SINGAPORE (Feb 1): GuocoLand posted a 25% drop in earnings to $43.0 million for the 2Q ended December, from $57.1 million a year ago.
This was mainly due to a lower share of profit of associates and joint ventures, as well as higher administrative and finance costs.
Revenue surged 60% to $370.6 million in 2Q, from $232.0 million a year ago.
This was attributed mainly to the stronger sales and higher progressive revenue recognition from residential projects in Singapore.
In line with the higher revenue, gross profit increased by 93% to $91.4 million.
Administrative expenses nearly doubled to $27.2 million, from $13.8 million a year ago.
This was due to higher sales activities and the opening of the group’s two new hotels, Sofitel Singapore City Centre and Sofitel Kuala Lumpur Damansara City.
Finance costs jumped 60% to $30.2 million in 2Q, from $18.9 million a year ago, due to higher average borrowings and lower capitalisation of finance cost.
Share of profit of associates and joint ventures fell 80% to $9.0 million in 2Q, from $44.8 million a year ago.
This was due to the absence of the one-time gain from the sale of a land parcel by an associate in the corresponding quarter a year ago.
As at end December, cash and cash equivalents stood at $840.8 million.
Looking ahead, GuocoLand notes that the private residential property market in Singapore is improving, with preliminary estimates showing that developers sold 23% more units in 2017, even as private home prices increased 1.0% during the year, compared to a 3.1% decline in 2016.
Shares of GuocoLand closed 1 cent lower at $2.25 on Thursday.
