http://www.straitstimes.com/archive/...falls-20150122

Keppel Land's revenue rises but profit falls

Economic conditions in core markets unlikely to improve much, says CEO

Published on Jan 22, 2015 1:17 AM

By Melissa Tan


PROPERTY developer Keppel Land warned of another challenging year yesterday as it posted gloomy fourth-quarter results.

Economic conditions in its core markets, Singapore and China, "are not expected to improve significantly", chief executive Ang Wee Gee said in a Singapore Exchange filing yesterday.

He said this as the firm's net profit for the three months to Dec 31 dived 21.6 per cent from the preceding year to $444.5 million. This happened despite a 39.5 per cent jump in revenue for the quarter to $705.4 million from the previous year.

Revenue rose on the back of higher turnover from its property trading and fund management segments, Keppel Land said in a statement. Property trading turnover climbed mainly due to Keppel Land's sale of Al Mada Towers in Jeddah, Saudi Arabia.

However, a lower fair value gain on investment properties hurt net profit. That figure came in at $220.2 million for the quarter, down 33.5 per cent from the previous year. Excluding that fair value gain on investment properties, Keppel Land's pre-tax profit increased a marginal 2.6 per cent to $309.5 million.

Mr Ang said this year would be "challenging", partly since Singapore's economy has been affected by an uneven global recovery and property cooling measures are "unlikely to be lifted soon". "However, we expect demand for well-located and well-planned residential projects, such as our Highline Residences, located in Tiong Bahru, to hold up better," he said.

Keppel Land moved 148 of the 500 units at Highline Residences by the end of last year after giving some discounts. In total, it sold 304 units worth $500 million last year, down from 370 units worth $850 million in 2013.

The group intends to expand its commercial property presence overseas, Mr Ang said, adding that the $1 billion in net proceeds from the properties it sold last year would help it "weather severe market downturn".

He added that it would continue to focus on Singapore, China, Indonesia and Vietnam but remained open to other markets.

Its commercial projects overseas include a Grade A office tower in Myanmar and an office tower in Vietnam. It has also bought a 75 per cent stake in Array Real Estate, which develops and manages retail space.

For the full year, the group's net profit fell 15.1 per cent to $752.5 million from the preceding 12 months, even though revenue grew 2.5 per cent to $1.5 billion. Earnings per share for the fourth quarter stood at 28.8 cents, down from 36.7 cents the previous year.

Net asset value per share rose from $4.52 as at Dec 31, 2013 to $4.95 as at Dec 31 last year.

The group proposed a final dividend of 14 cents per share for the full year, slightly higher than the 13 cents paid out last year.

Its shares closed at $3.65 on Tuesday, the highest since November 2013. Trading in Keppel Land was halted yesterday.

Both Keppel Land and its parent Keppel Corp have postponed their post-results analyst and media briefings until further notice.

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