Hiap Hoe profits up 319.5% on increased projects

Hiap Hoe Limited has reported a a record net profit of $34.3 million for the financial year ended 31 December 2009 (FY09).

This represents a growth of 319.5% for the niche property developer's profits, from $8.2-million in 2008.

Propelling to record territory, revenue surged 271.6% to $110.5 million, from $29.7 million recorded in FY08.

For the three months ended 31 December 2009 (4Q09), net profit soared to $9.0 million, from $0.3 million achieved in the corresponding period a year ago (4Q08).

The boost in 4Q09 profit came on the back of a robust 162.4% growth in revenue to $26.4 million, compared to $10.1 million in 4Q08.

Mr Teo Ho Beng, Managing Director of Hiap Hoe Limited said, "We have made significant progress in the construction of several of our residential projects, and that has enabled us to recognize revenue from these developments at various construction milestones."

The strong growth in revenue for the company was mainly driven by progressive revenue recognition from the development of the Group’s fully-sold residential projects, Cuscaden Royale and Oxford Suites.

To date, about 90% of revenue from each of these developments has been recognized.

Riding on buoyant property sentiment, the Group launched two residential projects, The Beverly, and Signature at Lewis in the middle of 2009.

Of these, more than 70% of each development has been sold, and about 9% of revenue from Signature at Lewis has been recognized with the commencement of its construction.

In addition, the group also managed to sell some units at its soon-to-be-launched Skyline 3600, and has recognized about 2% of revenue from this development.

The company ended the year with total shareholder’s equity standing at $174.8 million, an increase of 23.6% over the previous financial year.

Net asset value per share increased 23.6% to 46.21 cents, from 37.38 cents the year before. At the close of FY09, cash and cash equivalents stood at $3.5 million.

For the financial year 2009, the Board of Directors has proposed a first and final cash dividend of 0.25 cent per ordinary share.

On the back of strong results, and subject to the approval of the Singapore Exchange, the company is also proposing a bonus issue of one bonus share for every four existing ordinary shares.

The group, however, remains cautious about its outlook for 2010.

Construction of The Beverly is expected to commence during the year and revenue contribution from this development will follow suit.

Along with this, Hiap Hoe is poised to enjoy an upside in revenue contribution from the sale of the remaining units in this development and Signature at Lewis.

The company is also looking to launch two other projects, Skyline 3600 and Waterscape at Cavenagh in the course of this year, following the positive response from their respective soft launches.