http://www.businesstimes.com.sg/prem...5273m-20130124

Published January 24, 2013

KepLand's Q4 profit falls 55.4% to $527.3m

Drop caused by absence of disposal gain and sharp fall in fair value gain

By Mindy Tan


THE volume of home sales may fall but developers here have holding power, said Keppel Land yesterday, as it announced weaker fourth-quarter and full-year results.

For the three months ended December, Keppel Land reported a net profit of $527.3 million, a 55.4 per cent drop from the restated $1.2 billion reported a year ago.

This was largely due to the absence of a gain of $480.3 million from selling a stake in Ocean Financial Centre in the same quarter last year. "The net fair value gain on investment properties/impairment of $373.5 million in 4Q2012 was also lower than the $591.3 million recorded in 4Q2011," said Keppel Land.

Net profit before divestment and revaluation gains was $157.1 million, 40 per cent higher year on year.

Revenue for the quarter rose 25.8 per cent to $471.9 million, due primarily to higher revenue from the property trading segment ($120.6 million), partly offset by lower revenues from the property investment segment ($12.8 million) and fund management segment ($7.9 million).

According to Keppel Land chief executive Ang Wee Gee, the latest round of cooling measures is good for property developers as "the stringent cooling measures . . . will prevent asset bubbles from forming and support the sustained and healthy development of (the) market".

He added: "We believe that volumes will come down quite a bit. But developers generally are financially quite strong and some of them purchased sites at very high prices so their cost is quite high.

"Factors (including) high liquidity, low interest rates, and a population that is still growing are fundamentals that will support the market. So we may see prices consolidate, but not undergo a major correction."

Keppel Land is in the midst of designing its residential site at New Upper Changi Road, with design work at an advanced stage for Keppel Bay Plot 3, added Mr Ang. "We will monitor the market closely for a suitable time to launch these two well-located projects."

Meanwhile, the developer sold about 430 residential units in Singapore in 2012, mainly from The Luxurie in Sengkang, which is now 99 per cent sold.

Overseas, the company sold about 1,920 units, with about 730 units recorded in the fourth quarter alone. China achieved better sales with about 1,650 units sold compared with about 1,400 the previous year. Sales were mostly from The Springdale in Shanghai and new phases of the group's townships The Botanica in Chengdu and Central Park City in Wuxi.

This year, the group intends to launch for sale slightly over 2,000 units from existing projects. New sale launches this year include high-rise apartments in Panchenggang and landed homes at Mumashan in Chengdu, and condominiums at Nanxiang.

For the full year, Keppel Land's net profit was $838.4 million, down 39 per cent. Earnings per share were 55.5 cents, down 40.8 per cent. Excluding divestment and revaluation gains, net profit for the year was 61.4 per cent higher at $451.5 million. Revenue was $938.9 million, a dip of 1.1 per cent.

The board has recommended a final dividend of 12 cents per share.

Keppel Land gained five cents yesterday to close at $4.06 before the results were announced.