Hwa Hong's Q3 profit up on disposal gain

Singapore

A DISPOSAL gain helped to push Hwa Hong Corporation's bottom line 73.7 per cent higher to S$3.9 million for the third quarter ended Sept 30, 2014. This comparison takes into account the group's S$23,000 loss from a discontinued operation in the third quarter of 2013.

For the three months ended Sept 30, 2014, the company recorded a S$6.9 million gain on disposal gain of investment properties, against a S$17,000 gain for the same period a year ago.

Revenue softened, slipping 10.9 per cent to S$4.3 million, as revenue from the group's rental segment decreased.

For the nine-month period, net profit almost doubled from S$5.9 million to S$11.4 million, the boost also coming from the group's gain on disposal of investment properties.

However, revenue for the period fell 36.3 per cent to S$13.8 million, as turnover from both the group's rental and investment segments fell.

On the rental front, revenue fell 18.8 per cent to S$5.4 million for the first nine months of the year, as rental income from certain commercial and service office properties in the United Kingdom decreased. This was mostly because four of the company's office buildings in London had been sold.

"In London, after the disposal in Q2 and Q3 of part of the commercial property portfolio, the group still retains 50 per cent interest in a portfolio of office and retail properties which are held for rental income," Hwa Hong said on Tuesday.

"Outside of London, the commercial property market remains weak. The group is exploring the development of a student accommodation facility and alternative usage for its other commercial properties, including residential use."

The group's revenue from investments also fell 42.8 per cent to S$8.5 million, on lower proceeds from the sale of investment securities which were attributed mainly to a "decrease in share trading activities".

Going forward, the group expects the returns from equity investments to be affected by "volatility in the global equity markets".

For its continuing-operations, earnings per share for the group stood at 0.61 Singapore cent and 1.75 Singapore cents for the quarter and nine-month period respectively, up from 0.35 and 0.92 in the corresponding periods of the previous year. For the discontinued operation, the nine-month period recorded a loss per share of 0.01 Singapore cent, the same as in the first nine months of 2013.

Hwa Hong's counter closed unchanged at 32.5 Singapore cents on Tuesday.