Progressive revenue recognition from Concourse Skyline boosts Hong Fok's gains

Developer Hong Fok Corp's third quarter net profit more than doubled to $18.7 million from $7.1 million in the same period last year.

Revenue improved by 13 per cent to $57 million for the three months to Sept 30.

This was due mainly to higher sales revenue recognised from the residential units of the Concourse Skyline based on the percentage of completion method.

The increase in other income was due mainly to compensation income relating to the leases of its investment properties.

With an increase in sales revenue from the units of Concourse Skyline, Hong Fok recorded a corresponding increase in cost of sales of these properties.

The gain on remeasurement of other investments was due to the recorded bid price being higher in the current period as compared to the previous period.

Earnings per share swelled to 2.37 cents from 0.9 cent previously while net asset value per share climbed to $1.58 compared to $1.52 as of Dec 31.

Looking ahead, the group expects the office rental revenue to remain stable.

It will continue to recognise revenue from the sold residential units of Concourse Skyline.

In February, a wholly owned subsidiary obtained permission from the Urban Redevelopment Authority and paid a development charge in respect of the proposed additions and alterations to the existing International Building involving an extension of a single storey commercial block and redevelopment of the existing car park block to a new 27 storey hotel at Claymore Hill,

With this proposed redevelopment, the group expects an increase in the revaluation of these properties within the next 12 months.