GuocoLand reports 1HFY2023 earnings of $59 million

GuocoLand reported a 46% y-o-y increase in revenue to $605.3 million for 1HFY2023 ended Dec 2022, driven by higher contributions from its development, investment and hotel businesses.

Earnings for the same period was down 12% y-o-y to $59 million. If the one-off disposal gain of $14.3 million booked in preceding period’s 1HFY2022 was excluded, GuocoLand would have reported an earnings increase of 11%.

Development remained the key earnings driver, contributing 83%, or $550.4 million of GuocoLand’s total revenue for 1HFY203. Notably, its ultra-luxury development Wallich Residence has sold 96% of its 181 units, whilst Meyer Mansion, a freehold luxury development that will be completed Tengah EC in 2024, is 96% sold with 200 units. Midtown Modern and Midtown Bay, two luxury developments with 558 and 219 units respectively, are 85% and 44% sold.

In addition, the company is trying to generate a bigger proportion of its earnings from investment income that’s more recurring in nature. It reported higher contributions from this segment of 11%, or $74.8 million, thanks to higher rental collected from Guoco Tower and the Guoco Changfeng City South Tower in Shanghai. Meanwhile, the joint venture development The Avenir is 90% sold with 376 units.

The company has a robust development pipeline of projects as well. Lentor Modern, launched in September, has sold 521 units of its 605 units whilst Lentor Hills Residences, a joint venture project with Hong Leong Holdings, GuocoLand and TID, is expected to be launched within the first half of the year and comes with 598 units.

Cheng Hsing Yao, CEO of GuocoLand, states, “Global real estate industry has faced a series of challenges, from supply chain issues, labour shortage, to inflation and rising costs. Despite the multiple headwinds, GuocoLand has been able to increase our revenue and profits and deliver a robust set of results to our shareholders.” He adds, “Sales of our residential projects are going strong, while revenue from our premium Grade A offices has grown consistently over the years as we see the trend of “flight to quality” by top global and regional companies continuing to grow, even as they embrace a hybrid work environment.”

GuocoLand’s presence as a multi-platform real estate player is going to be further strengthened with the upcoming Guoco Midtown, an integrated mixed-use development in Singapore’s Central Business District with 709,000 sq ft of office space, expected to be fully operational in 2023.

Guoco Tower, which is sited right on top of the Tanjong Pagar MRT station, enjoyed positive rental reversions with an occupancy rate, including pre-committed leases, of close to 100%.Other investment properties generating recurring income include 20 Collyer Quay, which is 95% occupied as at Dec 31 2022, and the Guoco Changfeng City’s South Tower, with a 91% take-up rate for its office and a fully leased retail component.

GuocoLand has also reported higher revenue from its hotel business segment, with revenue up three-fold to $35.3 million. Looking ahead, the company is optimistic about the real estate industry in China, where pandemic control policies have been eased and supported by the government will likely see improvements in business confidence and the sector.

The company is committed to building its presence as a multi-platform real estate player, and delivering a robust set of results to its shareholders in spite of various challenges.