http://www.businesstimes.com.sg/arch...-net-profit-88

Published July 19, 2012

KepLand Q2 net profit up 88%

By michelle tan


HELPED by the strong performance of its associated companies, Keppel Land yesterday reported a surge in second-quarter earnings.

The property group recorded an 88 per cent increase in net profit for the three months ended June 30, 2012, to $94.7 million from $50.5 million a year earlier.

The group's gross profit climbed 24.8 per cent to $55.8 million as turnover for the period rose 25 per cent to $130.3 million, driven mainly by the group's better performing property trading, fund management, and hotels and resorts segments. A Q2 pick-up in overseas residential sales in projects, such as Jakarta Garden City in Indonesia and Phase 6 of The Botanica in Chengdu, also helped shore up revenue. Notably, Jakarta Garden City saw strong take-up for its units, with over 95 per cent of its 1,060 units launched sold as at end-June.

But pre-tax profits surged 88 per cent year-on-year to $109 million. This came as profit contributions from associated companies - mainly Reflections at Keppel Bay and K-Reit Asia - soared $46.4 million or 40.8 per cent to $79.4 million.

The group also saw greater contributions from its hotels and resorts operations, driven mainly by improved performances from Hotel Sedona Yangon in Myanmar and Spring City Resort in Kunming, China.

In the first half of the fiscal year, Keppel Land registered a 35 per cent decline in revenue to $300.5 million due to lower takings from some of its segments. Its Singapore and overseas operations posted lower revenues, falling $72.3 million and $89.3 million respectively.

However, despite the lower topline, H1 pre-tax profit of $288.1 million outperformed last year's takings by 62.8 per cent, due mainly to a better performance by its associated companies and higher contributions from its fund management and hotels and resorts segments.

H1 net profit was 77 per cent higher than last year's at $236.6 million.

Keppel Land continues to be in a strong cash position of $1.6 billion. Gearing also remains healthy with a net debt-to-equity ratio of 0.19, leaving the group with adequate debt headroom for its acquisition plans.

CEO Kevin Wong said the company will be expanding in the region with the acquisition of a site in Colombo, Sri Lanka and has entered into a joint venture with a local developer to build a 260-unit residential development there.

The group has also since started construction on the International Financial Centre Jakarta Tower 2 in the city's central business district to tap growing demand for investment-grade offices there.

Yesterday, the counter closed 2 cents higher at $3.39.