Ho Bee Land back in the black with H1 S$8.8 million profit
The return to profitability was aided by a narrowing of fair value losses in its investment properties to S$11.2 million, from S$208.3 million a year ago.
REAL estate development and investment company Ho Bee Land reported a net profit of S$8.8 million for the six months ended Jun 30, 2024, reversing a net loss of S$155.7 million in the same period a year ago.
Revenue for the half year was up 48 per cent at S$230 million, from S$155.5 million in the previous corresponding period.
In a bourse filing on Monday (Aug 12), the group said that development property sales more than trebled to S$94.7 million, compared with S$29.9 million in H1 FY2023, driven by higher sales in Australia and Sentosa Cove in Singapore.
Fair value losses from its investment properties in London lessened to S$11.2 million in H1, from S$208.3 million a year ago.
With the Bank of England starting to cut interest rates, the group said it expects capitalisation rates in the United Kingdom to stabilise and financing costs to be lower in H2 2024.
Cost of sales more than trebled to S$77.9 million from S$22.7 million in the prior year, as a result of higher sales. Income tax expense increased 27 per cent to S$25.5 million.
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Earlier on Monday, the group announced that it would sell a 49 per cent stake in wholly owned subsidiary, HB Universal, at a consideration of S$134 million. Gain on disposal is estimated to be S$34.8 million.
HB Universal is a special purpose vehicle which holds Elementum, Ho Bee Land’s biomedical life-science development, at 1 North Buona Vista Link. The deal is slated to be completed by Aug 21, 2024.
Shares of the counter closed Monday up 2.2 per cent or S$0.04 at S$1.83, before the update.
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Clarification note: An earlier version of this article stated that the return to profitability was due to higher capitalisation rates for London properties.
Ho Bee Land has since clarified that reduced non-cash fair value changes in the valuation of the UK portfolio were a key reason.
The article above has been revised to reflect this.
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