SINGAPORE (March 27): Real estate developer TEE Land has reported a 95.1% decline in 3Q17 earnings to $0.66 million from $1.34 million a year ago on higher cost of sales and lower margins.
The steep fall in earnings comes despite a 158.6% spike in revenue from $9.2 million in 3Q16 to $23.8 million, which was mainly attributable to higher progressive revenue recognised for the group’s project developments. This was particularly so for Third Avenue in Malaysia and the group’s new project, Hilbre 28, in addition to the sale of completed units of Peak I.
Cost of sales for the quarter correspondingly registered nearly three times higher at $18.2 million from just $6 million in the previous year.
The group’s gross margin decreased to 23.6% for the quarter as compared to 35.2% a year ago, due mostly to higher contribution from development projects which have lower gross margin. TEE Land also notes that it posted proportionately higher revenue contributions from hotel operations and rental income in 3Q16.
Share of results of associates for 3Q17 fell 94.9% to $139,000 from $2.7 million a year ago, as a number of development project completions and their full recognition of revenue were made during FY16.
In its financial results announcement filed to the SGX on Monday, TEE Land says it is currently exploring opportunities to realise value in its investments in the two Australian hotels. According to the group, it has received enquiries from interested parties, and will continue to engage them in discussion.
The group says it expects the property markets of Singapore and Malaysia to remain generally unchanged, while demand is expected to remain “relatively stable” in Thailand given that its developments cater mainly to Thai buyers.
It also believes that demand for workers’ accommodation in Christchurch, New Zealand, is to remain stable as the rebuilding work of Christchurch will “carry on for many more years”.
Shares of TEE Land closed flat at 18 cents on Monday.
