Keppel Land upbeat despite 16% fall in net gain

July 31, 2008
Keppel Land upbeat despite 16% fall in net gain
Take-up of mid-priced projects at recent launches 'encouraging'
By Yang Huiwen

THE property story has been one of gloom for months but Keppel Land
(KepLand) sees a silver lining in the dark clouds.

It said market sentiment appears to be more positive now compared to
the first quarter, 'judging from the encouraging take-up in recent
launches of mid-priced projects'.

But it added that market sentiment remained cautious due to 'slower
economic growth and a challenging external environment'.

KepLand, which has projects in China, Vietnam and India, said that
while regional property markets have been affected by higher mortgage
rates and credit-tightening, housing demand will continue to grow.

Despite a lift in spirits, the firm had to report a 16.4 per cent
slump in net profits for the three months to June 30 in the wake of
the cooling market in Singapore and in the region.

Earnings came in at $52.7 million, down from $63 million in the same
period a year ago, after property sales were almost halved.

Revenue plunged 48.2 per cent from $359.2 million to $185.9 million,
partly on lower contributions from residential projects after they
had been completed.

Singapore remains a stalwart for the firm, contributing over 70 per
cent in net profits for the quarter.

The firm is expected to launch its prime residential projects,
including Marina Bay Suites and Phase Two of Reflections at Keppel
Bay, when sentiment improves.

KepLand also expects to benefit from the buoyant office market. It
forecasts positive rental revisions that will be supported by strong
demand for prime space over the next few years.

Earnings per share was 7.3 cents, down from 8.8 cents for the same
period last year. Net asset value per share was $3.13 as at June 30,
down from $3.18 at Dec 31.

Net profit for the six months was down 10 per cent at $112.96 million
while revenue fell 29.9 per cent to $459 million. No dividend has
been declared for the half-year ended June 30.

KepLand shares closed unchanged at $5 ahead of the earnings
announcement yesterday. They have fallen by more than 30 per cent
this year.