Published August 13, 2009

Wheelock Q2 profit up 89% despite slip in turnover

By AMIT ROY CHOUDHURY

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WHEELOCK Properties (Singapore) recorded a 89 per cent increase in net profit even though turnover slipped 11 per cent in its second quarter ended June 30.

Net profit surged to $29 million from $15.3 million a year back. Turnover was $78 million versus $87.8 million previously.

For the six months to June 30, net profit was up 20.5 per cent to $39 million from $32 million a year earlier. Revenue was up 7.1 per cent to $163.5 million from $152.6 million.

The group has not declared a dividend for the quarter or six months.

Wheelock said that Q2 income fell as no further revenue was recognised from The Cosmopolitan and The Sea View which were completed in Q2 and Q3 2008 respectively.

The increase in income for the first six months was due mainly to higher revenue recognised from Ardmore II based on the progress of construction work, and revenue recognised from Scotts Square, which started in Q3 2008.

Gross profit margins for Q2 and H1 were 47 and 45 per cent respectively, compared with 38 and 36 per cent a year earlier.

The increase was mainly due to a higher profit margin for Scotts Square, where profit recognition started in Q3 2008.

The Wheelock Group recorded higher other income in Q2 and H1, mainly due to a fair-value gain on its investment property Wheelock Place.

A fall in other operating expenses for Q2 and H1 was mainly due to the absence of an impairment loss in Q2 and a lower impairment loss for H1 on equity investments.

During the current financial year, Wheelock will continue to recognise profits from Ardmore II and Scotts Square, based on the progress of construction.

Progress billings for Ardmore II and Scotts Square are ongoing. Meanwhile, The Cosmopolitan, which was completed last year, has received Subsidiary Strata Certificates of Title. The balance of 7 per cent of sales proceeds will be collected in H2.

The group expects Wheelock Place to generate good recurring income due to higher committed renewals and new leases.