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JV losses, new reporting standards send SLB Development into the red by S$2.8m in Q1

CATALIST-LISTED SLB Development sank into the red in the first quarter on restated numbers after the adoption of new reporting standards, according to unaudited results released on Friday.

SLB saw a net loss of S$2.79 million for the three months to Aug 31, against a profit of S$3.65 million in the same period the previous year, on swelling sales, marketing and administrative expenses, lower operating income, and a share of losses in joint ventures and associates.

The developer took a hit from S$2.45 million in losses from joint ventures and associates as the Spottiswoode Suites has been finished, while the launches of Affinity @ Serangoon and Riverfront Residences incurred marketing costs but have yet to contribute revenue.

Meanwhile, turnover was down by 33.6 per cent year-on-year to S$23 million, all of which came from the quarter's recognition of units sold at the T-Space @ Tampines project.

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Under the old reporting system, SLB would have recognised all S$270 million from T-Space @ Tampines sales in the three months, based on the completion of contracts method. It must now do so progressively, in line with the timeline of construction works.

SLB notched losses per share of 0.31 Singapore cent, from earnings per share of 0.54 Singapore cent in the year before, while net asset value ticked down to 16.67 Singapore cents a share, against 17.03 Singapore cents as at May 31, 2018.

Chief executive Matthew Ong said in a media statement that the company looks forward to the progressive contribution of revenue not just from T-Space @ Tampines, but also from units sold at the industrial Mactaggart Foodlink development from Q3 2019 onwards.

The joint acquisition of a freehold property at 24, New Industrial Road is expected to be done by end-2018, said SLB. Also, the group plans to launch a wholly-owned industrial project, Lorong 21 Geylang, and a 42 per cent-owned residential development, Lorong 24 Geylang, in early 2019.

In the wake of July's surprise property cooling measures, SLB said that it expects the residential market to stay challenging and will continue to monitor the property market closely.

"The group is cautious when seeking opportunities to replenish its land bank and will continue to explore business opportunities in the region through acquisition, joint venture and/or strategic alliances that will complement its property development business," it said.

The group added that it sees "opportunities in the resilient industrial sector".

No dividend was recommended, unchanged from the previous year.