GuocoLand's Q4 net profit halves to $32.2 million from $63 million

Developer GuocoLand's fourth quarter net earnings nearly halved to $32.2 million from $63 million previously.

Revenue for the three months to June 30 fell by 47 per cent to $168.6 million.

The fall in revenue and gross profit were mainly due to lower progressive recognition for Goodwood Residence.

A buyer's deposit amounting to $41.9 million for the purchase of certain Goodwood Residence units under the deferred payment scheme was forfeited and recorded in other income.

Goodwood Residence obtained its temporary occupation permit in June.

Fourth quarter earnings per share slipped to 2.82 cents from 5.68 cents previously while net asset value per share inched up by four cents to $2.20.

GuocoLand ended the financial year with a pretax profit of $98.5 million on the back of a revenue of $677.4 million.

Revenue achieved was on a par with last year but gross profit declined by 29 per cent.

The decline was mainly due to additional construction cost for Goodwood Residence and Sophia Residence in the current year as a result of higher estimated completion cost arising from default by the main contractor, which has come under judicial management.

Other income increased by $81.5 million, mainly due to the fair value gain recognised for the group's investment properties and income recognised from a customer's deposit for the purchase of certain units in Goodwood Residence.

Looking ahead, GuocoLand noted the business environment in its key markets continue to be challenging.

Sentiment in the luxury segment in Singapore remains cautious.

"The series of government cooling measures since 2010, including the recent introduction of a total debt servicing ratio framework for all property loans, have dampened overall residential property sales," it said.

However, the China real estate sector showed strength and firm housing demand in the first half year despite central government controls on the market and slowing of economic growth.

The board has proposed an unchanged first and final dividend of five cents a share.