http://www.straitstimes.com/archive/...ofits-20140731

Tuan Sing reports 24% drop in Q2 net profits

Published on Jul 31, 2014 1:06 AM

By Melissa Tan


A SLOWDOWN in the private housing market weighed down second-quarter earnings for property developer Tuan Sing, it reported yesterday.

Tuan Sing develops projects such as Sennett Residence in Potong Pasir and Cluny Park Residence in Bukit Timah.

It posted a 24-per-cent drop in net profit to $11.6 million while revenue for the three months to June 30 dropped 31 per cent to $81.6 million.

Tuan Sing said the decline in revenue was partly due to lower property sales but was cushioned by rental income from Robinson Point.

The group's earnings mainly came from progressive recognition of unit sales at Seletar Park Residence and Sennett Residence, as well as the initial recognition of new bookings at Cluny Park Residence.

Tuan Sing said these three private projects will account for most of its earnings this year and the next.

Property developers typically use the "progressive recognition" accounting method for domestic residential projects. This involves splitting up and recognising profits from a project over the period as construction progresses.

Net profit slid 8 per cent in the first half to $19.3 million and revenue fell 22 per cent to $142.9 million.

Earnings per share for the quarter stood at one cent, down from 1.3 cents the previous year. Net asset value per share rose from 63.9 cents as at Dec 31 last year to 65.1 cents as at June 30 this year.

The firm also said that it has bought a plot in China and is negotiating to buy the remaining 50-per-cent stake in hotel firm Grand Hotel Group, it said.

It already owns half of Grand Hotel Group, which owns two five-star hotels in Australia that are managed by Hyatt International.

These hotels are the Grand Hyatt Melbourne and Hyatt Regency Perth.

Tuan Sing also said yesterday that it is " not averse" to selling its stakes in printed circuit board maker Gul Technologies Singapore and in golf products retailer Pan-West "when opportunities arise".

It owns 43.3 per cent of GulTech and 49 per cent of Pan-West.

Tuan Sing shares closed flat at 41.5 cents yesterday.

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