Thursday, January 24, 2013

KepLand mulls over cutting home prices if market falls


The Straits Times
January 24, 2013

THE boss of property developer Keppel Land has flagged a possible cut to its home prices if the market falls away in response to the Government's recent cooling measures.

"We will monitor the market... If the market comes down and we can't sell our projects, then we'll have to cut prices," said recently installed chief executive Ang Wee Gee.

He was speaking at a briefing yesterday, where the firm announced a 39 per cent decline in full-year net profit to $838.4 million a year earlier.

But turnover for the 12 months to Dec 31 was largely flat, dipping 1.1 per cent year on year to $938.9 million.

For the fourth quarter, net profit slid a steeper 55.4 per cent to $527.3 million on a 25.8 per cent jump in turnover to $471.9 million.

The drop in full-year earnings was largely because of a record net profit for full year 2011 due to a one-time gain from its $480.3 million sale of its stake in Ocean Financial Centre.

Excluding gains from divestment and revaluation, the firm's net profit was $451.5 million for the full year.

This is 61.4 per cent higher than the $279.7 million net profit excluding divestment and revaluation gains in 2011, Keppel Land said in a statement.

A strong performance from property trading helped to cushion the net profit decline. Net profit from this segment shot up 68.5 per cent to $323.9 million for the year.

Keppel Land cited stronger earnings from projects such as Reflections at Keppel Bay and Marina Bay Suites.

Mr Ang, who took the reins at the start of this year, said at the briefing that a 622-unit condominium it is developing in Sengkang, The Luxurie, has only eight unsold units left.

The Luxurie accounted for the bulk of the 430 residential units Keppel Land sold in Singapore last year.

Mr Ang also disclosed that Keppel Land was in the midst of designing a residential site at New Upper Changi Road next to Tanah Merah MRT and design work for another site at Keppel Bay was "at an advanced stage".

It would "monitor the market closely for a suitable time" to launch those two projects, Mr Ang said.

About half of the developer's total assets are in Singapore and 35 per cent are in China, where Keppel Land sold 1,650 homes last year.

Earnings per share were 55.5 cents for the year, down from 93.8 cents in 2011. Net asset value per share was $3.99 as at Dec 31 last year, up from a restated $3.74 as at Dec 31, 2011.

Keppel Land proposed a final dividend of 12 cents per share.

Its counter closed five cents higher at $4.06 yesterday.


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