Wheelock Properties' revenues slump 62% to $67.6m

Within expectations. Wheelock Properties’ 2Q11 results were in line with estimates. Revenue fell 62% y-o-y to $67.6m and net profit declined 56% to $37m. While Scotts Square continued to see increasing take up rate to 73% with another 6 units sold in 2Q, sales at Orchard View was flat at 40%. This could only partially offset the absence of contributions from Ardmore II.

Meanwhile, leasing income from Wheelock Place remained stable with occupancy at 99% and average rents of S$12psf/mth. In 1H11, the group took a further S$61m writedown in the value of its investment holdings in Hotel Properties and SC Global vs Dec 2010 levels.

Going forward, the group would continue to recognize profits from 2 ongoing developments - Scotts Square and Orchard View - as well as target to complete the showflat for Ardmore III by 4Q11. We expect development margins for the latter to be strong when sold as land cost was secured at a low S$1196psf ppr.

In terms of its development project in Fuyang City China, the group is expected to receive handover of the sites in Feb 2012 and to commence construction in 2H2012. The total site area comprises 3.2msf with potential GFA of 3.9msf and can house 588 townhouses and 1260 apartments. With this purchase, the group’s gross cash hoard now stands at S$610.7m (c51Scts/share).