MCL Land’s net earnings of an eye-popping US$48.7 million during the three months of the year was mainly attributed to a writeback of an impairment charge of US$51 million for The Estuary condominium project in Yishun. The group reported a net profit of US$1.4 million over the same period in 2009.
“The group’s results for 2010 should benefit from the completion of two development projects in Singapore, Waterfall Gardens and D’Pavilion, as well as the writeback of the impairment charge on The Estuary,” said YK Pang, chairman of MCL Land.
MCL recognizes profit and revenue on units sold in residential property developments when the projects obtain Temporary Occupation Permit (TOP). Unlike most other listed property groups, MCL does not record revenue and profit progressively as the projects are completed.
Waterfall Gardens at Farrer Road and D’Pavilion at Upper Serangoon Road are scheduled for completion by Q2 and Q4 2010, respectively. At Waterfall Gardens, all 132 units have been fully sold, while 74 percent of D’Pavilion’s 50 apartments were snapped up as at end-Q1 2010.
The Hongkong Land subsidiary writes back residential sites’ impairment charges when the projects are released and substantially sold.
Meanwhile, MCL continues to carry impairment charges of US$134 million against four other residential projects in Singapore – on the Nim Park site at Nim Road, the Nob Hill site in Ewe Boon Road, the Casa Nassau site at Upper East Coast Road, and the Dynasty Garden Court 1 plot at Sixth Avenue.
According to Koh Teck Chuan, CEO of MCL, the plan is to launch the Upper East Coast and Nim Road projects next year but hold back developments on the two other sites until the market improves further.
As at end-March 2010, the group had shareholder funds of US$583 million, up from US$533 million at 31 Dec 2009. Progress payments coming from the group’s development properties continued to boost its financial position with net cash of US$140 million at end-Q1 2010, compared with US$93 million at end-2009.
“Sentiment in Singapore’s residential property market remains positive, underpinned by an improving economic outlook,” noted Mr. Pang.
Net asset value per share increased to US$1.58 at end-March 2010 from US$1.44 at end-December 2009.
Earnings per share also rose to 13.15 US cents during Q1 2010 from 0.38 US cent over the same period last year.