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Published February 25, 2011

Ho Bee's Q4 earnings surge 168% to $115.6m

By JERMAINE NG


THANKS to higher turnover and gains from investment properties, Ho Bee Investment achieved a 168.3 per cent surge in fourth-quarter net profit to $115.6 million, from $43.1 million a year earlier.

Revenue for the three months ended Dec 31, 2010 rose 13 per cent year on year to $112.1 million, from $99.2 million. The property group attributed this mainly to higher recognition of revenue from development projects. Turnover for this segment rose 13 per cent to $104.1 million as a result of the completion of The Orange Grove project in December.

The quarter also saw a net gain of $30.2 million from the sale of investment properties: TG Building, Frontech Centre and four floors of office space at Samsung Hub.

Also significant was a fair-value gain on investment properties of $52.5 million.

Earnings per share (EPS) for the quarter climbed to 15.7 cents per share, from 5.9 cents a year earlier.

The record tourist arrivals in Singapore also helped the group keep room occupancy at above 80 per cent, with revenue staying unchanged at $1.9 million.

The group expects the recent government anti-speculative measures to have a more dampening impact on transaction volumes and prices in the residential property sector.

For 2011, Ho Bee expects group earnings to remain positive.

'The group will be launching the sale of strata high-tech industrial units at 1 Pemimpin Drive in March this year,' said Chua Thian Poh, chairman & CEO of the Ho Bee Group. 'Further, Seascape, the group's joint-venture residential project in Sentosa Cove, is expected to obtain Temporary Occupation Permit (TOP) at the end of this month.'

Two other developments - Parvis and Trilight - are expected to receive TOP in the second half of 2012.

FY 2010 full-year net profit attributable to shareholders dipped 8.5 per cent to $308.4 million. Revenue dropped 53.5 per cent to $539 million because of the exceptionally high revenue recognition of development properties in 2009.

Boosting the results were fair-value gains and gains from sale of investment properties totalling $98.1 million. It also had a share of profits of $51.6 million from jointly controlled entities, against a loss of $48.5 million in FY 2009.

Full-year earnings per share was at 41.9 cents, down from FY 2009's 45.8 cents. The group proposed a final dividend of three cents per share. At the interim stage, it paid one cent.

Ho Bee shares closed trading yesterday at $1.31, down one cent. Its group net asset value was $2.01 at end-2010.