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Low Keng Huat Q2 earnings jumps more than eightfold to S$4.2m
HIGHER profits from its development segment, offset by lower profits at its investment segment, gave a lift to results for Low Keng Huat in its second quarter.
The property developer's net profit jumped more than eightfold to S$4.2 million from the previous year, it said on Wednesday.
For the three months ended July 31, revenue leapt 472 per cent to S$77.9 million from the previous year. The expansion in revenue was due to a jump in development revenue to S$69.4 million in the quarter, compared to just S$$3.6 million in the corresponding period a year ago. The increase was due to sales from Kismis Residences in the first half of the current year, it said.
Kismis Residences is a 31-unit freehold landed development in the landed residence enclave of Lorong Kismis and Eng Kong Park off Upper Bukit Timah Road. It obtained its temporary occupation permit in May this year and was fully sold by June.
However, revenue from Low Keng Huat's hotel segment fell in Q2, mainly due to lower room rates and lower occupancy in Duxton Hotel Perth and the closure of food and beverage outlets.
Investment revenue stayed flat for the quarter, but earnings from the investment segment fell, due to a gain on disposal of long-term equity investment in the first half of the previous year, and lower share of profits at AXA Tower due to the absence of office unit sales in the current period.
Earnings per share leapt to 0.56 Singapore cents from 0.06 Singapore cents in the year-ago period. Net asset value per share dipped to 88 Singapore cents as at June 30, from 90 Singapore cents six months ago.
In its outlook, the developer said that the residential property market has been more subdued since the recent tightening of property cooling measures. "The group will continue to be selective in land bidding and investment projects. The group will strive to maintain rental rates for renewals," it added.
The developer had announced in June that it had invested 40 per cent equity in a vehicle which acquired the freehold Villa D'Este for S$93 million on an en-bloc basis, together with KOP Limited. They plan to redevelop the property into a high-end condominium.
Low Keng Huat had also in August completed the purchase of 67 Cairnhill Road, which sits on freehold land with a land area of about 19,800 square feet.
In February this year, it also bought 69 Cairnhill Road in an en-bloc acquisition; the sale order for this has yet to be obtained. If obtained, Low Keng Huat has plans to amalgamate 67 Cairnhill with 69 Cairnhill and redevelop them into a high-rise residential condominium with about 200 residential units.
Low Keng Huat shares finished unchanged at S$0.55 on Wednesday.