SINGAPORE - Real-estate based SingHaiyi Group has reported a 47.1 per cent drop in fourth quarter earnings to $8.4 million.
This was despite a 63.8 per cent rise in revenue to $8.1 million for the three months to March 31.
The increase was mainly due to contributions from the group's Pasir Ris One project, a more fanciful type of public housing, and sales of completed units from Vietnam Town, a project in the United States.
Other income produced a loss of $2.2 million against a gain of $18.1 million previously.
Gross profit margin decreased by 14.4 percentage points, due to the change in revenue mix as more revenue from property development with a lower profit margin was recognised. Gross profit margin of rental income remains stable.
Share of profits from associates shot up to $29.7 million compared to a loss of $450,000 in the same period last year.
On the other hand, other operating expenses ballooned to $10.7 million, arising from the fair value loss on investment properties of some $6.4 million and allowance for a fall in value of a development project, City Suites of $3.9 million.
Fourth quarter earnings per share eased to 0.292 cent from 0.552 cent previously while net asset value per share climbed by 0.65 cent to 16.15 cents.
Full year net profit rose by 38.4 per cent to $$29.3 million on revenue of $269.1 million.
SingHaiyi said the strong full-year results was underpinned mainly by higher property development income in Singapore from the completion of Pasir Ris One.
Correspondingly, revenue contribution from Singapore soared to $251 million for the full year compared to $1.4 million last year.
In the US, the group's real estate portfolio generated revenue of $18.1 million, comprising the sale of several completed residential units at Vietnam Town in San Jose, California and rental income, which was relatively stable year-on-year from Tri-County Mall, in Cincinnati, Ohio.
This compared to revenue of $19.4 million last year.
Pretax profit surged 78.7 per cent to $41.5 million, which was buoyed by strong share of profits of equity-accounted associates, net of tax mainly due to profit contributions from completion of CityLife@Tampines executive condominium (EC) project in the financial fourth quarter, as well as fair value gain from investment in the ARA Harmony Fund III, in which the group has a 25 per cent equity interest.
This was partially offset by higher expenses relating to marketing activities for The Vales, a recently launched EC, allowance made for diminution in the value of City Suites and fair value loss on investment properties.
The company has proposed a final dividend of 0.2 cent a share.
Looking ahead, SingHaiyi said its joint venture has successfully completed its
acquisition of Park Mall in December last year.
It will provide professional project and development management services for the redevelopment of the mall, in the Orchard Road area.
The revamped mall will include a new building comprising Grade A offices and retail spaces.
Redevelopment is expected to commence in the second half of the year and be completed by the end of the 2019.
Meanwhile, another of its commercial property, TripleOne Somerset, is expected to undergo asset enhancements, which will include enhancing its retail podium to create a sheltered connectivity to Somerset MRT as well as strata titling its office space for sale.
This asset enhancement initiative is expected to commence in second half year.