STI: Keppel Land net profit down 39%

April 23, 2009

Keppel Land net profit down 39%

WEAKER home sales have hit Keppel Land's earnings hard, sending its first-quarter net profit tumbling 38.8 per cent to $36.9 million.

 

Revenue suffered even more, plunging 46.6 per cent to $145.7 million.

 

Contributions from overseas accounted for 25.5 per cent of its net profit in the quarter, down from 28.7 per cent a year ago.

 

Its lower property trading profit contribution was partly mitigated by higher earnings from property investment and fund management activities.

 

Developers are facing challenging times, as the global downturn has hit housing demand in Singapore and in the region.

 

Keppel Land said yesterday that it would continue to monitor all major risks affecting it and 'take the necessary actions to mitigate or eliminate them'.

 

To conserve cash, the developer will defer or phase its developments to manage capital requirements and maximise project returns. It has already postponed the construction of Marina Bay Suites and Madison Residences in Singapore.

 

Keppel Land also announced yesterday that it had sold 15 units of its completed condo Park Infinia at Wee Nam this year at $1,200 per sq ft (psf), as well as 15 units of The Tresor at Duchess Road at about $1,300 psf.

 

For a large part of last year, Park Infinia was transacted at around $1,300 psf to $1,600, while The Tresor registered deals of up to $1,842 psf last year, according to caveats lodged.

 

A flash estimate from the Government showed that private home prices in Singapore fell 13.8 per cent in the first quarter.

 

In the office market, where rents are fast falling, occupancy of Keppel Land's office buildings has slipped slightly to 94.6 per cent, though it has achieved higher portfolio rent.

 

The entire Marina Bay Financial Centre is 61 per cent pre-committed.

 

In its overseas markets, Keppel Land said it saw improving sales in China but slower sales in Vietnam, Indonesia and India due to market uncertainties.

 

Earnings per share was 5.1 cents, down from 8.4 cents a year ago, while net asset value per share was $3.50, up from $3.39 at the end of last year.

 

Keppel Land shares closed three cents lower at $1.76 yesterday.