Ho Bee Land H1 profit rises 3% to S$51.1 million on higher development sales

[SINGAPORE] Property developer Ho Bee Land posted a 3 per cent rise in net profit to S$51.1 million for its first half-year ended Jun 30, from S$49.8 million in the previous corresponding period.

This came as revenue for the half-year grew 30 per cent to S$230.5 million, from S$177.7 million the year before. The rise came mainly from higher settlements for its Australian projects and increased sale recognition from the condominium Turquoise in Sentosa Cove, the mainboard-listed group said in a bourse filing on Friday (Aug 7).

Earnings per share stood at S$0.077 for the half-year, up from S$0.075 in the preceding year.

No dividend was declared for the half-year, unchanged from the year prior, as it is the group’s policy to consider a final dividend only at the end of the financial year.

Net asset value per ordinary share stood at S$5.70 as at Jun 30, unchanged from the S$5.70 as at last Dec 31.

Sales of development properties rose 84 per cent to S$111.2 million, from S$60.4 million, while the corresponding cost of sales for residential development projects increased to S$119.2 million, from S$117.2 million previously. This was mainly attributed to increased contributions from The Metropolis, a Grade-A office building in one-north in Buona Vista.

Direct rental expenses fell 40 per cent to S$10.1 million, from S$16.7 million, primarily due to a property tax refund received from planned vacancies at 1 St Martin’s Le Grand, a Grade-A office space in the heart of London.

Net finance costs fell 7 per cent to S$55 million, from S$59.5 million, driven by lower interest rates.

The group recognised a net unrealised exchange loss of S$5.7 million for the period, from a net gain of S$3.1 million, mainly due to the weakening of the Singapore dollar against the Australian dollar.

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The share of profits of jointly controlled entities fell 27 per cent to S$7.2 million, from S$9.9 million. This was mainly the result of lower sales recognition from high-rise condominium Cape Royale in Sentosa Cove and the group’s Australian joint venture projects, which were partially mitigated by higher sales contributions from the condominium Seascape in Sentosa Cove.

The valuation of the group’s Singapore portfolio remained unchanged for the period, but its London portfolio recorded a net fair-value gain of S$1.3 million, down from S$6.1 million previously.

Income tax expense rose to S$20.3 million from S$10.1 million the year before, primarily due to a lower tax refund received of S$5.8 million and in line with higher profit from operations.

By segment, property development contributed external revenue of S$111.2 million, up from S$60.5 million, while property investment contributed S$119.2 million, up from S$117.2 million.

During the half-year, the group made several acquisitions in Australia and Luxembourg, and also expanded its Australian residential land portfolio.

In London, the group commenced asset enhancement works at 67 Lombard Street and made progress in its preparations for the redevelopment of 1 St Martin’s Le Grand, positioning both assets to benefit from occupiers’ ongoing flight to quality amid tight Grade-A office supply.

The group also invested in a convenience retail portfolio in the Netherlands and a hospitality fund in Japan.

The group said it would remain disciplined in its capital allocation, guided by prudent financial management and a commitment to creating sustainable long-term value for shareholders.

Shares of Ho Bee Land closed S$0.03 or 1.5 per cent higher at S$2.04 on Friday, before the announcement.