Keppel Land's profits dropped 9.2% to $87.7m

Blame it on weaker property development segment.

According to OCBC Investment Research, Keppel Land (KPLD) reported 1Q14 PATMI of S$87.7m, decreasing 9.2%.

OCBC noted that contributions from the property development segment decreased 37.4% YoY to S$35.6m as The Botanica Ph.6 and Marina Bay Suites achieved TOP over the year; this dip was partially offset by an 8.9% increase in property investment income to S$29.3m from Keppel REIT and MBFC T3.

Here's more:

We judge this set of results to be mostly in line with expectations and YTD PATMI now constitutes 19.7% of our full year forecast. 1Q14 topline came in at S$284.9m, up 37.6% as revenues from Chinese development projects increased.

Highline Residences to launch in 2Q14 

The group sold 54 homes in Singapore over 1Q14, mostly from The Glades which is now 23% sold (~170 out of 726 units). The run rate over 1Q14 so far represents 14.5% of the 370 total units sold in FY13, in line with expectations for a fairly muted FY14 in terms of SG home sales given the weak outlook.

In 2Q14, we expect KPLD to launch its condominium project in Tiong Bahru, Highline Residences; pricing will likely be a key driver for launch performance here, in our view. In China, 570 home units were sold over the quarter, down 33% YoY versus the 850 units sold in 1Q13, though management highlights that the achieved sales value was actually 5.9% higher due to a change in mix to higher-end projects. 

KPLD also reports that sales had slowed over Jan-Feb due to the winter weather and Lunar New Year holidays, but it has since seen sales pick up in Mar-14.