Keppel Land reported the previous day a 10.4 percent rise in its second quarter earnings. The company also stated that as the property market gets better, it will accelerate launches in the region and in Singapore.
CEO Kevin Wong said at a briefing, “With improved market sentiment, we plan to launch Madison Residences and The Promont in the second half of 2009”. The CEO also added that in one to two months’ time, they will be launched at market prices.
Keppel Land declared $58.2 million net profit for the second quarter – increased 10.4 percent from the previous year. The rise was driven by the $249.9 million or 34.4 percent increase in sales. The company has apparently improved its performance compared to the previous quarter, reflecting the property sector’s recent recovery. Since the first quarter up to the second, Keppel’s net profit rose about 57.7 percent, heightened by a 60.3 percent share from property trading.
Overseas and local residential projects gave substantial contributions, counting The Tresor, Marina Bay Residences and The Sixth Avenue Residences which all did well. On the other hand, the Marina Bay Suites project is still being considered by Keppel, with the probability of launching it depending on the further improvement in the market.
Over 1,440 units were sold by Keppel in China during the year’s first half. They have also continued their sales at The Estella in Vietnam.
Property investment also got better by 5.2 percent from the previous quarter due to K-Reit Asia’s contribution as well as higher rental income from Singapore.
The company also noted that the stabilization in the economy resulted to a more active office leasing market. Furthermore, pre-lease negotiations have commenced for Ocean Financial Centre and leasing enquiries have also arrived for Marina Bay Financial Centre’s first and second phase, having pre-commitment rates of roughly 66 percent and 55 percent, respectively.
On the contrary, fund management earnings have dropped from the first quarter, though resorts, hotels and other businesses revealed minor loss.
Alpha Investment Partners, Keppel’s private fund management vehicle, manages a few funds. Alpha Asia Macro Trends Fund invested about 11 percent of the $1.7 billion it has raised.
Keppel’s net debt-to-equity ratio rested at 0.23 by the end of the second quarter. This figure fell from last year’s 0.54, following the rights issue which the company undertook last April, resulting to $707 million gross proceeds.
Keppel Land stated that the company’s fund management and property development divisions are enthusiastically searching to earn assets, being backed by a $1.2 billion cash position.
The weak performance during the first quarter has dragged the first half results of the company. Keppel Land’s net profit for the first half fell about 15.8 percent from the previous year, while a 13.8 percent drop was recorded from the sales. Keppel did not announce a dividend for the period.