Ho Bee Land's Q4 net profit down on lower fair value gain

Property group Ho Bee Land posted a sharp 33.1 per cent drop in fourth-quarter net profit owing to lower fair value gain of investment properties.

Earnings for the three months to Dec 31 was $129.5 million, markedly lower than the $193.7 million in the corresponding period a year before.

The decline was largely due to a lower gain in fair value of investment properties at $104.1 million, compared with $186.4 million in the preceding year, the firm reported yesterday.

Fourth-quarter revenue climbed 18.7 per cent year on year to about $42.5 million, driven mainly by the sales recognition of two Australian residential projects - in Melbourne and the Gold Coast, completed in the first half of last year.

These projects also boosted full-year turnover to $299.4 million, more than double the $129.9 million recorded in the 2015 financial year.

  • AT A GLANCE (Fourth Quarter)

  • GROUP REVENUE: $42.5 million (+18.7%)

    NET PROFIT: $129.5 million (-33.1%)

    DIVIDEND PER SHARE: Six cents (-14.3%)

However, it booked a foreign exchange loss of $12.2 million during the year as a result of the plunge in the British pound in the wake of the Brexit referendum last June.

Full-year net profit fell by 10.5 per cent to $216.8 million last year, from $242.2 million in the previous year - similarly dragged down by lower fair value gain of investment properties.

"Despite the foreign exchange loss arising from Brexit and the challenging real estate environment, the group had performed reasonably well," said chairman and chief executive Chua Thian Poh.

"This good performance is attributed to the solid recurring income from our investment properties as well as the contributions from our Australia and China development projects," he noted.

Ho Bee said the share of profits in associates from the Shanghai and Zhuhai projects in China rose 74 per cent year on year to $29.6 million last year.

Share of profits from jointly controlled entities in Tangshan and Sentosa Cove also did better last year at $3.7 million, reversing the loss of $39.8 million in 2015.

Quarterly earnings per share was 19.5 cents, down from 29.1 cents a year before, while net asset value per share came in at $4.39 as at Dec 31, higher than $4.23 at the end of 2015.

"The group's operating performance is expected to remain profitable because of our sustainable business model," the firm said.

It has recommended a proposed first and final dividend of six cents per share for the 2016 fiscal year.

The counter closed up two cents to $2.30 yesterday, before the earnings were announced.

A version of this article appeared in the print edition of The Straits Times on February 28, 2017, with the headline 'Ho Bee Land's Q4 net profit down on lower fair value gain'. Print Edition | Subscribe