Wheelock reports 59.1% fall in Q3 earnings

(Abstract from Business Times 14th Nov, 2009 by Kalpana Rashiwala)

WHEELOCK Properties (Singapore) posted a 59.1 per cent year-on-year fall in third-quarter net earnings to $54.26 million. Revenue slipped 42 per cent to $133.1 million for the quarter ended Sept 30, 2009.

For the first nine months, net earnings decreased 43.6 per cent from 9M 2008 to almost $93 million. Revenue was 22.4 per cent lower at $296.5 million.

The group attributed lower revenue for Q3 and 9M 2009 chiefly to lower revenue recognition from Scotts Square based on the progress of construction works.

As well, the completion of The Sea View and The Cosmopolitan condos in Q2 and Q3 last year resulted in lower revenue in the latest period.

However, this was partly offset by higher revenue booked from Ardmore II based on the progress of construction works and revenue recognised from Orchard View, on which profit recognition began in Q3.

Wheelock had $337.4 million of investments in its balance sheet at Sept 30, 2009, an increase of $195 million from the figure at Dec 31, 2008.

The increase was due chiefly to a rise in market value of the group's investments in listed Hotel Properties Ltd (HPL) and SC Global Developments.

An impairment loss of $23 million was charged to the income statement in the first quarter ended March 31, 2009. And a subsequent increase in market value of $218 million from April 1 to Sept 30, 2009, was credited to the fair-value reserve under Financial Reporting Standard 39. As a result, shareholders' equity rose to $2.3 billion at end-September 2009, from $2.1 billion at end-2008.

The group's borrowings fell from $392 million at end-2008 to $232 million at end-September 2009 - largely due to repayment of an unsecured loan and part pre-payment of a secured loan from sales proceeds in the current financial period. The debt- to-equity ratio decreased from 19.1 per cent to 10.1 per cent over the same period.

Wheelock said return on shareholders' equity for 9M 2009 was 4.1 per cent, down from 7.5 per cent a year back.

Cash and cash equivalents fell from $756.7 million at end-2008 to $732.98 million at end-September 2009 - due to repayment of loans and dividend payouts. However, the group said it expects to strengthen its cash position with the completion of Ardmore II, which is fully sold, in the first half of 2010. 'We are in good stead to confidently pursue all good investments and development opportunities,' it said.

Wheelock's net asset value per share rose from $1.72 at end-2008 to $1.92 at end-September 2009. On the stock market yesterday, the counter closed a cent higher at $1.74.

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