Wednesday, May 27, 2009

BTO: Bukit Sembawang posts $61.4m Q4 loss

Business Times - 23 May 2009

Bukit Sembawang posts $61.4m Q4 loss

Net loss due mainly to a $70m provision for foreseeable losses for its Fairways residential project



BUKIT Sembawang Estates has posted a $61.4 million net loss for the fourth quarter ended March 31, 2009, against a $3.5 million net profit in the same year-ago period.


The red ink flowed mainly from a $70 million provision for foreseeable losses for its Fairways residential project at Telok Blangah as a result of the weakening property market, the company said in its results statement yesterday.


Q4 saw an $8.7 million gain on disposal of available-for-sale financial assets.


For the year ended March 31, Bukit Sembawang posted a $48.4 million net loss, against a net profit of $74.9 million in the preceding year.


Besides the $70 million provision for the Fairways site, the weaker full-year bottomline was due to the absence of a one-time capital gain arising from the sale of HSBC shares in the previous year; reduced development profit recognised on Mimosa Terrace projects in the latest period; and the suspension of capitalisation of borrowing costs, property tax and other development costs on certain development projects, which have been deferred.


Last month, the group issued a profit warning that it expected to report a loss for the year ended March 31, and that this will be due primarily to the recognition of an allowance for foreseeable losses for a development project as a result of the weakening property market.


It did not identify the project, although some analysts had surmised it was the Fairways property. It bought the freehold plot for $785 psf per plot ratio in 2007 during the en bloc sale bull run.


Looking ahead, Bukit Sembawang said that it has launched the marketing of Verdure at Holland Road, where already 90 per cent of the apartment units have been sold.


'We will also continue to market the landed properties in Seletar Hills and Sembawang areas in the current financial year. However, profit from property development based on the percentage of completion method will be determined by the progress of construction of development projects,' the group noted in its results statement.


'Parc Mondrian and Paterson Suites will be completed after the financial year ending March 31, 2010 and the units of the other development projects to be sold will be in the early stage of construction,' it added.


The group is proposing a two cents per share final cash dividend based on the enlarged issued capital base following the rights issue last month.


Revenue for Q4 ended March 31, 2009, slipped 59.1 per cent to $4.9 million, due mainly to reduced development revenue recognised (based on percentage of completion method) on Mimosa Terrace projects.


Full-year revenue fell 17.2 per cent to $62.6 million.


The group's net asset value per share stood at $3.77 as at March 31, 2009, down from $4.53 a year earlier.


The stock closed four cents higher at $3.10 yesterday.


The group raised $245.7 million net proceeds from its recent rights issue.

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