Hiap Hoe’s 3Q net surges to $8.5m

Niche property developer Hiap Hoe Limited has reported that its net earnings for the third quarter ended 30 September 2009 (3Q09) surged more than 13 times to $8.5 million or 2.24 cents per share, from $0.7 million or 0.20 cents per share reported in the corresponding period a year ago (3Q08).

The rise in net profit was achieved on revenue of $36.7 million, which represents a growth of 663.0%, and has surpassed its revenue of $29.7 million for the full year of 2008.

For the nine months ended 30 September 2009 (9M09), the group recorded a net profit of $25.3 million on revenue of $84.0 million, compared to a net profit of $7.9 million on revenue of $20.3 million a year ago (9M08).

The strong growth for the quarter was driven by progressive revenue recognition on four of its residential development projects — Cuscaden Royale, Oxford Suites, Signature at Lewis, and Skyline 360° at St Thomas Walk. As at 30 September 2009, 74% of revenue for Cuscaden Royale and 80% of revenue for Oxford Suites have been recognised, while 13% and 9% of revenue for Signature at Lewis and Skyline 360° have been recognised respectively.

Net asset value per share as at 30 September 2009 was 41.58 cents up 11%, from 37.38 cents as at 31 December 2008. At the close of the quarter, cash and cash equivalents stood at $2.6 million.

Hiap Hoe also launched The Beverly and Signature at Lewis in the early part of 2009, and has sold more than 60% of the units launched. In addition, the group also managed to sell a couple of units at Skyline 360°, even though it has not officially launched the project.

Along with recent improving economic indicators, buying interest in the local private residential property market has showed some signs of growth. However, the group remains cautious about its outlook.

Hiap Hoe intends to continue to monitor the market closely for an opportune time to launch its other projects, namely, Waterscape at Cavenagh, Skyline 360° and Treasure at Balmoral. Together, the three projects have a collective gross floor area of more than 400,000 sq ft.

Hiap Hoe says plans to develop its Balestier Road / Ah Hood Road land parcel into an integrated hotel, park and commercial development are also progressing well. The group is currently in the final stages of selecting an international group to manage the two hotels in the development and the project is scheduled for completion in 2014.

Source : The Edge – 6 Nov 2009

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