Alexandra Central mall completion turbo-charges Chip Eng Seng's gain

The crowd at the launch of Alexandra Central on Jan 21, 2013. Earnings for property developer Chip Eng Seng surged in its fourth quarter, mainly due to the completion of its first retail mall, Alexandra Central. -- ST PHOTO: LIM YAOHUI&nbsp
The crowd at the launch of Alexandra Central on Jan 21, 2013. Earnings for property developer Chip Eng Seng surged in its fourth quarter, mainly due to the completion of its first retail mall, Alexandra Central. -- ST PHOTO: LIM YAOHUI 

SINGAPORE - Earnings for property developer Chip Eng Seng surged in its fourth quarter, mainly due to the completion of its first retail mall, Alexandra Central.

Net profit jumped to $167.6 million for the three months to Dec 31, a 383.9 per cent gain from the preceding year, it said in a Singapore Exchange filing on Tuesday.

This was on the back of a 198.3 per cent climb in revenue to $289.8 million in the same period.

The spike in the firm's revenue and profits was largely due to accounting methods. For commercial properties, real estate developers book revenue from the project only when it is completed.

Since the Alexandra Central mall was completed in December last year, the revenue from sales at the development was recognised in the quarter ended Dec 31.

In contrast, property developers can recognise revenue progressively over a period of time for local residential condominium projects.

For the full year ended Dec 31, net profit went up 282.6 per cent to $280.7 million and revenue expanded 240.9 per cent to $765.6 million from the previous year.

The company also said that it plans to be "cautious" in buying Singapore land for development, since buyers are staying away due to property cooling measures and economic uncertainty.

Chip Eng Seng shares fell a cent to 96.5 cents before its financial results were released.