Singapore Companies
Published August 11, 2006

Ho Bee's Q2 profit almost trebles


BOOSTED by good sales of its Sentosa island developments, property developer Ho Bee Investment's net profit for the second quarter ended June 30 almost trebled - rising 192.7 per cent to $24.4 million from $8.3 million for the previous corresponding three months.

Seaside condos: The Berth by the Cove, one of Ho Bee's prominent projects, was sold 97 per cent by end-June

The strong Q2 showing pushed earnings for the first half of the year up 58.2 per cent to $37.6 million, from $23.8 million in the first half of 2005.

In its filing to the Singapore Exchange yesterday, Ho Bee said earnings for the whole of 2006 will outdo 2005's earnings, which came in at $38.1 million.

'Together with the impressive results achieved during the first half of this year, total earnings for the current year will significantly exceed those of the preceding year,' said Ho Bee. UOB Kay Hian, which initiated coverage on Ho Bee with a 'buy' call on Monday, has a 2006 earnings forecast of $84.4 million for Ho Bee.

Ho Bee attributed the positive performance so far to good turnover from its core property development segment, which rocketed to $119.6 million in Q2, a hefty 430 per cent jump from the same three months in 2005.

But the figure includes a contribution of $80 million from the sale of the group's office building, HB Robinson, at Robinson Road. Excluding this sale, turnover from the property development segment stands at $39.6 million, representing a smaller growth of 76 per cent. Total revenue for Q2 grew 217.9 per cent to $121.7 million. For the first half of 2006, turnover grew 44.7 per cent to $174.5 million.

Earnings per share for the six months grew to 5.63 cents, from 3.85 cents in the previous corresponding period. Net asset value per share also grew - from 49.9 cents at end-December 2005 to 60.4 cents. Ho Bee declared an interim cash dividend of 0.75 cent per share.

For its second quarter, Ho Bee recognised revenue from four prominent residential projects - Montview at Mount Sinai and Coral Island at Sentosa Cove, which are more than 90 per cent sold; and The Berth by the Cove and The Berthside at Sentosa Cove, which were 97 per cent and 100 per cent sold, respectively, by end-June.

Ho Bee also launched another residential project in May - Vertis at Amber Gardens. By end-June, one-third of the project had been sold but income has yet to be recognised as construction work had not commenced.

Two condo developments on Sentosa Cove and Orange Grove Road are expected to be launched by the end of this year, while Ho Bee's Paradise Island bungalows are expected to go on the market next year. Ho Bee's shares closed one cent up at 84.5 cents yesterday.