KepLand to launch two projects soon

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Published July 23, 2009

Keppel Land Q2 net profit rises 10.4%

Property group will speed up launches as market recovers in S'pore and region

By EMILYN YAP


KEPPEL Land - which reported a 10.4 per cent year-on-year rise in second-quarter earnings yesterday - says it will speed up launches in Singapore and the region as the property market picks up.

'With improved market sentiment, we plan to launch Madison Residences and The Promont in the second half of 2009,' said group CEO Kevin Wong at a briefing. They will debut in 1-2 months' time at market prices, which are hard to fix now because prices can move very quickly nowadays, he added.

For the second quarter ended June 30, Keppel Land posted a net profit of $58.2 million - up 10.4 per cent from a year ago. This was driven by a 34.4 per cent increase in sales to $249.9 million.

Reflecting the recent upturn in the property sector, Keppel Land's performance was markedly better than it was a quarter ago. Its Q2 net profit was 57.7 per cent higher than that in Q1, boosted by a 60.3 per cent higher contribution from property trading.

These contributions came from local and overseas residential projects. Here, Marina Bay Residences, The Sixth Avenue Residences and The Tresor were some which did well. Also, Park Infinia at Wee Nam is almost fully sold. Buyers took up 26 units there from January to June at about $1,400 per square foot on average - some $500 psf more than when the project was launched in Q2 2005.

Keppel Land is still holding back on the Marina Bay Suites project and may launch it if the market improves further.

Keppel Land also sold over 1,440 units in China in the first half of the year and resumed sales at The Estella in Vietnam. The company will accelerate project launches in both countries.

Besides property trading, property investment also improved from the previous quarter, by 5.2 per cent. This came on the back of higher rental income from Singapore and a greater share of profit from K-Reit Asia.

Keppel Land noted that the office leasing market has become more active as the economy stabilises. Pre-lease negotiations have also begun for Ocean Financial Centre, and more leasing enquiries have come in for Phases One and Two at Marina Bay Financial Centre, which have pre-commitment rates of around 66 and 55 per cent respectively.

In contrast, earnings from fund management fell from Q1 while hotels, resorts and other businesses registered a small loss.

Keppel Land's private fund management vehicle Alpha Investment Partners runs a few funds. Its Alpha Asia Macro Trends Fund raised $1.7 billion and has invested around 11 per cent of this. The portfolio includes a retail property in Tokyo.

As at June 30, Keppel Land's net debt-to-equity ratio stood at 0.23. This fell from 0.54 a year ago after the company undertook a rights issue in April, raising gross proceeds of some $707 million.

Supported by a cash position of around $1.2 billion, Keppel Land said that its property development and fund management divisions are actively looking to acquire assets.

Keppel Land's first half results were dragged by weak performance in Q1. For the half year ended June 30, net profit was $95.1 million, down 15.8 per cent from a year ago. Sales fell 13.8 per cent to $395.6 million. The company did not declare a dividend for the period.

In its best showing in more than a month, the counter yesterday gained five cents to close at $2.54.

http://www.straitstimes.com/Money/St...ry_406812.html

July 23, 2009 Thursday

KepLand to launch two projects soon

Bukit Timah, Cairnhill Circle projects to cash in on market optimism

By Jessica Cheam


TWO new residential projects will soon be launched by property developer Keppel Land (KepLand) in an indication of the rebound in market sentiment.

The firm has yet to launch any residential projects this year, unlike other developers which have launched projects week after week in recent months to capitalise on the new-found optimism.

KepLand said yesterday it will be launching luxury projects Madison Residences in Bukit Timah and The Promont at Cairnhill Circle in the next two months.

This comes only four months after it made the decision to defer the construction of Madison Residences in March, citing weak market conditions.

The Promont is due for completion this year, said the firm.

Group chief executive Kevin Wong said yesterday at its financial results briefing that as markets in the region improve, 'we will accelerate our project launches in Singapore, China and Vietnam to achieve faster returns'.

The firm posted a 10.4 per cent increase in net profit to $58.2 million for the three months ended June 30, compared to the same quarter last year.

Revenue came in at $250 million for the second quarter, up 34.4 per cent from a year ago due to progressive sales from launched projects in Singapore such as Park Infinia at Wee Nam and The Tresor at Duchess Road.

Keppel Land's growing footprint overseas also helped to boost turnover, as sales from projects in China and Indonesia were registered.

Overseas earnings accounted for 30 per cent of net profit, compared to 18 per cent for the same quarter last year, said KepLand.

The firm is determined to expand its presence in China, recently announcing its proposal to delist Evergro, a China-focused property group, to merge both entities.

It had offered 29 cents per share - a 16 per cent premium over Evergro's last traded share price of 25 cents on the Friday before the announcement.

Shareholders can also opt for one new Keppel Land share for every seven Evergro shares they own. This plan will allow KepLand to 'tap on combined operational expertise, industry knowledge and extensive networks' for expansion in China, said Mr Wong.

KepLand had raised some $708 million in a fully subscribed, nine-for-10 rights issue at $1.09 a share in June.

This has improved the firm's borrowing position, and it is now looking for land to buy, said its finance chief Lim Kei Hin.

For the first half of this year, net profit was down 15.8 per cent at $95.1 million from the same period last year because of poorer first-quarter sales arising from lower revenue recognition for projects in Singapore and overseas.

Overall, turnover was down 13.8 per cent at $395.6 million compared to the first half of last year.

Earnings per share for the half-year ended June 30 was 8.2 cents, down from 11.1 cents previously.

Net asset value per share stood at $2.29 as at June 30, compared to $3.39 as of Dec 31, 2008.

Keppel Land shares closed five cents up at $2.54 yesterday.

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