Nanjing, where there has been steady demand from a growing pool of aspiring home-owners

GuocoLand Q3 earnings fall 41% to $34.4m

GUOCOLAND'S net profit fell 41 per cent year on year to $34.4 million for its third quarter ended March 2007.

The company said yesterday that revenue rose 99 per cent to $153.7 million, but the cost of sales from development projects in Singapore and China increased 61 per cent to $97.5 million.

Gross profit increased from $16.5 million to $56.1 million, mainly attributable to profit recognised from the sale of units in Beijing West End Point, launched in July 2006, and a higher write-back of provisions for development projects in Singapore.

Other operating income swung to a loss of $5.6 million from a profit of $53.7 million, due to one-off items.

Finance cost increased 26 per cent to $7.1 million due to higher interest rates and an increase in bank borrowings to finance land acquisitions.

For the nine months ended March 2007, the group reported a net profit of $87.1 million, a 14 per cent drop from the previous period.

GuocoLand said it expects to report satisfactory results for the next quarter and the financial year ending June 2007.

Noting the increase in Singapore property prices, especially in the prime districts, the current positive economic outlook for and strong demand from local and foreign home-buyers, the group said it is preparing to launch its prime freehold condominium in the Newton/Scotts area in the next 12 months.

It will also continue to pursue opportunities to replenish its land bank.

In China, it expects to launch Ascot Park, a 1,112-unit condominium, in the second quarter of calendar year 2007.

'This will be the group's maiden project in Nanjing, where there has been steady demand from a growing pool of aspiring home-owners,' it said, noting that it has established operations in the major cities of Beijing, Shanghai, Nanjing and Tianjin.

In line with the positive economic outlook and the recent abolition of property gains tax in Malaysia, GuocoLand said demand for quality residential housing there is sustainable in the short and medium term.