Niche property developer stumbled hard revenue-wise.
Taking the 3Q12 results with the previous two quarters, Heeton Holdings said it recorded a profit attributable to shareholders of $11.1 million, on revenue of $28.9 million, for the nine months ended 30 September 2012 (9M12), or a 46.6% dip yoy.
"The decline in revenue reflects lower sales recognition based on percentage of completion method, from Lincoln Suites, a project under construction, and The Lumos, which received its temporary occupation permit (TOP) in August 2011. In addition, there was a revision in accounting treatment on its Singapore residential development projects for property units sold under deferred payment scheme using the completion of construction method, which resulted in significant increase in revenue, cost of sales and profit for 9M11," said Heeton Holdings in a release.
"With the completion of The Lumos, cost of properties sold also fell significantly, to $10.1 million in 9M2012 from $39.3 million in 9M2011. Consequently, and taking into account the net effect of other operating income, finance expenses and income from associates, the Group recorded a profit before tax of $12.8 million, versus $25.4 million a year ago. During its financial third-quarter (3Q2012), the Group joined forces with various partners to acquire a total of three sites. The first of these is a $31 million, 21,900 sq ft plot in Whitley Road with the potential to be redeveloped into five pairs of semi-detached houses. Heeton has a 30% interest in this project," it added.
The second plot, located at Sam Leong Road in district 8, is a $40.3 million, 12,362 sq ft freehold commercial land parcel with a plot ratio of 3.0, while the third is a 13,282 sq ft freehold residential site at Lorong 32 Geylang, with a plot ratio of 2.8. Heeton holds a 15% stake in the former plot and 10% stake in the latter.
In August, the Group launched Palacio, a freehold cluster housing development at Telok Kurau Road, and has sold over 50% of its 21 units to date.
"Going forward, the Group expects buyer sentiment to be tempered by property cooling measures introduced over the past year. Nevertheless, buyer sentiment should remain healthy with a higher percentage of transactions expected to be carried out by property upgraders, rather than property investors. Riding the buoyant sentiment, it has launched Sky Green, a residential project at MacPherson Road to very positive response with about 70% of the units being snapped up during the day of its soft-launch in late October. The project is currently more than 85% sold," said Heeton Holdings.
The Group is making good progress with the construction of The Boutiq, and expects to recognise its share of profit from the sale of these units in the coming months. To date, more than 80%of the development’s 130 units have been sold. While it looks forward to positive contribution from its existing and pipeline projects, Heeton is mindful of the uncertainties in the macroeconomic climate as well as the possible introduction of more property cooling measures by the Government. On this note, it will adopt a prudent approach towards the evaluation of each opportunity before embarking on further acquisition of land parcels.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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