GuocoLand FY08 net falls 43% to $162m

August 23, 2008
GuocoLand FY08 net falls 43% to $162m
By UMA SHANKARI

PROPERTY developer GuocoLand's earnings for the full year ended June
30 fell 43 per cent as it saw lower sales from its property
development projects in Singapore and a one-third fall in other
income.

Net profit attributable to equity-holders fell to $161.84 million
from FY2007's $281.89 million. Earnings per share dropped to 20.17
cents from 46.15 cents.

Revenue for the 12 months dipped 4 per cent to $670.9 million, from
$702.5 million a year ago. Gross profit fell 12 per cent to $135.3
million.

The bottom line was also hit by a $63.9 million or 33 per cent fall
in other income to $130.8 million. This came as interest income and
net foreign exchange gains were more than wiped out by lower
revaluation gain from investment properties and lower investment
property provision writeback.

The group was also hit by higher income tax, mainly from its property
development projects in China.

Finance costs also rose 22 per cent to $39.4 million due to higher
bank borrowings and interest rates.

GuocoLand - which has operations in Singapore, China, Malaysia and
Vietnam - did not provide separate numbers for its fourth quarter.

The group acknowledged that the property markets in the countries
where it operates are slowing down as developers and buyers adopt a
more cautious stance. But in the medium term, it expects these
countries' economies to remain resilient and grow.

'Coupled with the implementation of regulatory measures and macro-
economic policies to control inflation and prevent overheating of the
economy and property markets, the attraction of Asia as a growth
region should have positive effects on the demand for quality housing
in these countries,' GuocoLand said in a filing to the Singapore
Exchange.

For Singapore, the cautious sentiment in the property market is
evidenced by a slowdown and delay in property launches and a lower
take-up rate compared to 2007, GuocoLand noted. But the ongoing
development and subsequent completion of the two integrated resorts
and the Marina Bay Financial Centre should help economic growth in
the next few years, the developer added.

GuocoLand also said that it has increased its inventories from $1.6
billion to $4.5 billion over the past year, mainly due to an increase
in its land bank. Among other purchases, the company completed its en
bloc acquisitions of Sophia Court, Palm Beach Garden, Leedon Heights
and Toho Garden condominiums in Singapore.

GuocoLand shares lost six cents to close at a 52-week low of $2.06
yesterday. The stock has shed 63.5 per cent so far this year.