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Published October 21, 2010

KepLand's Q3 profit falls 11% to $70.1m

By UMA SHANKARI


KEPPEL Land (KepLand) yesterday reported an 11 per cent drop in third-quarter net profit to $70.1 million on lower revenue from property sales.

KepLand, Singapore's third-largest property group by market capitalisation, posted earnings of $78.5 million for Q3 last year.

It said in a statement yesterday that recent government measures to cool the residential market in Singapore, announced on Aug 30, have begun to have an impact.

Official estimates suggest the rise in private residential prices moderated from 5 per cent in Q2 this year to 3 per cent in Q3 while home sales fell to around 3,700 units from 4,033.

Despite this, KepLand, which has sold more than 170 homes in Singapore this year - mainly at its upmarket Reflections at Keppel Bay and Marina Bay Suites developments - intends to go ahead with a planned launch.

'There is demand for homes in good locations and the group plans to launch its Lakeside Drive project by end-2010,' it said.

The group's Q3 revenue fell 35 per cent to $149.2 million, from $227.8 million in Q3 2009.

The decline was due to lower revenue from property trading, property investment, hotels and resorts and property services, which was partly offset by higher revenue from funds management.

Among other things, income was hit by the absence of revenue recognition for Sixth Avenue Residences in Singapore, which were completed and fully sold at end-2009.

In contrast, KepLand's overseas projects continue to perform well. It has sold 3,200 overseas homes so far this year, mostly in China. Plans are in the pipeline to launch new units at 8 Park Avenue in Shanghai and the first eco-homes at Seasons Park in Tianjin Eco-City in Q4.

To strengthen the focus on China, wholly owned subsidiary Keppel Land China will own and operate the group's properties there and pursue growth opportunities. KepLand China has recently acquired two prime sites in Chengdu.

KepLand's earnings per share fell to 4.9 cents in Q3, from 6.8 cents a year ago.

KepLand's counter fell nine cents or 2 per cent to $4.50 yesterday on concern that a surprise interest rate rise in China could hit demand for property there

The cost of buying property in China is expected to increase with the rate hike, which analysts say could dampen sales.