Ho Bee's FY17 profit up 15% on back of China JV project

Thu, Mar 01, 2018

Lynette Khoo


BUOYED by a surge in contributions from a Shanghai joint venture project, Ho Bee Land's net profit for the full-year ended Dec 31, 2017 rose 15 per cent to S$249.26 million.

This joint venture project led a 235 per cent surge in the share of profits from associates to S$99.3 million, Ho Bee said on Wednesday.

But group revenue for the full year marked a 45 per cent drop to S$164.7 million as it recorded higher sales in fiscal 2016 for the two wholly owned residential development projects in Melbourne and Gold Coast, which were completed in the first half of 2016.

For the fourth quarter ended Dec 31, Ho Bee Land's net profit also dropped 20.9 per cent to S$102.44 million, as revenue from development projects fell due to project completions in Australia in 2016.

Dragged by a 46.9 per cent fall in sales of development projects to S$3.46 million, group revenue fell 3.1 per cent to S$41.17 million. Cushioning the fall in group revenue was rental income, which improved by 4.9 per cent to S$37.7 million.

Ho Bee chairman and CEO Chua Thian Poh noted that the group's stronger performance for fiscal 2017 was "buttressed by the recurring income from the Singapore and UK portfolio of investment properties".

"We have built a solid recurring income base which enables us to selectively source for good investment and development opportunities both locally and overseas," he said.

Ho Bee's portfolio of investment properties includes The Metropolis in Singapore's one-north precinct as well as London properties, namely 1 St Martin's Le Grand, 60 St Martin's Lane, 39 Victoria Street, 110 Park Street, Apollo & Lunar House and 67 Lombard Street.

In Singapore, there has been renewed interest in apartments in Sentosa Cove, with prices stabilising and demand improving, Mr Chua said. "We will therefore be exploring the sale of our projects in Sentosa Cove to capitalise on the improved market sentiment."

Ho Bee still has some 103 unsold units at Seascape and 48 unsold units at Turquoise, of which it has rented out about 80 per cent.

As for the yet to be launched 302-unit Cape Royale, over 200 units have been leased out.

The board of directors is proposing a first and final dividend of eight Singapore cents per share, plus a special dividend of two cents per share. This is higher than a year ago, when it declared a first and final dividend of six cents per share.

Shares of Ho Bee closed 1.2 per cent higher at S$2.48 on Wednesday.