http://www.businesstimes.com.sg/arch...1-net-20130501

Published May 01, 2013

Tuan Sing posts 15% drop in Q1 net

By Felda Chay


LOWER development property sales led Tuan Sing Holdings Ltd to report a 15 per cent fall in net profit for its first quarter.

The group said yesterday that net profit for the three months ended March 31, 2013, fell to $5.8 million from $6.8 million a year ago. In turn, earnings per share fell to 0.5 cent from 0.6 cent a year ago.

Revenue declined 10 per cent to $64.9 million from $72 million last year.

Tuan Sing noted in its financial statement that global economic uncertainties and policies that could be enacted to further regulate the property markets in Singapore and China - both markets it operates in - will continue to affect market sentiment.

But it is "cautiously optimistic of achieving satisfactory operational performance before fair value adjustments for the year 2013", it added.

The company will be launching its 52-unit Cluny Park Residence in the second quarter of the year, and will be devoting more resources to the redevelopment of Robinson Towers.

Construction at Robinson Towers is expected to start in the third quarter of the year.

Said Tuan Sing: "When completed in 2016, the new building would be a platform for future growth of the group's property investment and contribute recurring income for the group."

It added that it has sold about 500 units at Seletar Park Residence and Sennett Residence, which together have 608 units. The relevant revenue and earnings will be progressively recognised in tandem with the progress of their construction.

The group, which also has hotel investments through its 50 per cent stake in Grand Hotel Group (GHG) - which owns the Grand Hyatt Melbourne and Hyatt Regency Perth - said that the favourable business conditions in Australia last year have not been replicated this year.

Room rates are therefore under pressure, particularly for hotels in Perth. "However, the group expects the outlook for Australia's hotel sector to remain stable."

For Q1, GHG posted revenue of A$32.4 million ($41.3 million), which Tuan Sing said was comparable to the same period last year. The combined revenue per available room (RevPar) reported by Grand Hyatt Melbourne and Hyatt Regency Perth edged up one per cent due to higher occupancy rate, which offset the impact of lower average room rates.

Net property income decreased 4 per cent to A$10.6 million due to lower contribution from the hotel operations.

At end-March, Tuan Sing's net asset value was 62.2 cents, compared with 60.9 cents in December last year.

Its shares closed 2.7 per cent lower at 36 cents yesterday.