for about $1,300 psf.


Kepland said that postponing the construction of Marina Bay Suites and Madison Residences will mean deferral of capital expenditure for construction of about $140 million. As well the group stands to reap cost savings due to falling construction costs.


The group has a 652,205 sq ft attributable residential land bank in Singapore, which can be developed into slightly more than 2,000 homes .


Singapore accounted for 74.5 per cent of KepLand's Q1 2009 net earnings, higher than a 71.3 per cent share in the same year-ago period.


Net tangible asset per share rose from $3.39 as at Dec 31, 2008 to $3.50 as at March 31, 2009. On the stock market yesterday, the counter ended three cents lower at $1.76.

There will be no dividend for Q1 2009.

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