Published August 13, 2009

Soilbuild Q2 profit falls 15% to $19.7m


PROPERTY developer Soilbuild Group yesterday posted a net profit of $19.7 million for the second quarter ended June 30 - 15 per cent down from a year ago.

Full house: Soilbuild's 127-unit The Mezzo on Balestier Road has sold out since its launch in March

Group revenue rose 10 per cent year on year to $96.9 million, as contributions from both property development and rental grew. There was revenue recognition from residential projects such as Heritage 9, as well as higher rental income from five investment properties.

However, increased revenue was offset by higher cost of sales, which rose 23 per cent to $64 million. This caused gross profit to be 8 per cent lower than a year ago.

With lower net gains, group earnings per share fell 19 per cent to 9.06 cents for Q2.

For the half year ended June 30, Soilbuild's net profit rose 32 per cent to $38.8 million.

This came on the back of a 35 per cent increase in revenue to $161.6 million, with a strong showing from the property development business.

Improved market sentiment in the last few months has helped Soilbuild.

It has fully sold its 127-unit The Mezzo on Balestier Road since launching the project in March, and has also put Meier Suites on the market.

Soilbuild said that it has achieved residential property and business space sales (including options to purchase signed up to July 31) of $207 million so far this year.

'This translates into total sales of $638 million for the group, with more than 50 per cent of the amount yet to be recognised, thereby underpinning the group's performance.'

Soilbuild also said that it would seek new growth opportunities. For instance, it could make use of its property development expertise to develop fee-based income. It added that it 'remains ready to tap new opportunities in the capital market'.

Soilbuild expects to stay profitable this year with progressive recognition of revenue from sold residential and business space projects, as well as growing rental contributions from leased investment properties.

In the stock market yesterday, the counter lost half a cent to close at 92 cents.