Published February 7, 2009

Wing Tai changes tack as earnings fall It will defer building housing projects where construction contracts haven't been awarded By KALPANA RASHIWALA Email this article Print article Feedback PROPERTY group Wing Tai will defer construction of housing projects where construction contracts have not been awarded. EARNINGS CONTRIBUTORS Units sold in Wing Tai's Belle Vue Residences (above), Helios Residences and Riverine by the Park in Singapore, and Sering Ukay in Malaysia contributed to revenue and earnings for Q2 and H1 ended Dec 31 It did not name the projects in its second-quarter results statement yesterday but BT understands that they include proposed developments on the Ardmore Point and Anderson 18 sites. The old Ardmore Point has been pulled down, leaving a vacant site, while the existing Anderson 18's units are largely vacant. Market watchers reckon that Wing Tai and its joint venture partner for Anderson 18, City Developments, will probably consider the option of renting out the existing units to tide over the current weak property market until they decide to redevelop the site. Wing Tai said: 'Property market conditions in 2009 are expected to remain challenging.' The group posted a 52 per cent year-on-year drop in net earnings for the second quarter ended Dec 31, 2008 to $20.9 million. For the six months ended Dec 31, 2008, net earnings fell 49 per cent to $53.5 million. The weaker first-half bottom line was due to a $50 million or 66 per cent fall in the group's share of profits of associated and joint venture companies as well as the absence of a $27.5 million one-off gain from disposal of an available-for-sale financial asset in Q2 of the preceding financial year. Excluding the $27.5 million one-off gain, the group's operating profit in the latest first-half period ended Dec 31, 2008 increased by 34 per cent from $42.6 million to $57.2 million; the boost was due chiefly to higher profit recognition from development properties. Units sold in Wing Tai's Helios Residences condo in Cairnhill, Riverine by the Park in Kallang and Belle Vue Residences at Oxley Walk in Singapore and Sering Ukay in Malaysia contributed to revenue and earnings for Q2 and H1 ended Dec 31, 2008. Wing Tai said that the decline in share of profits of associated and joint venture companies was due to lower contribution from VisionCrest on the sale of residential units. Q2 group revenue slid 17 per cent to $91.98 million, but the first-half revenue rose 7 per cent to $226.3 million. Wing Tai's net gearing ratio stood at 0.47 time as at Dec 31, 2008, up from 0.4 time as at June 30, 2008. The group's total borrowings and debt securities stood at $1.15 billion as at Dec 31, 2008, up from $1.09 billion as at June 30, 2008. No dividend has been declared. Net asset value per share excluding treasury rose one cent to $2.04 as at end-December 2008 from six months earlier. Yesterday, the counter ended three cents higher at 71 cents. The stock has lost about 67 per cent of its value from the $2.19 peak on Feb 27 last year.