Guocoland net profit skyrockets by 1938% to $550.5m

Thanks to the sale of its Beijing DZM project.

The property firm broke the stratosphere with a huge surge in its profit yoy, thanks to a $480m net gain from the sale of its 90% stake in the Beijing Dongzhimen project.

According to a report from CIMB, its topline almost doubled to $439.8m due to better sales at the Leedon Residence in Singapore and the divestment of its GFA office tower at Shanghai Guoson Centre, which generated a $58m profit.

“Within the Singapore residential operations, the 381-unit Leedon Residence saw an additional 31 units taken up in 1QFY16, bringing the sales rate for the entire project to c.53%. The 1,024-unit Sims Urban Oasis also saw another 25 units change hands, bringing the take-up rate to c.30%,” CIMB said.

Meanwhile, following the divestment of Beijing DZM, Guocoland’s balance sheet toughened up significantly, CIMB said.

“Net gearing declined to 0.64x as at end-1QFY16. It has a gross cash balance of S$2bn, putting the company in a strong position to redeploy its capital into RNAV-enhancing new developments,” they added.

On the other hand, Guocoland’s profit over the next few quarters is likely to be underpinned by its subsidiary Guocoland Malaysia’s sale of an office tower in Kuala Lumpur for RM189m.

“Apart from ongoing projects, the progressive development of mixed Tanjong Pagar Centre (TPC) is also on track. It recently signed a multi-year contract with Virgin Active for a 31,000sq ft state-of-the-art fitness space,” CIMB said.