Wing Tai posts 7% climb in Q2 net profit

WING Tai Holdings yesterday reported a 7 per cent climb in fiscal second quarter net profit to $22.3 million from $20.9 million a year earlier as it sold more homes.

The rise in earnings for the three months ended Dec 31, 2009, came on the back of a 93 per cent surge in revenue to $177.1 million from $92 million a year ago. Q2 earnings per share climbed to 2.87 cents in Q2 from 2.67 cents the previous year. Net gearing stood at 0.5 times as at Dec 31, 2009.

Wing Tai in 2009 capitalised on the improved property market sentiments and marketed three new residential projects – Belle Vue Residences, Ascentia Sky by Tanglin and The Floridian – which were well received by home buyers.

For the half year ended Dec 31, 2009, the group’s net profit rose by 28 per cent from $53.5 million to $68.7 million. Revenue doubled from $226.3 million to $454.3 million.

This increase was mainly due to the higher contributions from the development properties division as more units were sold over the six months, including units sold in Belle Vue Residences and the progressive sales recognised from The Riverine by the Park in Singapore, Wing Tai said.

Profits recognised from those projects also contributed to the increase in the group’s operating profit from $56.6 million to $126.0 million for the first half of its financial year – an increase of 123 per cent.

Looking ahead, Wing Tai said that it will focus on marketing new residential projects and releasing more units for sale in 2010.

The group cited the growth forecast of the Singapore economy and its expected positive impact on the property market as the reasons behind its strategy.

Analysts remain upbeat about the high-end residential market in 2010.

‘With the additional supply being part of the government’s strategy to keep upgrader housing affordable, we expect that this will provide some price resistance for the mass-market this year,’ said DBS Group analyst Adrian Chua in a note yesterday. ‘We continue to favour the high-end segment and developers that are more exposed to this segment.’

Wing Tai shares shed four cents to close at $1.76 yesterday amid a weak market.

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