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Published August 13, 2010

Profit surge sees dividend from Soilbuild

Q2 gain up 66% to $33m despite revenue slipping 24% to $74m

By EMILYN YAP


SOILBUILD Group yesterday posted higher earnings for the second quarter ended June 30 and declared its first dividend.

Net profit was $32.7 million - up 66 per cent from a year ago, despite revenue falling 24 per cent to $73.6 million.

Revenue fell because of lower contributions from property development. It brought in $69 million - 26 per cent less year-on-year. There were no contributions from The Centrio and Leonie Parc View - two residential projects that were completed in the second half of 2009.

Contributions from property rental rose 31 per cent to $4.6 million, but this could not make up for the property development arm's weaker performance.

Still, the group's bottom line got a boost from fair value gains of $16 million from the revaluation of investment properties Tuas Connection and Solaris.

For the first half, Soilbuild's net profit was $42.7 million, up 10 per cent from last year.

Revenue slipped 34 per cent to $106.1 million. This was also due to lower property development contributions that could not be offset by higher rental takings.

To reward shareholders, Soilbuild declared an interim dividend of 0.5 cent a share to be paid on Sept 8. 'Our rental income from the business space portfolio continued to grow in H1, supporting our maiden interim dividend,' said the group's executive director Low Soon Sim.

He believes recurrent income will increase in the coming year as the economy grows. Soilbuild also expects to start marketing West Park BizCentral and Goodvine for lease in H2. And pre-commitments for Solaris at one-north have risen to 60 per cent of net lettable area.

Soilbuild will also launch North Point BizHub for sale in H2. It bought the site in a state tender in April and expects to start development soon.

Soilbuild's counter gained half a cent yesterday to close at 62 cents.