TEE Land 2Q earnings falls 54% to S$0.7 mil

SINGAPORE (Jan 11): TEE Land posted earnings of S$690,000 (RM2.15 million) in 2Q2017, falling 54.1% from earnings of S$1.5 million a year ago.

This is despite a 144.1% increase in revenue to S$24.0 million in the second quarter ended Nov 30, compared to revenue of S$9.8 million in 2Q2016.

The higher revenue was mainly attributed to higher progressive revenue recognised for development projects, particularly Third Avenue in Malaysia and TEE Land’s new project, Hilbre 28.

However, cost of sales in 2Q outpaced revenue growth, surging 182.2% to S$17.4 million from S$6.2 million in the same period a year ago.

Gross margin fell to 27.5% in 2Q2017 from 37.3% a year ago, mainly due to higher revenue contribution from development projects which have lower gross margin.

TEE Land’s share of results of associates for 2Q2017 was a loss of S$0.7 million, compared to a profit of S$2.4 million 2Q16.

This was due mainly to the completion of a number of development projects and full recognition of revenue in FY2016.

In addition, TEE Land’s associates had sold three units in the Boutiq project below cost and incurred losses by Chewathai in Thailand during the quarter.

In a filing to SGX on Wednesday, TEE Land says Thailand’s property market was affected by the passing of the former king in Oct 2016.

Cash and cash equivalents stood at S$26.4 million as at Nov 30, 2016.

TEE Land has declared an interim cash dividend of 0.15 Singapore cent per ordinary share for the period. This is lower than the interim cash dividend of 0.22 Singapore cent per ordinary share in the corresponding period last year.

Looking ahead, TEE Land says “the property market conditions in Singapore and Malaysia to remain generally unchanged, as cooling measures in both countries are not expected to be eased anytime soon”.

The group expects to see sustained demand for workers’ accommodation in New Zealand as the rebuilding of Christchurch “will carry on for many more years”.

Shares of TEE Land last closed at 20.5 Singapore cents on Dec 29, 2016. — theedgemarkets.com.sg