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Published February 24, 2011

SC Global's Q4 profit jumps 72% to $57m

Developer proposes total dividend payout of 5 cents per share

By SIOW LI SEN


SC Global Developments has posted a net profit of $57.1 million for the fourth quarter, up 72 per cent mainly on account of higher margins and lower operating expenses.

For the full year, net profit was up 21/2 times to $144.2 million from $56.9 million.

Earnings per share were 150 per cent higher at 35.97 cents from 14.39 cents and net asset value per share was $1.56, up 29 per cent.

The luxury property developer has proposed more than tripling the total dividend payout to five cents from 1.5 cents previously.

The 2010 dividend will comprise a first and final dividend of two cents and a special dividend of three cents per share.

SC Global said based on yesterday's closing share price of $1.34, the payout gives a dividend yield of 3.8 per cent.

Group revenue for the fourth quarter of 2010 fell 17 per cent to $228.3 million due mainly to the decline in revenue from its Australian unit AVJennings (AVJ) as a result of the sale of its contract building operations in August 2010.

Contributions from progressive revenue recognition came from The Marq on Paterson Hill, Hilltops and Martin No. 38, the group's development projects in Shenyang, China, as well as AVJ.

Construction of its project Seven Palms, Sentosa Cove also progressed to the stage where its maiden revenue recognition was included in the quarter. In addition, revenue was also recognised from the sale of a super penthouse unit at The Boulevard Residence during the quarter.

Gross margin increased to 47 per cent as compared to 29 per cent last year due to improved margins in operations, particularly in Australia.

Total operating expenses were just $15.8 million as compared to $36 million previously, mainly due to lower headcount in AVJ following the sale of the contract building operations as well as lower sales and promotion expenses.

SC Global also updated its inventory, consisting mainly of development properties held for resale and under construction and land. Inventories stood at $2.45 billion as at Dec 31, 2010, as compared to $2.10 billion at end-2009.

Total financial liabilities were unchanged at $1.67 billion as at Dec 31, 2010. Current financial liabilities of $831.8 million comprised mainly of loans tied to development projects for which their maturity and the TOP of the development are expected within the next 12 months.

Its cash and cash equivalents stood at $199 million as at Dec 31, 2010, compared to $264 million as at Dec 31, 2009. The decrease was mainly due to repayment of reserve facilities, which were drawn to hold as additional liquidity since the fourth quarter of 2008 when the financial markets and credit environment became more volatile.

On the outlook following last month's property measures to address affordability concerns and to also weed out speculators in the market, it said 'genuine home buyers and long-term investors have been less directly affected by these measures.

'The group's business in Singapore has catered more towards these types of genuine home buyers and long-term investors who seek suitable high-end luxury residences befitting their particular lifestyle.'