SINGAPORE (Feb 25): Ho Bee Land has reported 4Q18 earnings of $81.4 million, or 12.24 cents on a per share basis, 21% lower compared to a year ago.
The weaker bottomline was mainly to the provision for a potential tax liability of approximately $20.3 million. This relates to the gain on sale of Hotel Windsor in FY2013. The tax authority has raised an additional tax assessment in FY18. Ho Bee Land says it has objected to the assessment based on professional advice.
Group revenue for 4Q18 amounted to $52.5 million, representing a 27% year-on-year increase. Revenue from sale of development properties fell 73.6% to $0.9 million due to lower sales recognition from two residential projects in Melbourne and Gold Coast in Australia while revenue from rental income rose 36.7% to $51.5 million due mainly to higher rental revenue from Ropemaker Place, which was acquired on June 15 2018.
The group recorded a net fair value gain of $93 million on its investment properties in the United Kingdom and Singapore.
Profit from operations increased 24% to $127.6 million in 4Q18 compared to $103.1 million in 4Q17.
The group’s share of profit in associates, contributed by the development projects in Shanghai and Zhuhai, fell by $15.5 million to $10.1 million in 4Q18.
The group’s share of losses in jointly controlled entities was higher in 4Q18 largely attributable to lower profits from the residential development project in Tangshan.
For FY18, earnings came in at $270 million, up 8.3% from a year ago as revenue rose 19.5% to $196.8 million, due to higher rental income from Ropemaker Place and fair value gain on investment properties of $121.4 million, which more than offset the increase in finance costs.
Ho Bee Land is recommending a first and final cash dividend of 8 cents per ordinary share and special cash dividend of 2 cents per ordinary share, unchanged from a year ago.
In its outlook, Ho Bee Land says the Singapore office market is expected to remain positive in view of stable demand and tightened supply. In the UK, it says its long average tenancies of more than five years will cushion any negative impact that may arise from the uncertainties brought about by Brexit in the near term.
On the local residential front, the group expects the market to remain challenging in view of the high number of properties in the supply pipeline and the impact brought about by the new cooling measures introduced in the second half of 2018.
Chua Thian Poh, chairman and CEO of the group, says, “We are pleased to announce a good set of results for the year despite challenging market conditions and economic uncertainty both locally and in other key markets. Our portfolio of investment properties in Singapore and the UK has continued to deliver strong rental income.”
Shares in Ho Bee Land closed at $2.51 on Monday.
