GuocoLand reported a 60% y-o-y rise in revenue of $1.54 billion for FY2023, for the 12 months to June 30. For 2HFY2023, revenue for the Group increased by 72% to $882.9 million.
However, an impairment charge of $46.9 million and a 59% y-o-y rise in interest cost to $149.7 million caused net profit to fall by 44% y-o-y to $268.8 million. In 2HFY2023, net profit fell by 55% to $187.4 million.
The property group recognised an impairment loss of $44.0 million on its investment in EcoWorld International in 2H2023 because of adverse conditions in the UK. As a result of this, the Group’s other expenses for 2H2023 and FY2023 increased to $46.2 million and $46.9 million respectively.
Revenue from the sale of development properties grew by 78% to $753.0 million in 2HFY2023 and increased by 62% to $1.30 billion in FY2023. The higher property development revenue for both 2H 2023 and FY2023 was mainly from higher progressive recognition of sales for Meyer Mansion, Midtown Modern and Lentor Modern, all of which have been substantially sold.
In addition, Chongqing GuocoLand 18T also contributed to the Group’s revenue in 2HFY2023, as one of its residential towers has started to hand over sold units to buyers during the period.
Revenue from investment properties increased 43% y-o-y to $94.8 million in 2H2023 and grew 35% y-o-y to $169.6 million in FY2023. The growth was supported by higher recurring rental income from Guoco Tower, Shanghai’s Guoco Changfeng City South Tower and the initial contribution from Guoco Midtown Office, which commenced operations in 2HFY2023.
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Revenue from the hotel investments increased by 47% y-o-y to $33.4 million in 2H2023 and doubled to $68.7 million in FY2023. Year-on-year, gross profit for FY2023 increased by 5% but reduced marginally for 2HFY2023. The lower growth in gross profit for FY2023 and 2H2023 vis-à-vis revenue growth, was due to the absence of a one-off $79.3 million fair value gain recognised under cost of sales during 2H2022. Excluding this fair value gain, the group’s gross profit for 2HFY2023 would have grown 50% y-o-y and by 34% y-o-y in FY2023.
For FY2023, the company recorded fair value gains of $156.3 million, mainly from its integrated developments Guoco Tower and Guoco Midtown.
Cheng Hsing Yao, GuocoLand's group CEO says that for more than a decade, the company has consistently implemented the strategy to build a twin-engine real estate company.
"The twin engines of property investment and property development will continue to underpin the group’s profits and future growth.
"GuocoLand is now a highly regarded brand in premium residential developments as well as integrated mixed developments anchored by 5 premium Grade A offices. Our projects have also been known to uplift and transform the neighbourhoods they are in," he adds.
GuocoLand's board announced a final dividend of 6 cents per share. NAV of $3.85 as at June 30 is down marginally y-o-y.
GuocoLand shares closed Aug 29 at $1.50.
