Sino Land core profit falls 2.6% on dive in sales

HONG KONG: Sino Land last Thursday, Sept 2 reported a big jump in net profit, but underlying earnings fell 2.62% for the year to June due to lower property sales.

The company's underlying profit, excluding a property revaluation gain of HK$2.59 billion (RM1.04 billion), slipped to HK$3.51 billion from HK$3.6 billion the previous year. Turnover dropped 21% to HK$7.7 billion from HK$9.69 billion. Net profit, including revaluation surplus, jumped 63% to HK$6.09 billion.

Revenue from property sales plunged 49% to HK$4.57 billion from HK$6.81 billion. The fall in revenue was because the developer completed five projects with a total gross floor area of more than 2.2 million square feet, compared with nine projects with a floor area of more than 3.2 million sqft a year ago. The major contributor to the results was Lake Silver in Ma On Shan.

The developer plans to complete five projects with a total gross floor area of 1.3 million sqft for the financial year to June next year. The Hermitage, a new luxury residential project in Tai Kok Tsui, will be the key driver for the results. More than 89% of the units at the 964-flat project have been sold since it launched in the market in June.

Rental income increased 5.8% to HK$2.4 billion. The company plans to complete a total gross floor area of 2.9 million sqft of investment properties in the next few years.

Sino Land expects rental income will continue to increase as four investment properties are to be completed by the end of June next year. The company acquired three development sites and an investment property for the year. The sites could provide a total gross floor area of 1.57 million sqft.

The new acquisitions boosted its land bank to 42 million sqft. Its gearing ratio increased to 21.5% from 16.5% a year ago because of the acquisitions.

On the mainland, the company held a land bank of 25.7 million sqft.

A final dividend of 30 HK cents was proposed, the same as last year.

Meanwhile, Sino Hotels (Holdings), the hotel arm of Sino Land, reported its net profit surged 69.5% to HK$131.2 million for the year to June from HK$77.4 million.

Tsim Sha Tsui Properties' underlying profit also increased 11% to HK$1.95 billion, while net profit grew 80.7% to HK$3.29 billion.

Shares in Sino Land stayed at HK$13.58 last Thursday. — South China Morning Post