http://www.businesstimes.com.sg/comp...1-net-earnings

Property development boosts Sim Lian's Q1 net earnings

Group profit more than doubles to S$77m; company sees continued challenge in private residential market

By Kalpana Rashiwala

[email protected]@KalpanaBT

11 Nov


STRONG revenue booking from property development projects helped Sim Lian Group to more than double net earnings to S$71.66 million for the first quarter ended Sept 30, 2014 from S$27.68 million in the year-ago period.

Group revenue jumped to S$379.02 million from S$151.17 million.

Revenue from property development more than doubled to S$297.23 million from S$107.15 million previously.

The construction division's revenue rose 87 per cent to S$68.88 million, due mainly to increase in percentage of work done.

Property investment revenue improved to S$5.68 million from S$202,000.

Earnings per share climbed to 7.1 Singapore cents from 2.8 cents previously.

Net asset value per share stood at S$1.05 at Sept 30, 2014, up from from 98 cents as at June 30, 2014.

The counter shed two cents in Monday trading to end at 84.5 Singapore cents.

Sim Lian, which announced its results after the stock market closed, said in its results statement: "The group expects to achieve a set of profitable operating results for FY2015."

It added, however that it expected the operating environment for the private residential property market to continue to be challenging, with the past rounds of property cooling measures and the total debt servicing ratio framework, rolled out in late June 2013, in place.

"The group... Group is focused on building a stable base of recurring income to smoothen fluctuating profits from property development... ."

In Australia, the group completed its A$65.3 million purchase of a freehold office building at 50 Margaret Street in Sydney in September 2013. It also completed its A$133 million purchase of a portfolio of five neighbourhood shopping centres in Queensland, Victoria and New South Wales and some vacant land this year. The shopping centre portfolio was acquired from supermarket chain Woolworths, which has taken long-term leases at the neighbourhood malls.

In Singapore, the group expects to receive Temporary Occupation Permit in FY2015 ending June 30 for two 99-year private condo projects - Parc Vera in Hougang Avenue 7 and A Treasure Trove in Punggol, the latter a joint venture project - as well as for the Tampines Trilliant executive condo (EC) development.

At a state tender that closed in September, the group clinched a site in Choa Chu Kang Drive for an EC development. Its S$361.08 per square foot per plot ratio winning bid was slightly ahead of market expectations.

Located about 550m from Choa Chu Kang MRT station and bus interchange and Lot One shopping mall, the site attracted eight bids.