Published August 26, 2009

Wing Tai posts loss of $53.9m in Q4

Results hit by $109.7m fair value losses on investment properties


WING Tai Holdings yesterday reported a net loss of $53.9 million for the fourth quarter ended June 30, 2009, as it booked fair value losses of $109.7 million on its investment properties. Net profit in the same three months a year ago was $96.3 million.

Revenue in the three months, however, rose 78 per cent to $191.5 million, from $107.3 million in Q4 2008.

The fair value loss also hit the developer's full-year results. Net profit for financial year 2009 fell 91 per cent to $21.0 million, from $229.4 million for FY2008. Excluding the fair value losses on investment properties, the net profit of the group would have been $108.9 million in FY2009, compared with $157.8 million in the previous year, Wing Tai said.

Revenue for the full year rose 18 per cent to $507.3 million, from $428.2 million in the previous year, boosted by progressive sales recognised from its development properties Helios Residences, Belle Vue Residences and The Riverine by the Park in Singapore.

Wing Tai sold just 100 homes with a total sales value of $208.5 million in Singapore in FY2009, but said that its sales have picked up substantially since July. Since then, it has sold another 269 units with total sales proceeds of $575 million. Sales came from three projects - Belle Vue Residences, Ascentia Sky and Floridian.

Prices are also on their way up, at least at one of Wing Tai's projects. While earlier units in the upmarket Belle Vue Residences went for an average of $1,700 per square foot (psf), units sold later went for an average of $1,900 psf each, the company said. And some units were even sold for around $2,400 psf, said Wing Tai chairman Cheng Wai Keung. More than 80 per cent of the 120 apartments released at the 176-unit Belle Vue Residences have been sold to date.

At the 373-unit Ascentia Sky, more than 80 per cent of the 180 units released have been sold.

Remaining units at Belle Vue Residences, Ascentia Sky and Floridian could sell for more than those units sold so far, said Wing Tai deputy chairman Edmund Cheng. This is because units that are left are 'better' units, and could therefore be expected to fetch higher prices.

Looking ahead, Wing Tai chairman Mr Cheng said that being a cautious person, he did not believe that the current recovery in the property market was V-shaped - meaning that he does not expect a sharp rebound.

The mass market segment of the property market looks like it has recovered and could soon stabilise, he said. He was also 'cautiously optimistic' about the mid-range property market. But for the high-end segment (where Wing Tai's portfolio is concentrated), more growth is needed before we can be sure of a real recovery, Mr Cheng said.

'For the high-end segment, we need to create a lot more wealth in the economy than what we are seeing now,' Mr Cheng said. But wealth is 'coming back', he added.

For now, Wing Tai will ride on the positive market momentum and continue to market its residential pro-jects, it said. It has three more sites in its landbank that have yet to be launched.

Wing Tai's gearing rose from 0.4 times to 0.5 times from June 2008 to June 2009. FY2009 earnings per share fell to 2.68 cents, from FY2008's 30.11 cents.

The company declared a total dividend of 4 cents a share for 2009 (comprising a first and final dividend of three cents and a special dividend of one cent), down from a total of six cents a share for 2008. Excluding treasury shares and fair value gains/losses, EPS for FY2009 came to 13.9 cents, down from 20.7 cents. Based on this, the dividend payout ratio is maintained at 29 per cent.

Wing Tai shares rose 3 cents to close at $1.81 yesterday.