Keppel Land Q2 profit falls 16% to $52.7m

July 31, 2008
Keppel Land Q2 profit falls 16% to $52.7m
Lower turnover from home sales, property services and hotels
By UMA SHANKARI

KEPPEL Land, Singapore's third-largest developer by asset-size, said
yesterday its second-quarter profit fell 16.4 per cent as it sold
fewer homes in Singapore and abroad.

Net profit for the three months ended June 30, 2008 fell to $52.7
million from $63.0 million a year earlier.

Revenue fell 48.2 per cent to $185.9 million, from $359.2 million in
the year-ago period.

Keppel Land said that besides lower turnover from home sales, its
property services segment and hotels also saw lower revenue.

For first-half 2008, net profit fell 10 per cent to $113.0 million,
from $125.5 million a year earlier. Sales fell 29.9 per cent to $459
million, from $654.6 million previously.

The company's financials were hit by delayed launches. In January
this year Keppel Land put off the launch of its Marina Bay Suites,
citing 'market conditions'.

'They have inventory in Singapore and among the biggest is Marina Bay
Suites,' CIMB-GK analyst Donald Chua told Bloomberg, adding that the
sale of the apartments could be a key growth driver in coming
quarters. 'It also depends on how fast they complete construction of
the Reflections condominiums to book earnings,' he said.

Keppel Land still hopes to launch the 221-unit Marina Bay Suites, as
well as the second phase of Reflections of Keppel Bay, some time in
the second half of this year. Other projects where units could be
sold include Park Infinia at Wee Nam, where there are still 52
apartments left, as well as Madison Residences. In all, the company
could launch 777 residential units by year-end.

'The group will continue to monitor the market and will launch
developments such as Marina Bay Suites, phase two of Reflections at
Keppel Bay and other residential projects when market sentiment
improves,' Keppel Land said in a filing to the Singapore Exchange
yesterday.

For the office sector, Keppel Land wants to improve the pre-
commitment level at its Marina Bay Financial Centre (MBFC), where
overall pre-commitment is 60 per cent. Phase one of the office
complex, with 1.6 million sq ft, will be completed in 2010.

Rents at MBFC are now in the region of $16 per sq ft, said Keppel
Land chief executive Kevin Wong.

The company also said it is on the lookout for acquisitions in
Singapore and overseas, and is exploring opportunities in the Middle
East and Russia.

Keppel Land's share price closed unchanged at $5 yesterday. The stock
has lost 31.3 per cent this year.