http://www.straitstimes.com/Money/St...ry_724152.html

GuocoLand posts $12.8m quarterly loss

Published on Oct 17, 2011


DEVELOPER GuocoLand has unexpectedly reversed into the red. It reported a net loss of $12.8 million in the first quarter compared to a profit of $40.9 million in the same period last year. Revenue for the three months ended Sept 30 fell by 55 per cent to $108.5 million.

In the previous corresponding period, revenue was attributable mainly to the sale and completion of an office block in Shanghai. However, for its latest quarter, revenue recognition was derived mainly from the progressive recognition of the group's Elliot at The East Coast and Goodwood Residence projects.

Sale of units in Tianjin Seasons Park, as well as Goodwood Residence units that were sold under the deferred payment scheme, were not recognised as revenue in the first quarter due to the adoption of a new accounting standard.

GuocoLand began selling Goodwood Residence - a 210-unit luxury condominium development in Bukit Timah Road - in December 2007 when a Kuwait bank fund agreed to buy 97 units in a bulk purchase. However, the deal failed to go through after the fund allowed its purchase option to lapse. As of August, 128 units have been sold.

An unrealised mark-to-market loss on derivative financial instruments of $16.7 million in the current quarter recognised under other expenses was mostly offset by a foreign exchange gain in its underlying asset, recognised under other income.

Finance costs increased from $5.5 million to $9.3 million due mainly to higher borrowings. Loss per share amounted to 1.16 cents, reversing from earnings of 4.59 cents previously, while net asset value per share firmed by 10 cents to $2.26.

Looking ahead, GuocoLand said government measures to curb property speculation in Singapore and China continue to dampen buying sentiment although prices appear to be relatively stable.

'On the global front, as a result of euro zone and US debt issues, the global economic outlook is uncertain. However the board is confident of the group's prospects for the year.'

GuocoLand shares last Friday ended four cents higher at $1.89. The shares are down 27 per cent so far this year.