Property developer GuocoLand Limited saw its net profit increase by more than two-fold for its third quarter ended 31 March 2017 to S$29.6 million.
Revenue rose 63 percent to S$271.1 million, while gross profit jumped 28 percent to S$63.2 million.
The group attributed the increase to higher sales and progressive revenue recognition from its residential projects in Singapore.
GuocoLand’s other income increased by S$4.3 million while its other expenses fell by S$9.5 milliion, mainly due to foreign exchange movements as well as fair value changes on foreign exchange hedges.
For the first nine months of the year, the group posted a revenue of S$705.8 million, down 16 percent from last year’s S$845.3 million.
“The decrease was mainly due to lower revenue from Malaysia’s residential projects and the absence of contribution from the sale of an office block in Shanghai Guoson Centre in the previous corresponding period,” said the group.
The lower revenue from China and Malaysia, however, was partially offset by Singapore’s higher revenue.
Gross profit dropped 40 percent to S$153.2 million due the drop “in revenue and lower gross margin arising from the different sales mix in the two periods of review”. Other income also plunged 91 percent to S$53.5 million during the period.
With this, net profit fell 80 percent to S$112.3 million.
Looking ahead, Guocoland revealed that it will continue to focus on sales and leasing of its current projects in Malaysia amid the challenging operating conditions.
“Nonetheless, the group sees opportunities in the soft property market and has completed the acquisitions of two land parcels in Batu 9, Cheras during the quarter.”
It noted that office and retail rents in Singapore have been on the downtrend, with property consultants expecting further pressure on rents with a rise in office vacancy this year.
“Nevertheless, Tanjong Pagar Centre’s office and retail components have achieved healthy commitment levels of approximately 90 percent,” it said.
This article was edited by Denise Djong.