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Published April 20, 2011

Keppel Land Q1 profit up 46% on sales surge

By UMA SHANKARI


KEPPEL Land reported a 46 per cent climb in first-quarter net profit to $92.1 million - from $63.3 million a year ago - as the group booked more revenue from homes sales in Singapore.

Earnings were lifted by higher contributions from the group's property trading unit, a greater share of profit from listed office trust K-Reit Asia and a $24.4 million gain on the divestment of the group's interest in Keppel Digihub.

Revenue for the quarter ended March 31, 2010, climbed to $357.9 million, up 236 per cent from $106.5 million for the previous corresponding period. The jump was largely due to revenue recognised for the company's Elita Promenade in Bangalore, India, upon the project's completion in March 2011.

Sales at The Lakefront Residences in Singapore, which was launched in November 2010, also boosted the top line. Keppel Land sold 85 homes in the first quarter, mainly at The Lakefront Residences.

Higher revenue was also recognised for Madison Residences in Singapore as a result of a higher percentage of physical completion achieved.

Earnings per share rose to 6.3 cents from 4.4 cents.

Keppel Land, which is the property arm of the Keppel Corp conglomerate, said in a statement that government measures have moderated home sales in Singapore.

'Singapore's latest round of property measures, announced in January 2011 to curb speculation, have started to take effect,' Keppel Land said. But the outlook for the residential property market remains positive supported by stable economic growth and job market, the company added.

Overseas, homes remain in demand, Keppel Land said. The company sold about 360 units overseas this quarter.

'Despite cautious market sentiment as a result of the recent cooling measures and a seasonally quiet first quarter for property sales, township homes in China remain in demand,' Keppel Land said.

In Singapore, the group intends to launch a 622-unit residential project near Sengkang MRT by the end of the year. Keppel Land won the site in a government tender in March 2011.

And in China, 'subject to market conditions', the group plans to soft-launch The Seasons, a new township in Shenyang, in 2011. New phases of 8 Park Avenue and The Springdale in Shanghai, The Botanica in Chengdu as well as Seasons Park in Tianjin Eco-city, will also be gradually rolled out this year.

The developer also intends to launch a new waterfront township development in Ho Chi Minh City in Vietnam this year.

Keppel Land shares lost one cent to close at $4.36 yesterday.