Published April 18, 2009

GuocoLand Q3 net profit soars as condo relaunch pays off


GUOCOLAND, the Singapore-listed property unit of Malaysian tycoon Quek Leng Chan, saw a near doubling of its net earnings for the third quarter ended March 31 as it booked profits from sales of its residential project, The Quartz, which it launched in May 2006.

Net profit for the quarter rose 91 per cent to $4.9 million, from $2.6 million a year ago. Earnings came mainly from development profits from sales of The Quartz, GuocoLand said.

The group achieved gross profit of $34.6 million - against $11 million a year ago - but the Q3 results were marred by a net foreign exchange loss of $24.6 million. Earnings per share rose to 0.60 cent from 0.31 cent.

Revenue for Q3 rose 21 per cent to $126.1 million, from $104 million a year ago. Revenue was also boosted by The Quartz.

GuocoLand successfully relaunched the remaining 182 units in The Quartz in February 2009. The relaunch was well received and The Quartz was almost fully sold, it said in its report yesterday.

For the nine months ended March 31, 2009, GuocoLand saw net profit dive 95 per cent to $2.9 million from $63.2 million a year ago. This came on the back of a net loss of $2.8 million in Q1, which was followed by a Q2 net profit of just $861,000.

Nine-month earnings were also hit by a net foreign exchange loss of $46.7 million comprising primarily of unrealised translation loss on US$270 million bank loans as the US dollar appreciated against the Singapore dollar.

Revenue for the nine months also fell 26 per cent to $373.8 million, from $506.1 million for the corresponding nine months a year earlier. This was attributed to lower sales recognised from development properties in China.

Looking ahead, GuocoLand said that it will continue to review its business strategies in this challenging and volatile operating environment.

'The group intends to defer development of certain unlaunched projects as construction prices are expected to ease further,' it said. 'The group will monitor property markets closely and time new launches when opportunities arise.'

GuocoLand shares gained one cent to close at $1.29 yesterday.