GuocoLand Q4 profit falls but full-year net profit up by 7%

Singapore

GUOCOLAND'S earnings were down in the fourth quarter, tracking a fall in group revenue, on what the real estate player dubbed a "substantial" drop in its stock of private homes.

Net profit was S$141.2 million for the three months to June 30, down by 42 per cent on the previous year, according to audited results out on Sunday. Revenue was more than halved, lower by 52 per cent to S$197 million.

Meanwhile, other income slipped by 44 per cent to S$147.2 million, largely on a lower fair-value gain from Tanjong Pagar Centre's Guoco Tower, which was finished in 2016 and has made its first full-year contribution.

Earnings per share came in at 12.24 Singapore cents, against 22.06 Singapore cents previously. But GuocoLand noted in its financial statement that gross margin for the quarter improved to 35 per cent, from 24 per cent in the previous year.

Full-year net profit rose by 7 per cent year on year, to S$381.3 million, on contributions from the newly completed Changfeng Residence joint venture in Shanghai, while revenue was up by 4 per cent to S$1.16 billion.

GuocoLand said that its residential developments saw "healthy sales" in the year, with Leedon Residence fully sold and just one per cent of units left on the market at Sims Urban Oasis, which received its Temporary Occupation Permit last October.

The take-up rate at Martin Modern has reached 60 per cent and, as construction is still under way, revenue contribution from the project will be recognised progressively, GuocoLand noted.

Group president and chief executive Raymond Choong said in a media statement: "We have been active but disciplined in our investment bids and the selective acquisitions of well-located land sites will provide a pipeline of mixed-use, commercial and residential development."

The group cited the acquisition of a plum Beach Road commercial site in a government tender, as well as the collective-sale deals for Pacific Mansion in FY2018 and Casa Meyfort last month.

Including upcoming mixed-use, commercial and residential developments in Singapore, China and Malaysia, GuocoLand has a project pipeline with some 15 million sq ft in combined gross floor area and potential gross development value of more than S$11 billion, the group added.

The board recommended a dividend of seven Singapore cents a share, the same as the previous year.