GuocoLand reports 1HFY2023 earnings of $59 million

GuocoLand has reported an impressive increase of 46% in its y-o-y revenue for the 1HFY2023 ended on Dec 2022. This was largely thanks to contributions from its development, investment and hotel businesses.

Earnings for the same period dropped by 12%, amounting to a total of $59 million. Excluding the one-off disposal gain of $14.3 million recorded in the previous 1HFY2022, its earnings would have actually increased by 11%.

The company is determined to diversify its Champions Way Condo income sources and generate a larger portion from investment earnings, which is more recurring in nature. For now however, development still stands as the key money-earner, accounting for 83% of their total revenue, or $550.4 million.

In terms of numbers, their ultra-luxury development Wallich Residence has thus far sold 96% of its 181 units. Another freehold luxury development, Meyer Mansion, is 96% sold with a total of 200 units, while Midtown Modern and Midtown Bay, 558-units and 219-units respectively, are 85% and 44% sold.

The company also has The Avenir, a 376-unit joint venture project with Hong Leong Holdings, GuocoLand and Hong Realty (Private). 90% of its units are sold. Their newest launch – Lentor Modern – has sold 521 of the 605 units to date. This will be followed by Lentor Hills Residences, another joint venture with Hong Leong Holdings, GuocoLand and TID, which is expected to be launched within 1HFY2024, featuring a total of 598 units.

Their investment business has also contributed 11%, or $74.8 million, to their total revenue during the period, and 35% of the gross profits. This was largely attributed to higher rental collected from Guoco Tower’s offices and retail units, and the Guoco Changfeng City South Tower in Shanghai.

GuocoLand CEO, Cheng Hsing Yao, states that despite “multiple headwinds” such as supply chain issues, labour shortage, inflation and rising costs, the company was able to deliver a “robust set of results to their shareholders”. The global trend of “flight to quality” by top companies has also helped grow revenue from its Grade A office properties, while their hotel segment, the Sofitel Singapore City Centre, also saw improved revenue, up threefold to $35.3 million.

Cheng assures that GuocoLand will continue to strengthen its position as a multi-platform real estate player, with their integrated mixed-use development Guoco Midtown – boasting 709,000 sq ft of office space – expected to be fully operational in 2023.

China’s easing of pandemic control policies and various support measures from the government is expected to bring improvements in business confidence and real estate in general, and GuocoLand is now better-positioned to reap such benefits.