Allgreen Q2 profit falls 36.5% as revenue slumps

August 1, 2008
Allgreen Q2 profit falls 36.5% as revenue slumps
Company expects lower earnings from development properties in H2
By LYNETTE KHOO

DENTED by continued weak sentiment in the property market, Allgreen
Properties' net profit for the second quarter ended June 30 fell 36.5
per cent to $17.19 million.

This came as revenue for the quarter slumped 39 per cent to $74.12
million due mainly to slower residential sales.

This resulted in the number of units sold in the first half of this
year dropping significantly from the previous corresponding period.

Q2 earnings per share fell to 1.08 cents from 1.74 cents in Q2 2007.

A bright spot in Q2 was the continued improvement in revenue from
investment properties from a year ago because of higher rental rates
from offices, serviced apartments and retail space.

The revenue from Traders Hotel also improved, thanks to higher room
rates.

'The current poor sentiment in the property market is likely to
continue for the rest of the year and will result in lower profits
from development properties for the second half of 2008 as compared
to the second half of 2007,' Allgreen said in its financial statement
yesterday.

For the first half, Allgreen's net profit slipped 54.8 per cent to
$34.64 million, mainly due to lower revenue and lower writeback of
provision for diminution in value of development properties.

Its revenue of $162 million for the first six months was 46.52 lower
than a year ago, mainly due to the decrease in revenue from
development properties.

Distribution and selling expenses for the first half rose 36.3 per
cent to $9.63 million due mainly to higher showflat expenses as the
group prepared its projects for launches.

Allgreen also incurred higher finance cost as borrowings increased
for overseas investments, both in China and Vietnam, and for land
purchases in Singapore.

'Despite the drop in revenue and profits in the first half, the
group's results for the year 2008 are expected to be profitable,' it
said.

Allgreen shares closed unchanged at 93 cents yesterday.