GuocoLand's Q2 profit drops on absence of divestment gain from associate

GUOCOLAND Limited reported a 25 per cent drop in net profit to S$43 million in the second quarter ended Dec 31, 2017 due to a divestment gain by an associate in the comparative period.

Its revenue jumped 60 per cent to S$370.6 million, thanks mainly to stronger sales and higher progressive revenue recognition from its Singapore residential projects.

During the quarter, its share of profit from associates and joint ventures fell to S$9 million from S$44.8 million a year ago as it recognised a one-time gain from the divestment of a land parcel in the year-ago quarter.

For the fiscal first-half, GuocoLand's net profit more than doubled to S$208.5 million from S$82.8 million a year ago on the back of higher revenue and share of profit of associates and joint ventures.

The 69 per cent jump in revenue for the six-month period to S$732.5 million was led by stronger performance of its residential projects in Singapore.

Contribution from Changfeng Residence, a joint-venture residential project in Shanghai that has been substantially sold and completed, was the main reason behind the surge in share of profit of associates and joint ventures to S$179.5 million in the six-month period, up from S$44.7 million in the year-ago period.

Giving an update on its projects in Singapore, GuocoLand said that its city-fringe condominium project Sims Urban Oasis has obtained its temporary occupation permit in October last year. The 1,024-unit project was about 94 per cent sold as at end-2017.

Its luxury residential project Martin Modern at Martin Place, launched last July, sold 210 units out of a total of 450 units as at end-2017.

The group secured a commercial site in Beach Road last October for S$1.622 billion in a 70-30 joint venture with its parent, Hong Kong-listed Guoco Group. Both companies are controlled by Malaysian tycoon Quek Leng Chan.