Impairment loss in China project hits Q3 earnings at Tuan Sing

SINGAPORE - Tuan Sing Holdings reported an 8 per cen t drop in third quarter net profit to $16.2 million, due to an impairment loss of $7.7 million relating to its development land in Fuzhou China.

Revenue for the three months to Sept 30 rose by 85 per cent to $184.3 million, mainly due to higher revenue recognised for Seletar Park Residence, Sennett Residence and Cluny Park Residence based on progressive revenue recognition and the consolidation of revenue of the Grand Hotel Group (GHG), following the Tuan Sing's acquisition of the remaining 50 per cent interest in GHG in December last year.

The increase in gross profit was in line with higher revenue and was further boosted by relatively higher gross margin from GHG.

Excluding the impact of the impairment loss, net profit would have been $23.9 million or 36 per cent higher than the same period last year, thanks to higher contributions from property in Singapore and hotels investment in Australia.

Earnings per share slipped to 1.4 cents from 1.5 cents in the same period last year.

Net value per share climbed to 71.8 cents compared to 68.3 cents as at Dec 31.

On its prospects, Tuan Sing noted that its residential projects - Seletar Park Residence, Sennett Residence and Cluny Park Residence - are about 98 per cent, 93 per cent and 48 per cent sold, respectively.

Its total order book increased to $788.6 million, the majority of which has been recognised.

The bulk of the group's revenue and profit this year will continue to come from these three residential projects as construction progresses, said Tuan Sing.

Its commercial development Robinson Point has been fully leased under various leases ending in 2017 and 2018.

At the redevelopment of the Robinson Tower site, piling work will soon be completed and building construction is expected to commence by early next year.

This building will have a planned gross floor area of 259,250 square feet and total lettable area of about 194,380 square feet.

When completed sometime in early 2018, it is expected to be a platform for future growth of the group in the commercial sector, said Tuan Sing.

GHG is expected to perform satisfactorily in the remaining part of the year as the group's effort in driving a better performance from GHG bears fruit.

However, activities in China remain subdued and the group is reviewing its strategy in the country.

Tuan Sing said it will continue to seek well-located sites with strong value offering for residential and commercial development for both Singapore and other overseas markets.