SC Global Q4 earnings down 46% at $4.2m

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Published February 25, 2009

SC Global Q4 earnings down 46% at $4.2m

By UMA SHANKARI


BOUTIQUE property group SC Global Developments reported a 46 per cent drop in Q4 earnings as it booked a loss on its share of results from its Australian unit.

It also announced a $30 million write-off as it made an allowance for foreseeable losses for two development sites at Ardmore Park and Sentosa Cove. SC Global continues to progress with planning and design for the two sites.

Net profit for the quarter ended Dec 31, 2008 fell to $4.2 million, from $7.8 million a year earlier. The fall was despite a 149 per cent jump in revenue to $28 million, from $11.3 million in Q4 2007.

Q4 earnings per share fell to 1.07 cents, from 1.97 cents a year earlier. SC Global declared no dividend payout for the quarter. Last year, the company paid two cents per share.

SC Global's share of results from Australian subsidiary AVJennings (AVJ) declined to a loss of $5.9 million in Q4 2008, compared with a gain of $1.7 million in the same quarter last year. AVJ recently reported an interim after-tax loss of A$9.7 million (S$9.6 million) for the six months ended Dec 31, 2008, compared with an interim after-tax profit of A$6.1 million in the previous corresponding period. Excluding AVJ's results, net profit for Q4 would have climbed 31 per cent to $10.2 million, SC Global noted.

Turnover for the quarter comprised mainly revenue recognition of units in development projects, namely The Marq on Paterson Hill, Hilltops and Kairong International Gardens in Shenyang, China. Although SC Global achieved strong sales from the launch of its Martin No 38 project in Q3 2008, construction is not yet at a stage where revenue can be recognised for these sales.

For full-year 2008, SC Global's net profit rose 57 per cent to $44.5 million, from $28.3 million in 2007. Revenue remained flat at $129 million.

The company's net debt to equity ratio was reduced to 2.8 times at end-2008, from 3.2 times at end-2007.

SC Global chief executive Simon Cheong said that despite the short-term decline in AVJ's performance, AVJ has recently strengthened its operations and management team - including the appointment of a new chief executive - and has embarked on initiatives to better position itself for the medium to long term.

He also said SC Global has increased efficiency in response to current economic conditions, and continues to be 'focused on its core long-term business and the delivery of products of the highest quality and standards for its customers'.

SC Global shares lost one cent to close at 40 cents yesterday.