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GuocoLand reports nearly three times higher earnings of $67.5 mil in 1HFY2021/2022

·3-min read

Shares in GuocoLand closed 2 cents higher or 1.35% up at $1.50 on Jan 26.

GuocoLand Limited has reported earnings of $67.5 million in the 1HFY2021/2022 ended December, nearly three times higher than earnings of $22.9 million from the same period a year ago.

Earnings per share (EPS) stood at 5.22 cents, from 1.20 cents in the year before.

The higher earnings came on the back of higher revenue, which grew 42% y-o-y to $452.7 million.

The group’s revenue growth was mainly attributable to the higher progressive recognition of sales from the group’s residential developments in Singapore, Meyer Mansion, Midtown Bay and Midtown Modern.

The group also saw higher sales contributions from Guoco Changfeng City in China in the 1HFY2021/2022.

In addition, revenue from its investment properties increased by 3%, mostly from Guoco Tower, the group’s flagship integrated mixed-use development. Revenue from its hotel business also grew almost 10% y-o-y during the half-year period, due to the gradual relaxation of travel measures.

There was also a one-off profit of $14.3 million arising from the disposal of the group’s Vietnam subsidiaries recorded during the period.

Despite the higher cost of sales at $312.6 million, up 39% y-o-y, gross profit stood 48% higher y-o-y at $140.2 million for the half-year period.

The group’s gross profit margin (GPM) stood stable at around 30%.

Other income rose 76% y-o-y to $32.9 million mainly due to higher fair value gain on interest rate hedges. However, the appreciation of the Chinese renminbi against the Singapore dollar during the period saw higher net foreign exchange losses, which was recorded in other expenses.

Meanwhile, share of profit of associates and joint ventures fell by $8.9 million due to lower profit contributed from EcoWorld International Berhad as compared to the previous corresponding period.

Segmentally, GuocoLand Singapore remains the group’s key contributor, with its revenue rising 40% y-o-y to $349.2 million.

Revenue from GuocoLand China surged slightly over five times to $51.1 million in the 1HFY2021/2022 from $10.0 million previously mainly due to sales from Guoco Changfeng City.

GuocoLand Malaysia’s revenue fell 26% y-o-y to $41.6 million due to lower progressive recognition of sales.

Revenue from hotels increased by 10% y-o-y to $10.7 million, while EcoWorld International recorded a higher loss due to the absence of profit.

As at end-December, cash and cash equivalents stood at $1.31 billion.

In the same period, the group’s total assets rose to $12.1 million, mainly due to its acquisition of a 17,279.9 sqm Government Land Sales (GLS) site at Lentor Central in July 2021. The upcoming mixed-use development at Lentor Central will add another 600 residential units to the group’s pipeline.

When fully operational, the development’s commercial and retail aspects will be accretive to the group’s investment portfolio and recurrent income.

“Our long-term goal of transforming into a multi-faceted real estate company is progressing steadily. In addition to a strong pipeline of residential homes for sale in all three core markets of Singapore, China and Malaysia, we have also built up a strong portfolio of investment assets providing growing recurring income. These set the stage for future strategies to unlock the value of our assets, as well as to pursue growth,” says Cheng Hsing Yao, CEO of GuocoLand Group.

Looking ahead, Cheng adds that “2022 will see the completion of two key integrated mixed-use developments, namely Guoco Midtown in Singapore and Guoco Changfeng City in Shanghai.”

Shares in GuocoLand closed 2 cents higher or 1.35% up at $1.50 on Jan 26.

Photo: GuocoLand

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