Keppel Land's 29% profit surge in 3Q not surprising

Results are within expectations, notes OCBC.

Keppel Land (KPLD) announced 3Q12 PATMI of S$74.5m, which was up 29% YoY mostly due to an increased contribution from Keppel REIT and a S$16.7m gain from a stake divestment in Saigon Centre Ph 2, said OCBC in a report.

"This was mostly in line with our expectations, with 9MFY12 PATMI (S$311.1m) now constituting 83% of our annual forecast. 3Q12 revenue came in at S$166.4m, up 49% YoY mainly due to higher revenue recognition from the Luxurie and Lakefront Residences," it said.

Here's more from OCBC:

KPLD sold ~120 Singapore homes in 3Q12 – keeping with the ~100 unit/quarter pace seen over 1H12 previously. Earlier this week, KPLD also put in a top bid of S$434.6m for a GLS site at New Upper Changi
Road.

The 99-year lease-hold site has an area of 343k sq ft with a maximum GFA of 549k sq ft, and we estimate breakeven and selling ASPs of around S$1,200 and S$1,300, respectively. For the commercial segment, management updates that MBFC T3 is now 76% committed, with 60% of the building now occupied.

After a mild pickup in Chinese sales last quarter (491 units sold in 2Q12 versus 187 1Q12), the pace of sales settled back in 3Q12 with ~290 units sold, mainly from the Springdale, Central Park City and The Botanica. KPLD also recently acquired its fifth residential site in Chengdu, China for RMB 680.4m (S$132m). This site, located in Xinjin County in Sichuan province, has an area of 28.7 hectares and is ~20km away from the city center.