Hersing Q3 profit soars on ERA's strong sales

(Abstract from Business Times 12th Nov,2009 by By Uma Shankari)

PROPERTY firm ERA Real Estate saw its Q3 profit jump more than five-fold year-on-year as it sold more homes.

Hersing Corporation, its listed parent company, said yesterday in its Q3 financial statement that ERA's after-tax profit for the three months ended Sept 30 climbed to $3.7 million, from $651,000 in 2008. Revenue rose 58 per cent to $57.1 million from $36 million.

'Not only have (home) prices increased, but the volume of transactions has also increased a lot,' said Hersing president Jack Chua.

The strong showing of its property division pushed Hersing's Q3 net profit up 315 per cent to $4.4 million, from $1.1 million in Q3 2008. Revenue rose 49 per cent to $67.2 million, from $45 million in 2008. Revenue was also boosted as Hersing's two other business divisions, StorHub Self Storage and its Western Union money transfer business, also posted better year-on-year results.

ERA marketed a slew of private home launches in the first nine months of the year, including Caspian, Double Bay Residences, The Gale and The Interlace. The company's data shows that of the 12,828 new private homes sold in the first three quarters of 2009, ERA's share came to 2,494, or about 19 per cent.

Mr Chua said that ERA has been working to increase its market share for sales of new private homes as the margins are better. 'New (private) homes contribute a bugger margin for the company than resale flats,' he said.

The firm is now best known for its HDB resale business. In the first nine months of 2009, ERA's market share of the HDB resale market came to 41 per cent.

Mr Chua also said that he expects ERA to be appointed as the marketing agent for more private property launches in 2010.

'The government is releasing more land for buildings more homes, so we will have more market opportunities for ERA,' he said, referring to the decision to restart the confirmed list of the Government Land Sales programme in the first half of next year to meet the strong demand for private homes.

ERA has already been appointed to market several private residential developments that could be launched in Q1 2010.

For the nine months ended Sept 30, ERA saw after tax profit climb 181 per cent to $5.8 million, while revenue rose 19 per cent to $116.1 million.

For Hersing, net profit for the first three quarters rose 116 per cent to $8 million, while revenue climbed 18 per cent to $144.8 million.

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