SINGAPORE (Aug 7): Property developer Wee Hur Holdings reported 2Q17 earnings of $3.3 million, double of the $1.6 million it posted in 2Q16 a year ago on higher other items of income, mainly due to higher translation and fair value gains.
Revenue for the quarter fell 14% to $35.4 million in 2Q17 from $40.9 million in 2Q16, mainly due to the absence of contribution from the group’s property development business from the previous year.
In line with the fall in revenue, gross profit declined 19% to $8.1 million in 2Q17 from $10 million in 2Q16.
General and administrative expenses increased by 27% to $3.9 million in 2Q17 from $3 million a year ago, mainly due to higher legal and professional fees incurred.
The weaker topline was nonetheless offset by a surge in contributions from other items of income, with the group profiting from $53,000 in other gains and losses compared to a loss of $3.9 million in 2Q16.
This was mainly due to a translation gain recognised on foreign currency- denominated loans extended to wholly-owned subsidiaries for the development costs pertaining to the properties in Australia, as well as a fair value gain of foreign currency forward contracts entered with the banks.
Over the quarter, Wee Hur also saw a 56% increase in other income to $0.5 million from $0.3 million, which resulted from higher ancillary fees collected from Wee Hur’s commercial property as well as dormitory businesses, respectively.
In its outlook, Wee Hur notes signs of recovery for the residential property sector, but expects the industrial property sector outlook to remain challenging.
The group is currently co-developing a 735-unit on a land plot at Fernvale Road, and says it will closely monitor the right timing for the residential property’s sale launch.
On the other hand, it says sales for its industrial development project, Mega@Woodlands, has been slow with 30% sold to-date.
Meanwhile, the group says it is actively seeking land parcels for purpose-built student accommodation (PBSA) in the major cities of Australia, and expects the construction of its mega PBSA in Buranda, Brisbane, to complete in 1Q18.
Shares in Wee Hur closed 2.1% higher at 24 cents on Monday.
