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Ho Bee Land Q2 net profit slides 80% to S$14.4m
SHARE of losses from associates and jointly controlled entities and absence of fair-value gain dealt a blow to property firm Ho Bee Land's second-quarter earnings.
Net profit plunged 79.9 per cent to S$14.4 million from the previous year, as its Shanghai and Zhuhai associates faced accrual of land appreciation tax amounting to S$20.5 million. For its share of results from jointly controlled entities, Ho Bee captured losses from its residential development project in Tangshan and in-progress Australia projects, which expensed marketing and promotional expenses.
In all, Ho Bee saw S$6.7 million in share of losses from associates and jointly controlled entities compared to share of profits of S$28.3 million in the same quarter a year ago.
Moreover, the group had recorded a fair-value gain of S$28.3 million in the same quarter last year for selling its leasehold interest in the petrol station site along Bukit Timah Road.
Revenue rose 21.2 per cent to S$52.6 million from the previous year, helped by contributions from Ropemaker Place, a London investment property which was acquired on June 15 last year. The group also noted positive rental reversions at The Metropolis in Singapore and other London properties, and that its rental income rose 30 per cent.
Earnings per share fell to 2.16 Singapore cents from 10.74 Singapore cents in the previous year. The company considers dividends at the end of the fiscal year.
For the first half of the year, net profit fell 65 per cent to S$42.1 million, while earnings per share stood at 6.32 cents compared to 18.16 cents in H1 2018.
The group noted a bleak outlook for global economic growth with the ongoing geopolitical tensions, trade conflicts and Brexit uncertainty, and that the Singapore economy has already been negatively impacted.
Chua Thian Poh, chairman and chief executive officer, said: "Our portfolio of investment properties will help us weather the challenging times ahead and underpin the group's profitability."
Ho Bee shares closed S$0.01 or 0.4 per cent lower at S$2.32 on Tuesday before the results were announced.