GuocoLand reports 1HFY2023 earnings of $59 million

GuocoLand has recorded a 46% year-on-year increase in revenue for the first half of FY2023 ending December 2022, thanks to higher contributions from its development, investment and hotel businesses. Earnings for the same period, however, decreased by 12% year-on-year to $59 million. GuocoLand has stated that without the one-off disposal gain of $14.3 million reported in the preceding period’s first half of FY2022, their earnings would have still witnessed an increase of 11%.

The company is striving to increase the proportion of its earnings from investment income, which is more imbedded in nature. Development currently remains the key driver of earnings, contributing 83%, or $550.4 million of GuocoLand’s total revenue for 1HFY203. Of the various residential projects they have launched, Wallich Residence, a luxury development, has sold 96% of its 181 units, while Meyer Mansion, a freehold development due for completion in 2024 with 200 units, is 96% sold. Midtown Modern and Midtown Bay, both luxury developments have achieved a sell-through rate of 85% and 44%, respectively. Additionally,The Avenir, a joint venture development, has been 90% sold out, with 376 total units.

With their robust development pipeline, the company has managed to sell 521 units of their 605 total unit project called Lentor Modern. Having launched in September, the Lentor Hills Residences, with a total of 598 units is slated for launch in the first half of the year in a joint venture with Hong Leong Holdings, GuocoLand and TID.

GuocoLand has also recorded higher contributions from its investment business. Contributing 11% of the total revenue, or $74.8 million and 35% of the gross profits, higher rental revenues have been garnered from both Guoco Tower and the Guoco Changfeng City South Tower in Shanghai. Additionally, the development of Guoco Midtown, an integrated mixed-use development in Singapore’s Central Business District is expected to be fully operational by 2023, with 709,000 sq ft of office space. As at Dec 31, the occupancy rates (including pre-committed leases) for Guoco Tower’s offices and retail units were close to 100% and 20 Collyer Quay was 95% occupied. Further, the Guoco Changfeng City’s South Tower has reported a 91% take-up rate for its office while the retail component is already fully leased.

GuocoLand has Senja Close EC also highlighted higher revenue from their hotel segment. The Sofitel Singapore City Centre hotel reported a three-fold increase in revenue to $35.3 million. Cheng Hsing Yao, CEO of GuocoLand, noted that their success in the face of the various challenges thrown at them reflect the company’s ability to build itself as a multi-platform real estate player. He also expects that China’s easing of pandemic control policies and the support measures introduced by the government will likely lead to improvements in business confidence and the real estate sector going forward.