Published August 7, 2009

MCL Land Q2 profit soars to US$36.7m

H1 results boosted mainly by sales proceeds from The Fernhill, Tierra Vue


HONG KONG Land subsidiary MCL Land yesterday posted group net earnings of US$36.7 million for the second quarter ended June 30, 2009, up from a US$3.2 million net profit in the same period last year. Revenue rose from US$353,000 in Q2 2008 to US$135.8 million in Q2 this year.

Q2 earnings per share were 9.92 US cents, against 0.86 US cent a year ago.

Net earnings for the six months ended June 2009 were US$38.1 million, up from US$8.2 million in the same year-ago period. Revenue rose from US$718,000 in H1 last year to US$144.1 million in H1 2009, due mainly to recognition of sales proceeds from The Fernhill and Tierra Vue projects which were completed in Q1 and Q2 this year respectively.

The Fernhill, which comprises a total 25 apartments, obtained Temporary Occupation Permit (TOP) in March this year and MCL Land booked a net profit of US$2.4 million for only five of the apartments in Q1. It did not recognise profit at the time on the other 20 units as a China party that had bought the apartments on the deferred payment scheme failed to make outstanding payment to MCL at TOP.

However, the China party later managed to sell the 20 units in the subsale market, albeit at a loss, and paid up MCL. Hence the developer recognised the balance net profit of US$9.9 million from The Fernhill only in May.

Tierra Vue, at St Patrick's Road in the Marine Parade area, obtained TOP in June and contributed a net profit of US$26.3 million in Q2.

The group had US$97 million net debt and 24 per cent net gearing as at June 30, 2009, an improvement from the US$181 million and 46 per cent respectively as at end-2008. 'The two completions in the first half of the year, together with the completion of Hillcrest Villa in the second half, will produce an overall satisfactory performance for the full year. These projects are also generating good cashflows that will enhance further the group's strong financial position,' MCL chairman YK Pang said in a statement.

Net asset value per share stood at US$1.09 as at June 30, 2009, 3 US cents higher than the figure at Dec 31, 2008.

On the stockmarket yesterday, the counter ended 2 Singapore cents higher at S$1.49. MCL is maintaining its policy of not paying an interim dividend.

The group's Hillcrest Villa cluster housing project near Dunearn Road is slated for completion in the second half of 2009.

D'Pavilion, a 50-unit apartment development at Upper Serangoon Road, and Waterfall Gardens condo at Farrer Road, are scheduled to complete in 2010, followed by The Peak @ Balmeg, a 180-unit condo in the Pasir Panjang area, in 2011. In addition, the group has seven development projects in Singapore at various stages of planning approval.

MCL may launch in the current half a 99-year leasehold condo near Yishun MRT Station and fronting Lower Seletar Reservoir, and a freehold condo it is jointly developing with Ho Bee on the Holland Hill Mansions site.

MCL said Wangsa Walk, a retail mall project in Kuala Lumpur by a group joint venture company, is slated to be ready in the current half. The 25,000 sq metres net lettable area is about 90 per cent pre-leased.