Keppel Land profits jump 75% to $65m
Stellar performance by property trading arm
By Esther Teo
ROBUST residential sales in markets across Asia, in the wake of the economic recovery, sent first quarter net profits rocketing by 75.3 per cent at Keppel Land.
The developer reported earnings of $64.7 million for the three months to March 31, while revenue rose a more modest 9 per cent to $158.8 million, compared with $145.7 million in the same period last year.
Keppel Land's property trading segment was its star performer, with a 53.6 per cent increase in profits to $48.7 million.
This was thanks to increased contributions from the posh residential developments of Reflections and Caribbean, both at Keppel Bay, and the Marina Bay Suites.
Increased profit contributions from China also boosted overseas first quarter profits to $20.5 million - 31.7 per cent of total earnings, and up from a share of 25.5 per cent in the same period last year.
Residential projects such as The Arcadia in Tianjin and Villa Riviera in Shanghai did well, contributing profits of $10.2 million. Sales in Vietnam, Indonesia and India were also buoyant.
Property investment also performed well, as the office market took a positive turn. Profits from the segment increased 29.2 per cent year on year to $12.4 million, due mainly to the improved earnings of K-Reit Asia.
Grade A office occupancy had increased to 94.5 per cent from 93.8 per cent the previous quarter.
Higher fee income from the group's fund management vehicles - K-Reit Asia Management and Alpha Investment Partners - also bolstered net profit at its fund management segment to $7.4 million. This was up 60.9 per cent from the same period last year.
Earnings per share for the first quarter rose to 4.5 cents from 3.6 cents for the previous year, while net asset value per share was $2.43 as of March 31, up from $2.36 as at Dec 31 last year.
The company said it plans to launch another 100 to 200 units at Reflections at Keppel Bay in phases to capitalise on the continuing demand for premium residences near Resorts World Sentosa.
Marina Bay Suites will also be launched this year to capitalise on the opening of Marina Bay Sands.
Keppel Land said that besides Singapore, it will also focus on markets in China, India and the Middle East where there is a shortage of good-quality housing to satisfy the needs of their growing middle-class population.
However, the group acknowledges possible challenges such as political uncertainty. It also mentioned in its financial statement the economic uncertainties it would face if the rebound from the slowdown is not sustained.
Keppel Land's shares fell by seven cents yesterday to $3.66.
esthert@sph.com.sg
Reflections at Keppel Bay is one of the projects that contributed to a 53.6 per cent profit rise for Keppel Land's property trading arm. -- PHOTO: KEPPEL CORP
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