Ho Bee profit soars to record $69m for Q1

May 8, 2007

SELL-OUT SENTOSA HOMES

Ho Bee earns record $69m in first quarter


A BET on exclusive seafront living on Sentosa is paying off handsomely for property developer Ho Bee Group.

The company yesterday posted a record quarterly profit of $69.1 million, more than five times the $13.2 million earned last year.

Sell-out projects at Sentosa Cove, particularly the latest condominium, The Coast, triggered a jump in revenues of almost the same magnitude. Sales for the three months ended March 31 hit a high of $245.8 million, 4.7 times the $52.8 million recorded a year ago.

'Many of our properties have been extremely well received by the market and almost all our developments are fully sold,' said chairman and chief executive Chua Thian Poh.

Ho Bee set the stage for its current windfall just over three years ago when it won the first tender of residential land parcels in Sentosa Cove.

Since then, it has gone on to buy and develop more plots, becoming the biggest player in the prestigious enclave. The company has so far launched five projects in Sentosa Cove, three of which are fully sold.

Looking ahead, Mr Chua said Ho Bee's financial performance will significantly surpass that of last year as the property market outlook remains bright.

Earnings per share jumped to 9.37 cents from 2.13 cents. Net asset value per share was 81.3 cents, up from 67.9 cents.

BRYAN LEE

Published May 8, 2007

Ho Bee profit soars to record $69m for Q1

By KALPANA RASHIWALA


HO BEE Investment, the listed developer offering the biggest property exposure to Sentosa Cove, yesterday posted record first-quarter group net profit of $69.1 million, up from $13.2 million a year ago. It also said it expects full-year 2007 earnings to 'surpass significantly' those of 2006.

For the year ended Dec 31, 2006, the group achieved record net earnings of $98.6 million, an improvement of 158.9 per cent.

The group is planning to launch two high-end condos in the second half of this year - a 92-unit condo on the Waterfront Collection site at Sentosa Cove and a 72-unit project along Orange Grove Road. Ho Bee said yesterday it is confident that these developments will be as well received as similar earlier projects in these locations.

The substantial progressive recognition of income from the sale of projects already launched - such as The Coast, Coral Island and Paradise Island - is expected to boost the group's full-year 2007 performance. The Coral Island villas at Sentosa Cove are expected to be completed by the third quarter of this year.

Group revenue for the first quarter ended March 31, 2007, jumped 365.7 per cent to $245.8 million. Ho Bee said income recognition from The Coast condo at Sentosa Cove was the main contributor to the marked increase in its performance.

Other residential projects contributing to Q1 revenue included Montview at Mount Sinai, Quinterra at Holland Road, Vertis at Amber Gardens, and Coral Island and Paradise Island on Sentosa Cove.

Most of the projects the group has launched, including The Berth, Berthside, The Coast, Montview, Vertis and Quinterra, are fully sold. Orange Grove Residences is 77 per cent sold, achieving average prices above $2,000 psf. Only one villa at Coral Island and one at Paradise Island have yet to be sold.

First quarter earnings per share jumped to 9.37 cents from 2.13 cents a year ago. Net asset value per share increased from 67.9 cents as at Dec 31, 2006, to 81.3 cents as at March 31, 2007, an increase of nearly 20 per cent. In its news release yesterday, Ho Bee said it has a positive net working capital of $740.6 million.

Industry observers note that Ho Bee has risen from a low-profile developer to the biggest player in the upscale waterfront housing locale of Sentosa Cove, and it has proven its ability to clinch choice sites outside Sentosa Cove, such as Elmira Heights at Newton Road.

BT reported last month that the Elmira Heights acquisition has boosted the developer's residential land bank to about 730,000 sq ft. This can be developed into about 1.4 million sq ft gross floor area.