GuocoLand reports 60% rise in revenue for FY2023, but 44% fall in net profit

According to its FY2023 results, GuocoLand reported a 60% year-on-year increase in revenue of $1.54 billion for the 12 months to June 30. The Group’s revenue for 2H2023 increased by 72% to $882.9 million. However, net profit fell by 44% year-on-year to $268.8 million, due to a 59% year-on-year increase in interest cost to $149.7 million and an impairment charge of $46.9 million in 2HFY2023, resulting in a decline of 55% to $187.4 million.

The Group recognised an impairment loss of $44.0 million on its investment in EcoWorld International in 2H2023 because of adverse conditions in the UK, causing other expenses to increase to $46.2 million and $46.9 million respectively in 2H2023 and FY2023.

Revenue from the sale of development properties grew 78% to $753.0 million in 2HFY2023 and increased by 62% to $1.30 billion for FY2023. This was mainly due to progressive recognition of sales for projects including Meyer Mansion, Midtown Modern and Lentor Modern, as well as contributions from Chongqing GuocoLand 18T, which started handing over sold units to buyers during the period.

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Investment property revenue recorded a 43% year-on-year growth to $94.8 million in 2H2023 and a 35% rise to $169.6 million in FY2023. This was mainly driven by higher recurring rental income from Guoco Tower, Shanghai’s Guoco Changfeng City South Tower and the initial contribution from Guoco Midtown Office, which started operations in 2HFY2023.

Hotel investments registered a 47% y-o-y growth to $33.4 million in 2H2023 and doubled to $68.7 million in FY2023. Gross profit for FY2023 rose by 5% y-o-y, though it dipped marginally in 2HFY2023. This was due to the absence of a one-off $79.3 million fair value gain recognised under cost of sales during 2H2022. Excluding this gain, 2HFY2023’s gross profit would have grown by 50%, and 34% on a year-on-year basis for FY2023.

The Group also recorded fair value gains of $156.3 million from its integrated developments Guoco Tower and Guoco Midtown during the year. In line with this, the board announced a final dividend of 6 cents per share.