Wing Tai's Q4 net slumps 60%

August 27, 2008
Wing Tai's Q4 net slumps 60%
Home sellers seen unlikely to resort to fire-sale - at least until
2010
By UMA SHANKARI

PROPERTY group Wing Tai Holdings yesterday said that net profit for
its fourth quarter fell by more than half as it sold fewer homes and
saw lower fair value gains from investment properties.

At the same time, chairman Cheng Wai Keung, known for his often
candid assessments of the property market, said that while home
prices could see some adjustment in 2008 and 2009, sellers are
unlikely to have a 'fire sale' of their properties - at least until
2010.

This is because home prices in Singapore started climbing rapidly
only in 2006 and 2007, and buyers of these newer properties will see
the projects completed only from 2010 onwards. The push to offload
their units will happen only then, he said.

The company's net profit for the three months ended June 30 fell 60
per cent to $96.3 million, from $243.2 million a year ago. Fair value
gains on investment properties dropped to $90.6 million from $189
million.

Revenue for the fourth quarter fell 57 per cent to $107.3 million,
down from $249.1 million in Q4 2007. Among other projects, revenue
was contributed by units sold in The Riverine by the Park in
Singapore.

Earnings per share fell to 12.45 cents, from 33.83 cents a year ago.

Wing Tai has declared a dividend of six cents a share, comprising a
first and final dividend of three cents and a special dividend of
three cents.

For the entire 2008 financial year, Wing Tai reported that net profit
fell some 40 per cent to $229.4 million, from $381.8 million in
FY2007.

Revenue for the 12 months fell 56 per cent to $428.2 million, from
$981.6 million a year ago.

Wing Tai said in a filing to the Singapore Exchange that the
underlying fundamentals of the property market are still sound.

'I have always believed that property is actually a reflection of the
fundamental strength of the economy,' said Mr Cheng. However,
sentiment has a part to play too, he admitted.

Wing Tai sold some 205 units in Singapore during the financial year,
although the majority of units were sold in the last six months of
2007.

The company has some 1.4 million square feet in its residential land
bank, but no new launches are planned for the moment, Mr Cheng said.