GuocoLand’s H1 profit down 13% to S$59m on absence of disposal gain

PROPERTY player GuocoLand on Thursday (Jan 19) reported a 13 per cent fall in net profit to S$59 million for the first half ended December, in the absence of a S$14.3 million disposal gain recorded the year prior.

Excluding the disposal gain, the company saw its net profit rise 11 per cent, from S$53.2 million to S$59 million, on the back of a strong property market and a revival of tourism. This lifted revenue 46 per cent in H1 to S$661.6 million.

The company’s property development business posted a 45 per cent increase in revenue to S$550.4 million, thanks to higher progressive recognition of sales from its residential projects in Singapore.

Likewise, the property investment segment saw revenue up 25 per cent to S$74.8 million, as a result of higher rental revenues from Guoco Tower and contributions from Shanghai’s Guoco Changfeng City South Tower, which began operations in H1.

Revenue from GuocoLand’s hotel investments meanwhile more than tripled to S$35.3 million, due to improvements in hotel operations at Sofitel Singapore City Centre and the influx of post-pandemic tourists into Singapore.

GuocoLand chief executive officer Cheng Hsing Yao said that the company has delivered robust results despite headwinds in the real estate sector, including supply chain issues, a labour shortage, and inflation.

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“Sales of our residential projects are going strong, while revenue from our premium Grade A offices has grown consistently over the years as we see the trend of ‘flight to quality’ by top global and regional companies continuing to grow, even as they embrace a hybrid work environment,” Cheng said.

The company’s gearing stood at 0.9 times as of end-2022.

Its current loans and borrowings of $2.86 billion will be progressively repaid with proceeds from the development property sales, while the remaining will be refinanced.

GuocoLand shares closed at S$1.62 on Thursday, up 0.6 per cent or S$0.01.