Heeton Holdings first-quarter turnover soars but profit plummets

Niche property developer is optimistic though.

Heeton Holdings has posted a 52.8% increase in turnover to $12.8 million for the three months ended 31 March 2013 (1Q2013), from $8.4 million in the corresponding period a year ago (1Q2012). Profit attributable to shareholders was $2.7 million, versus $3.2 million in 1Q2012.

The turnover gain was largely driven by an increase in revenue recognition from Lincoln Suites in 1Q2013, which was higher than revenue recognised from The Lumos in 1Q2012. Lincoln Suites and The Lumos were the only residential projects with revenue recognition in their respective quarters. However, higher development costs in relation to Lincoln Suites outweighed the turnover gain, and thus impacted overall margins for the quarter.

Taking into consideration a share of profits from associated companies recorded on the back of progress made in the construction of its joint-venture project, The Boutiq, the Group registered profit before tax from operations of $3.1 million, compared to $3.9 million in 1Q2012.

The Group believes that the slowdown in residential property transactions, following the introduction of drastic anti-speculation measures in January 2013, will likely continue in the months ahead as buyers maintain a cautious approach towards property purchases. Nevertheless, on the back of projects sold to date, Heeton expects to continue to turn in a positive performance for the financial year 2013.

Of the 130 units at The Boutiq, the Group has sold over 80% to date. Its two other jointventure projects, the 36%-owned Palacio and 40%-owned Sky Green, are on track to commence construction in the second quarter and middle of 2013 respectively. The two developments have attracted good response since their respective launches in August and October of last year. About 90% of the 21-unit Palacio and 95% of the 176-unit Sky Green have been sold to date.

Meanwhile, the Group’s portfolio of investment properties should continue to provide the Group with stable recurring income.