Published October 22, 2009

KepLand Q3 profit jumps 70%; revenue up 23%

Company says it is well-placed to grow through acquisitions with recent cash call


KEPPEL Land yesterday said that third-quarter net profit rose 70 per cent to $78.5 million, from $46.2 million a year ago, as it booked more revenue from its projects and also saw greater contributions from associated companies.

Revenue climbed 23 per cent to $227.8 million from $185.8 million in Q3 2008. The increase was due mainly to progressive revenue recognition from a fully sold project in Singapore, The Sixth Avenue Residences, which obtained its temporary occupancy permit in August 2009.

Higher revenue was also recognised for several overseas projects in China and The Estella in Ho Chi Minh City, Vietnam.

Earnings per share for Q3 2009 rose to 6.8 cents, from a restated 4.6 cents.

'Market confidence strengthened further in Q3 2009 as the Singapore economy emerged out of recession,' KepLand said in a statement.

Capitalising on demand for mid- and higher-end homes, KepLand launched Madison Residences and Caribbean Residences as well as soft-launched The Promont in Q3 2009, all of which enjoyed strong take-up. The developer has sold 240 homes in Singapore so far this year.

Buying sentiment in the company's key Asian markets also strengthened. KepLand sold more than 2,600 homes overseas by end-September 2009, mostly in China.

For the nine months ended ended September 30, 2009, KepLand saw net profit of $173.6 million, up 9 per cent from $159.1 million last year. Revenue for the first three quarters fell slightly by 3 per cent to $623.4 million compared with $644.8 million in 2008. The decrease was due largely to the completion of a few projects during the last financial year.

KepLand's net debt decreased by $765 million over the first nine months of the year. The debt-to-equity ratio was 0.19 at end-September 2009, compared with 0.52 at end-December 2008. The decrease in net debts was mostly due to proceeds from the rights issue received in June 2009.

The company is upbeat about its prospects: 'With a strengthened balance sheet after its rights issue raised proceeds of about $700 million, Keppel Land is well-positioned to capitalise on opportunities to grow through acquisitions.'

In Singapore, the group will continue to focus on developing residential and commercial developments. Overseas, it will focus on developing residential, township and selective gateway city office projects in high growth markets such as China, Vietnam and India.

The group's fund management vehicles, K-Reit Asia and Alpha Investment Partners, are also pursuing opportunities for growth, KepLand said.

KepLand shares closed unchanged at $2.72 yesterday.