Feb 6, 2010

Market recovery boosts 2 property developers

By Jessica Cheam

A BOOMING property market on the back of a broad if tentative economic recovery last year has boosted the results of two mainboard-listed developers.

Guocoland posted a net profit yesterday of $60.4 million in its second quarter ended Dec 31 last year - a dramatic jump from just $861,000 earned in the same quarter a year earlier.

Boosted by positive sentiment and strong property sales, Guocoland's revenue leapt 284 per cent to hit $363.7 million from the same period a year earlier.

Wing Tai Holdings posted a more modest 7 per cent rise in net profit to $22.3 million in its second quarter in the same three-month period. Revenue shot up 93 per cent to $177 million.

Guocoland said yesterday that its strong performance was mainly due to the strong sales of projects in China, especially Nanjing's Ascot Park.

China's property market has rallied in the recent year, in tandem with its growing economy. Asian markets have been leading a broad global recovery following the 2008 financial crisis.

For the half year ended Dec 31, Guocoland had a net profit of $72.8 million, reversing a net loss of $2 million in the same period a year ago. Revenue was also up 85 per cent to $459.4 million.

Closer to home, the group launched Sophia Residence in the Dhoby Ghaut area and Elliot on the east coast, which chalked up more than 90 per cent and 70 per cent sales respectively.

Earnings per share for the group were 7.27 cents for the second quarter, up from 0.1 cent previously. The group's net asset value was $2.32 as of Dec 31, compared to $2.37 as of June 30.

Brisk sales in Singapore's private residential market also gave Wing Tai's financial performance a lift.

The group said it sold more homes at its Belle Vue Residences at Oxley Walk and The Riverine by the Park at Kallang.

For the half year, its net profit rose 28 per cent to $68.7 million, while revenue rose 101 per cent to $454.3 million.

Earnings per share for the group for the second quarter were 2.87 cents, up from 2.67 cents in the same quarter a year earlier. Its net asset value per share was $2.06 as of Dec 31, up from $2.03 as of June 30 last year.

Guocoland's share price closed 12 cents down at $2 yesterday, while Wing Tai Holdings closed four cents lower at $1.76.