Japan Land issues profit warning

Mainboard-listed property investment firm Japan Land has issued a profit warning, saying that it expects to post a financial loss for the nine months ended February 28.

The company is set to announce its third-quarter unaudited financial results on April 14.

Japan Land said that the losses stem from the company not registering project arrangement fees and project management fees for the current financial year since completion of its data centre in Fuchu, Japan in the previous financial period.

In its announcement, the firm said it has also incurred higher expenses as it develops new projects and restructures its business activities.

Japan Land added that it expects to post full-year losses for its financial year ending May 31, arising mainly from losses in its underlying business operations.

The company has requested for a trading halt in the Singapore Exchange since Tuesday pending the result of its negotiations with the main contractor of its data centre.

The company may face possible financial difficulties arising from woes over a failed deal on partial disposal of its Jurong Data Centre, which may lead to insolvency.

ConnectedPlanet Holding was supposed to acquire a stake in the data centre, but it failed to fulfil its obligations, thus leaving Japan Land unlikely to use the proceeds to pay its debts of about
S$44.4 million as at November last year.

The company is still in negotiations with its main contractor M+W Singapore Pte Ltd, and Japan Land said it will issue subsequent announcements to keep shareholders informed about further developments.

Source : Channel NewsAsia – 31 Mar 2010

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