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SingHaiyi's Q4 profit slides 71% on increased cost of sales, absence of one-off gain

HIGHER cost of sales and the absence of a one-off gain in the previous period dented real estate company SingHaiyi Group's fiscal fourth-quarter profit, which fell 70.7 per cent to S$6.5 million from S$22.2 million a year ago.

Earnings per share were down to 0.21 Singapore cent from 0.77 Singapore cent a year ago on a larger weighted average number of shares.

Cost of sales increased by S$15 million year-on-year to S$18.89 million in Q4 2018, in line with the increase in property development income from the group's completed executive condominium and private condominium projects.

The absence of a one-off gain from the disposal of associate company and other investments in relation to its 20 per cent equity interest in Perennial Somerset Investors also hurt SingHaiyi's bottom line.

SingHaiyi's board has declared a final dividend of 0.3 Singapore cent.

Revenue for Q4 rose to S$27.51 million compared to S$8.19 million in the previous corresponding period, boosted mainly by revenue for the group's completed The Vales and City Suites condominiums.

The group clocked property development income of S$25.25 million, up from S$4.53 million a year ago, and lower rental income of S$1.87 million from S$2.43 million, due to the ongoing asset enhancement initiative at its Tri-County Mall in Cincinnati.

Overall, for the full year ended March 31, the group clocked 3.7 per cent higher profit attributable to company owners of S$32.27 million, on the back of significantly higher revenue of S$458.84 million.

In addition, share of profits of equity-accounted investees - net of tax - swung to a loss of S$1.9 million in Q4 2018 from a gain of S$10.5 million in the same quarter last year, mainly due to the share of loss from ARA Harmony Fund III, LP of around S$2.1 million in Q4 2018.

The strong growth in the group's revenue during the year stands "as a testament to the strong demand" for SingHaiyi's The Vales EC project, said group managing director Celine Tang.

"We will continue to place a premium on building quality and affordable developments that cater to the demands of the market," she said.

Ms Tang added that the group's efforts to maximise efficiency have paid off, shown in its higher net profit for the year.

Looking ahead, SingHaiyi said it has made progress in its pipeline of developments, obtaining the Certificate of Statutory Completion for its freehold City Suites residential project along Balestier Road on May 3.

Development work at its 9 Penang Road development - formerly known as Park Mall - is on track for completion by the end of 2019, having commenced development work since October 2016.

SingHaiyi's counter closed at 9.6 Singapore cents on Thursday, up 1.05 per cent.

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