ST : KepLand sees 56% rise in Q4 profit

Jan 26, 2010

KepLand sees 56% rise in Q4 profit

Rebound in property market helped boost income; full-year profit up 23% to $280m

By Harsha Jethnani

KEPPEL Land (KepLand) yesterday reported a 56 per cent jump in fourth-quarter net profit to $106.9 million, mainly the result of the rebounding property market.

Excluding an adjustment for gains in property values, profit rose by 24.6 per cent to $76.6 million.

Sales for the three months ended Dec 31 last year rose by 52 per cent to $300.5 million.

Sales at the Marina Bay Suites, Reflections and Caribbean at Keppel Bay made up the bulk of the property income gains from the Singapore market.

A total of 89 units were sold at the Marina Bay Suites while 32 units and 12 units were sold at the Caribbean and Reflections, respectively. Sales from The Botanica in Chengdu, China, also helped to boost the bottom line.

On a full-year basis, KepLand posted a 23 per cent rise in net profit to $280.4 million after adjusting for net fair value gains. Excluding the gains, profit increased by 17.3 per cent to $250.2 million.

Overall, property trading income rose by 22.8 per cent to $196.4 million - an increase largely responsible for the upswing in last year's profit.

'Asian countries were relatively less affected. With the rebound in property markets.... we sold a total of about 3,500 homes, mainly from our townships in China. In Singapore, almost 400 units were sold,' said Mr Kevin Wong, KepLand's group chief executive officer.

It sold 384 units last year, mostly from its Marina Bay Suites, Caribbean, Reflections and Madison Residences projects, at average prices of $2,200-2,500, $1,900, $1,950 and $1,700 per sq ft, respectively.

Full-year property investment income fell by 7 per cent, largely due to the impact of a write-back of costs from KepLand's restructured ownership at One Raffles Quay in 2008.

The total net fair value gain for the year was $30.2 million, including $19.1 million in value gains from the upcoming Marina Bay Financial Centre (MBFC) Towers One and Two, which were partially offset from losses in fair values of K-Reit Asia's properties including Prudential Tower, One Raffles Quay, Keppel and GE Towers and the Bugis Junction Towers.

K-Reit Asia is a KepLand private property fund management vehicle, focusing on commercial properties.

The rest of the $11.1 million in fair value gains resulted from KepLand's additional stake in K-Reit Asia, which had resulted from a rights issue in October last year.

KepLand plans to launch 5,500 homes around Asia for sale this year - mainly in China and Vietnam.

At home, remaining units in Marina Bay Suites and an official launch of Reflections will be timed to coincide with the openings of the integrated resorts. Any possible price increases remain unconfirmed.

Earnings per share rose to 24.2 cents from 22.4 cents for the full year 2009.

Net asset value per share dropped to $2.36 from $3.39 as a result of an increase in shareholders' units to 1.4 billion after a rights issue last June.

KepLand's shares rose one cent to $3.44 yesterday prior to the release of the group's results.

The company's directors proposed a final dividend of eight cents a share, unchanged from the previous year.