Ho Bee Land reports 2Q19 net profit dropped 81 percent

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Ho Bee Land reported Tuesday its second quarter net profit dropped 80.5 percent on-year to S$14.0 million on losses from associates and a year-ago fair value gain.

Revenue for the quarter ended 30 June rose 21.2 percent on-year to S$52.58 million, the developer said in a filing to SGX.

The share of losses from associates was S$4.72 million for the quarter, swinging from a year-ago share of profit of S$25.73 million, mainly due to the accrual of land appreciation tax of S$20.5 million, Ho Bee Land said.

In the year-earlier period, Ho Bee posted a fair value gain of S$28.3 million on a leasehold interest in a petrol station site on Bukit Timah Road in Singapore.

Revenue from the sale of development properties dropped 81.3 percent in the quarter to S$644,000, Ho Bee said.

Rental income increased 30 percent on-year to S$51.94 million on a full-quarter contribution from the Ropemaker Place property in London, which was acquired in June 2018, the filing said. Rental income also got a boost from positive rental reversions at The Metropolis in Singapore and other London properties, the filing said.

For the first half, Ho Bee Land reported net profit fell 65.8 percent on-year to S$41.54 million on revenue of S$105.0 million, up 14.1 percent on-year.

Ho Bee issued a cautious outlook: “With the ongoing geopolitical tensions, trade conflicts and Brexit uncertainty, the outlook for global economic growth is bleak.”

However, Chua Thian Poh, chairman and CEO, said in the statement, “Our portfolio of investment properties will help us weather the challenging times ahead and underpin the group’s profitability.”

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