Published May 9, 2008

Ho Bee Q1 net earnings dive 62% to $26.1m

Sharp drop in property development revenue


HO BEE Investment yesterday reported a 62 per cent plunge in net earnings for the first quarter ended March 31, 2008, to $26.1 million, from $69.1 million in Q1 2007. Earnings per share were 3.54 cents, down from 9.37 cents the year before. Revenue was $94.2 million, a 62 per cent fall from $245.8 million a year earlier.

The drop in group turnover was largely due to lower recognition of revenue from property development project The Coast at Sentosa Cove.

The Coast project recognised revenue of $26.5 million in Q1 2008, down from $209 million in Q1 2007. This was the main reason for property development revenue falling 64 per cent to $88 million.

Turnover on property investment fared better, driven by higher rental income from office units at Samsung Hub and industrial buildings at HB Centre II and One Tannery Road. At $4.1 million, it was almost 2.6 times that of the $1.6 million recorded last year.

Ho Bee saw strong overall occupancy rates and increasing rents for its investment properties in Q1.

Room and cafe revenue from its hotel operation also did well, rising 71 per cent to $2.1 million.

Sounding a note of caution, Ho Bee said: 'The global economic and financial uncertainties caused by the US sub-prime crisis will continue to affect the sentiment of both the stock and property markets. With property transactions expected to remain weak in the short term, the group will monitor the market closely.'

Nevertheless, Ho Bee said that revenue and earnings for the next two to three years will be supported by substantial progressive recognition of income from the sale of residential projects such as Vertis at Amber Gardens and Quinterra in Holland Road.

Ho Bee's share price closed at $1.03 yesterday, two cents down.