Roxy-Pacific to launch 2 condos; Q4 profit doubles

http://www.businesstimes.com.sg/sub/...09540,00.html?

Published February 19, 2010

Roxy-Pacific to launch 2 condos; Q4 profit doubles

By NISHA RAMCHANDANI


PROPERTY and hospitality group Roxy-Pacific Holdings expects to launch two residential projects - in Haig and Tembeling roads - by the end of the second quarter or early Q3.

'We've started to replenish our landbank through the acquisition of six plots for residential development,' the company's chairman and chief executive Teo Hong Lim said yesterday. 'Land cost is moving on the high side. We'll continue to search for opportunities but we won't be as aggressive in land acquisition for the next half-year.'

However, the group plans to expand its hotel business. 'This is an interesting turning point for the hotel industry,' said Mr Teo, pointing to the opening of the integrated resorts (IRs). A few months back, Roxy bid for a hotel site in New Bridge Road but did not win the tender.

The group yesterday reported its Q4 and full-year 2009 results. Q4 net profit more than doubled year on year to $5.9 million, as group revenue rose 47 per cent to $44.1 million on stronger contributions from property development and property investment.

Property development, which accounted for about 75 per cent of group revenue, jumped 87 per cent to $33.5 million, due to revenue recognition from nine projects.

Revenue from property investment surged 114 per cent, due to the recognition of rent from Kovan Centre and a higher rental yield from Roxy Square.

Q4 revenue from the hotel business slid 16 per cent to $9.9 million, as the Grand Mercure Roxy Hotel reported lower average room rates (ARR) and average occupancy rates (AOR) amid a weak economic environment.

For the full year, ARR sank 27 per cent to $147. AOR was more robust at 86.2 per cent, marginally lower than the 88 per cent in 2008. Full-year group net profit rose 13 per cent to $27.9 million, as revenue jumped 26 per cent to $163.5 million.

Roxy has proposed a final dividend of one cent per share, subject to shareholders' approval at the annual general meeting on March 31, to be paid on April 23.

On the outlook this year, Mr Teo said: 'We see sustainable growth for the property segment in 2010 as optimism returns with the completion of the two IRs and a recovering global economy, which should draw well-heeled foreign buyers back to the Singapore property market.'

Roxy's stock closed 1.6 per cent lower at 30 cents yesterday.