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Thakral posts S$6.86m Q2 profit on valuation gain
THAKRAL Corporation on Wednesday posted a net profit of S$6.86 million for the second quarter ended June 30, 2015, a reversal from the loss of S$1.76 million a year ago.
This was largely due to the S$9.5 million valuation gain recorded on the investment properties reclassified as held for sale.
The revaluation was done on the group's warehouse properties in Hong Kong as it intends to realise value arising from the change of use from industrial to residential in the area.
"The group is currently exploring various options and an announcement shall be made at the appropriate time," it said.
Revenue for the second quarter was down 30 per cent to S$78.9 million.
Cost of sales fell 31 per cent to S$73.9 million.
Earnings per share for the quarter was 5.24 Singapore cents, compared with a loss per share of 1.34 Singapore cents previously.
The group said strong economic conditions coupled with the highest rates of migration in New South Wales and Victoria have seen these states, which are more sheltered from the mining sector downturn, record the strongest housing demand.
Mortgage rates are expected to remain low and the market, especially on the east coast, would continue to grow, said Thakral, adding that the dramatic differential in affordability in some areas near Sydney, as well as certain pockets in Brisbane relative to Sydney and Melbourne, is expected to drive more buyers to these areas.
"While the group remains well positioned to participate in projects in some of these markets, concerns of a housing bubble are rising. The group is well advanced with its plans to diversify into other asset classes and segments of the real estate market that will diversify the investment division's sources of revenues and capital growth in the medium and long term."
As for its lifestyle division, the group said it remains cautious in view of the slowing Chinese economy, as well as weak global economy.