Keppel Land Q3 net profit rises 28.5% to $74.5m

THE strong performance of its associated companies and a divestment gain helped drive Keppel Land's third-quarter net profit up 28.5 per cent, to $74.5 million.

Revenue for the three months ended September rose 49 per cent to $166.4 million, from $111.7 million a year earlier.

This was due to revenue rising $62 million for the property trading segment, $2 million for the fund management segment, and $1.8 million for the hotels and resorts segment, partly offset by a $7.7 million fall in revenue from the property investment segment and a $3.4 million drop in the "others" segment.

But cost of sales more than doubled from $46 million to $120 million, resulting in Q3 gross profit falling 29.4 per cent to $46.3 million.

The property group's Q3 results were boosted by a non-recurring gain of $16.7 million from the divestment of its 22.7 per cent effective interest in Saigon Centre Phase 2. The quarter also saw the share of results of associated companies rising 60.3 per cent to $47.7 million. The strong performance of the associated companies came mainly from Marina Bay Suites and Keppel Reit (known previously as K-Reit Asia).

For the first nine months of the year, Keppel Land saw net profit surge 62.2 per cent to $311.1 million. Revenue dropped 18.6 per cent to $466.9 million.

In Singapore, the group sold about 320 homes in the first nine months of the year, with the bulk from its suburban development The Luxurie in Sengkang.

Of this, 120 units were sold in Q3, versus about 100 units in Q2.

In addition, the group submitted a top bid of $434.6 million for a suburban residential site along New Upper Changi Road, with plans to develop about 700 residential units ranging from one- to four-bedrooms upon award of the site.

On the overseas residential sales front, China recorded lower sales of about 290 units in Q3, mostly from The Springdale in Shanghai and Central Park City in Wuxi as sales launches were pushed back.

That being said, the group has expanded its presence in Chengdu through the recent acquisition of a 28.7-ha prime residential site in Xinjin County for about $133 million. Located in the prime residential enclave of Mumashan, the new development will be the group's fifth residential project in Chengdu and will provide over 570 landed homes.

The property fund management business continued to grow its property portfolio, with Keppel Reit expanding its prime office portfolio in Australia with the acquisition of a 50 per cent interest in a new 35-storey office tower to be constructed in Perth's Central Business District (CBD).

Separately, Alpha Asia Macro Trends Fund (AAMTF) has completed the divestment of two serviced apartments in Hong Kong, and its follow-on fund, AAMTF II, has acquired a 50 per cent stake in 78 Shenton Way and sold off a high-end residential unit in Singapore.

As at end-September, the group had cash and cash equivalents of about $1.5 billion. Earnings per share for the nine months rose 57.3 per cent to 20.6 cents, from 13.1 cents a year ago.

Keppel Land shares slipped 2 cents to close at $3.45 yesterday.