Keppel Land reported yesterday a 10.4 percent year-on-year increase in its second quarter profits. The company said it will accelerate launches in Singapore and the region while the market picks up.
According to CEO Kevin Wong during a briefing, “With improved market sentiment, we plan to launch Madison Residences and The Promont in the second half of 2009“. He added that it will have a debut in one to two months’ time at the market costs, which are difficult to establish currently because prices move quickly nowadays.
In the second quarter, Keppel Land reported $58.2 million net profit – up by 10.4% from last year. This was attributed by an increase of 34.4% in sales to $249.9 million.
Reflecting the latest uptrend in the sector, the performance of Keppel Land was notably improved than a quarter ago. The net profit during the second quarter was 57.7% higher than that in the first quarter, increased by a higher contribution of 60.3% from the property trading. The contributions were from overseas and local residential projects. Here, The Sixth Avenue Residences, The Tresor, and Marina Bay Residences, were some that did well. Additionally, Park Infinia at Wee Nam is nearly fully sold. Purchasers took 26 units from January to June at approximately $1,400 psf on average.
Keppel Land still restrains on the project of Marina Bay Suites and may perhaps launch it when the market gets better.
The group also sold more than 1,440 units in Mainland China in the first half of the year and started selling again at The Estella in Vietnam. It will speed up project launches in these two countries.
Despite property trading, investment of property also got better from the last quarter, by 5.2%. This was driven by Singapore’s greater rental income and a larger profit share from K-Reit Asia.
Keppel Land said the office leasing market became more alive as the economy is starting to stabilise. Pre-lease negotiations started for Ocean Financial Centre, and other leasing enquiries entered for Phases One and Two at Marina Bay Financial Centre, which include pre-commitment charges of around 66% and 55% respectively.
However, fund management earnings fell from the first quarter, while resorts, hotels, and several businesses reported a minor loss.
Alpha Investment Partners, private fund management vehicle of Keppel Land runs a couple of funds. Alpha Asia Macro Trends Fund boosts $1.7 billion and invested about 11% of this. The portfolio consists of a retail property in Tokyo, Japan.
As of June 30, the net debt-to-equity ratio of Keppel Land was at 0.23. This went down from 0.54 last year after the firm agreed to a rights issue last April, lifting gross profits of $707 million.
Supported by $1.2 billion cash position, Keppel Land stated that its fund management and property development divisions are dynamically anticipate in acquiring assets.
The first half results of Keppel Land were pulled by a weak performance during the first quarter. During the half year ended in June 30, the net profit was $95.1 million, decreased to 15.8 per cent from last year. Sales also decreased by 13.8% to $395.6 million. The firm did not declare the dividend for that period. Yesterday, the counter achieved 5 cents to close at $2.54.