Saturday, March 30, 2013

Condo share lifts Low Keng Huat's Q4 profit

The Straits Times  |  MARCH 28, 2013
Revenue down 40%, but Hougang project helps boost earnings by 30%

A share in The Minton condo in Hougang helped construction and hotel company Low Keng Huat lift fourth-quarter net profit.

Earnings came in at $42.5 million, up 30 per cent on the same period a year ago, while revenue for the three months to Jan 31 was $25.3 million, down 40 per cent.

The Minton was jointly developed with real estate developer and investor Kheng Leong, and was launched in May 2010. All 1,145 units have been sold.

The company recorded a net profit of $110 million for the full year, up 28 per cent, while revenue figures fell 7 per cent year-on-year to $126 million.

Low Keng Huat reported that the fall in revenue was attributed to a reduction in construction activity, which accounts for two-thirds of its business.

Its cost of sales increased by 140 per cent to $70 million, mainly due to the completion of major construction projects last year.

Marketing and administrative expenses drove up costs by $35 million for two ongoing development projects - Paya Lebar Square and Parkland Residences.

Paya Lebar Square is a 10-storey mall and office building.

As of March 14 this year, 94 per cent of its office units have been sold, while it registered 72 per cent of leasing commitments for the retail space.

Parkland Residences is a 680-unit Design, Build and Sell Scheme residential project in Upper Serangoon. Options for 97 per cent of its units have been issued as of March 14.

Revenue from Low Keng Huat's hotel and food and beverage business climbed 10.3 per cent to $57 million.

This stemmed from higher occupancy rates and room rates at its Duxton Hotel in Perth and the opening of new food outlets at the Marina Bay Sands in October 2011 and Dempsey Road in March last year.

Earnings per share was 5.77 cents in the fourth quarter, up from 4.38 cents in the same period last year, while net asset value per share was 65 cents, up from 53 cents previously. Low Keng Huat shares closed three cents higher at 73 cents on Thursday.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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