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Ho Bee suffers $34.7m impairment loss from Sentosa condo stake

PropertyGuru

Cape Royale condominium in Sentosa Cove. (Photo: Jacklee/Wikimedia Commons)

Ho Bee Land, a leading developer of luxury homes in Sentosa Cove, revealed on Thursday (25 Feb) that the group has suffered an impairment loss of $34.7 million due to its 35 percent interest in the Cape Royale development in Sentosa.

The Singapore-listed firm also reported a 23 percent slump in full-year net profit to $242.2 million from 2014.

In a statement, Ho Bee attributed the profit fall to a lower gain in fair value investment properties which amounted to $186.4 million, down from $281.7 million in the year before.

However, group turnover for 2015 rose 30 percent to $129.9 million, due to stronger recurring income from its portfolio of commercial properties in Singapore and London. This includes The Metropolis in the one-north precinct in Singapore and six developments in London.

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Meanwhile, earnings per share for the year was 36.3 cents, as compared to 47.2 cents previously.

Operating conditions in 2015 have been very challenging. Despite this, our robust business model built over the last few years with a strong recurring income stream has enabled us to deliver a set of sound financial results, said Chairman and Group CEO Chua Thian Poh.

To reward shareholders, we will be proposing a special dividend of two cents per share, in addition to a first and final dividend of five cents per share.

The group foresees a more challenging year ahead. However, with The Metropolis at full occupancy and the rental income from the six commercial properties in London, the group will have substantial recurring income to face the headwinds. Moreover in FY2016, we expect profit contribution from the completion of development projects in Australia and China, he added.

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg

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