The developer of Mon Jervois near River Valley Road coughed up $14.8 million in additional buyer's stamp duty (ABSD) in February for not meeting a regulatory sale deadline.
This was disclosed yesterday by United Industrial Corp (UIC), which posted near-flat earnings of $59.8 million for the first quarter.
The ABSD deadline for Mon Jervois - which was developed by Singapore Land - was February.
The payment was not a surprise as Mr Michael Ng, group general manager of UIC, SingLand's parent company, had signalled its intent last November. "For Mon Jervois, if we have to pay ABSD, I think our margins will be able to absorb that and still provide a decent profit. It may be better to hold on to the units and try to sell at a higher price later on as the market for this segment is improving," he had said.
The clock started ticking for developers in December 2011 with new rules that they must build and sell all units in a residential project within five years of buying the site. If they fail to move the units, they face a 10 per cent levy on the site's purchase price plus 5 per cent interest. The levy was later raised to 15 per cent for sites bought from Jan 12, 2013.
Despite flat earnings, UIC chalked up a 31 per cent jump in revenue for the three months to March 31 to $264.5 million. The gain was mainly due to higher sales recognition from trading properties.
AT A GLANCE
REVENUE: $264.5 million (+31%)
NET PROFIT: $59.8 million (unchanged)
Revenue recognised from the sales of trading properties soared by 81 per cent to $127.3 million, mainly due to higher progressive revenue recognition for the group's residential projects, particularly from V on Shenton and Alex Residences.
Revenue from information technology operations increased by 17 per cent to $27.6 million, while revenue from hotel operations inched up 3 per cent to $37.3 million.
Gross rental income from investment properties remained stable at $69 million, compared with $68.7 million in the same period last year.
Profit before share of results of associated companies and joint ventures amounted to $70.5 million, which was higher than last year's by $1.5 million or 2 per cent.
Earnings per share were unchanged at 4.2 cents while net asset value per share firmed to $4.43, compared with $4.39 as at Dec 31.
UIC noted that a steady take-up rate for office and retail spaces has trimmed oversupply and should ease pressure on rentals. "The improving sentiments and increased number of high bidders for recent residential land sales are expected to raise buying interest and confidence in this sector," it said.
However, the hotel sector will remain competitive with increased new hotel room supply.
UIC shares ended unchanged yesterday at $3.16.