http://www.businesstimes.com.sg/arch...s-73m-20131115

Published November 15, 2013

Ho Bee Q3 profit dives to $7.3m

By Kalpana Rashiwala [email protected]


HO Bee Land is expecting to book a substantial fair-value gain for The Metropolis project in Singapore's One-North area this quarter. The property group said this yesterday as it posted a 76.7 per cent slide in third-quarter net profit to $7.3 million due to lower revenue from property development.

The Metropolis' Tower 2 received Temporary Occupation Permit (TOP) earlier this week while Tower 1 received the same approval in July this year. To date, more than 90 per cent of the space in the development has been pre-committed.

Beyond producing the expected revaluation gain in Ho Bee's next earnings statement, The Metropolis will generate a recurring rental income stream for the group. The process has started to show in Ho Bee's Q3 financial statement, with rental income from Tower 1, as well as from the group's Rose Court office development in London acquired in June this year, helping to boost the group's turnover from property investment for Q3 and the first nine months of 2013 by 200 per cent and 60 per cent to $7.8 million and $13.3 million respectively.

However, revenue from property development for Q3 2013 slumped 84 per cent year-on-year to $8.5 million. For the nine-month period too, development revenue was down 69 per cent at $69.9 million from $228.4 million previously. This was chiefly due to higher revenue recognition last year for the One Pemimpin industrial project, when it was completed.

In all, Ho Bee's revenue from continuing operations slipped 71.1 per cent to $16.3 million for Q3 this year from $56.3 million a year ago.

For the first nine months, Ho Bee posted net profit of $85.7 million, reflecting a drop of 28.7 per cent. Revenue from continuing operations decreased 64.9 per cent to $83.1 million.

Third-quarter earnings per share fell to 1.1 cents from 4.5 cents previously.

Ho Bee's net asset value per share rose to $2.70 as at end-September 2013 from $2.58 as at end-December 2012.

Net gearing rose marginally to 0.19 at end-September from 0.17 at end-December 2012.

The counter closed one cent higher yesterday at $2.02. Ho Bee announced its results after the stock market closed.