MCL Land Limited First Half F

RNS Number : 1337Q

Hongkong Land Hldgs Ld

29 July 2010

 



To:   Business Editor                                                                                                      29th July 2010

                                                                                                                                    For immediate release

 

MCL Land Limited

First Half 2010 Financial Statements and Dividend Announcement

The following announcement was issued today by the Company's 77%-owned subsidiary, MCL Land Limited.

For further information, please contact:

Hongkong Land Limited

John R Witt                                                                                                     (852) 2842 8101

GolinHarris

Sue So                                                                                                            (852) 2501 7984

29th July 2010

MCL LAND LIMITED

FIRST HALF 2010 FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

  -      Completion of Waterfall Gardens

  -      Reversal of US$51 million write-down on The Estuary

  -      Profit attributable to shareholders at US$163 million

  -      Development site at Hougang Avenue 2 secured

"While the outlook for the residential property market in Singapore remains generally positive, ongoing economic uncertainties and the supply of more government land may moderate demand in the short term. Following strong first half profits, the only project completing in the second half will be D'Pavilion."

Y K Pang, Chairman

29th July 2010

Group Results

				Six months ended 30th June
				2010	2009	Change	2010	Change
				US$m	US$m	%	S$m	%
Revenue				315.6	144.1	119	442.7	111
Profit before tax				184.1	44.4	315	258.5	301
Profit attributable to shareholders				162.9	38.1	328	228.8	313
				US¢	US¢		S¢
Earnings per share				44.03	10.29	328	61.85	313
				At 30.6.2010	At 31.12.2009	Change	At 30.6.2010	Change
				US$m	US$m	%	S$m	%
Shareholders' funds				664.2	533.2	25	932.1	25
				US$	US$		S$
Net asset value per share				1.80	1.44	25	2.52	25

The exchange rate of US$1=S$1.40 (31.12.2009: US$1=S$1.40) was used for translating assets and liabilities at the balance sheet date. Average monthly transaction rates were used for translating the results for the financial period (average rate for 2010: US$1=S$1.40, 2009: US$1=S$1.49).

The financial results for the six months ended 30th June 2010 and 30th June 2009 have been prepared based on International Financial Reporting Standards ("IFRS"). These have not been audited or reviewed by the Company's Auditors.

Overview

Underpinned by a better than expected economic environment in the first half of the year, the Singapore residential property market remained buoyant. For the Group, a good profit was recognised on the completion of Waterfall Gardens, while a reversal of a write-down was made in respect of The Estuary development following its successful launch in February 2010.

Group Performance

Profit attributable to shareholders for the period was US$163 million, compared with US$38 million in the first half of 2009. In addition to the profit arising from the completion of Waterfall Gardens, the results also benefited from the reversal of a US$51 million write-down on The Estuary development following the sale of all units by the end of April 2010. The Company completed two developments in the first half of 2009. 

The Group continues to carry a write-down of US$134 million against a number of its development properties in Singapore.

Shareholders' funds were US$664 million at the end of June 2010, up from US$533 million at 31st December 2009. Progress payments received in respect of development properties continued to enhance the Group's financial position. At 30th June 2010, the Group had net cash of US$279 million, compared with US$93 million at the end of 2009.

The Board is not recommending the payment of an interim dividend for the first half of 2010 (2009: nil).

Properties

Sales of the Group's Singapore development properties were robust. The Estuary, a 608-unit condominium development at Yishun Avenue 1, and The Peak@Balmeg, a 180-unit condominium development at Balmeg Road, were fully sold as at 30th June 2010. By the same date, pre-sales had reached 99% at Parvis, a 248-unit condominium joint venture development at Holland Road, and 94% at D'Pavilion, a 50-unit apartment development at Upper Serangoon Road.

D'Mira, a 65-unit apartment development at Boon Teck Road, was launched in May 2010 and 20 units had been committed for sale at the end of June.

Construction of the Group's projects is progressing well. Waterfall Gardens, a fully sold 132-unit condominium development at Farrer Road, obtained its Temporary Occupation Permit in May 2010, giving rise to a net profit of US$113 million. Completion of D'Pavilion is scheduled for the second half of 2010. This will be followed by The Peak@Balmeg in 2011, Parvis in 2012, and D'Mira and The Estuary in 2013. 

The Group's joint venture developments in Malaysia continued to show good results.  Riana Green Phase 1 was completed in January 2010, and all 391 units have now been sold. Sales of Seremban Forest Heights, a joint venture development in Seremban, continued with 322 of the 396 available units committed for sale.

Wangsa Walk Mall, a joint venture retail mall development in Kuala Lumpur with an estimated net lettable area of some 25,000 square metres, had 95% of its space leased at the end of June 2010.

Acquisitions

In May, the Group successfully secured a 99-year leasehold site at Hougang Avenue 2 for consideration of US$148 million. The 30,196-square metre site is located within an established residential estate and it will be developed into a condominium project with an estimated 450 to 500 units. The Group now has five sites in Singapore with a total gross floor area of about 100,000 square metres that are at various stages of planning approval.

Prospects

While the outlook for the residential property market in Singapore remains generally positive, ongoing economic uncertainties and the supply of more government land may moderate demand in the short term. Following strong first half profits, the only project completing in the second half will be D'Pavilion.

Y K Pang

Chairman

29th July 2010

Statement pursuant to Rule 705(5) of the Listing Manual

The directors confirm that, to the best of their knowledge, nothing has come to the attention of the Board of Directors which may render the accompanying unaudited interim financial results for the six months ended 30th June 2010 to be false or misleading in any material respect.

On behalf of the Directors

Y K Pang

Chairman

Hassan Abas

Director

29th July 2010

MCL Land Limited

Consolidated Profit and Loss Account

				Three months ended					Six months ended
				30.6.2010		30.6.2009	Change		30.6.2010			30.6.2009	Change
			Note	US$'000		US$'000	%		US$'000			US$'000	%
Revenue				315,357		135,799	132		315,585			144,103	119
Cost of sales				(176,636)		(92,362)	91		(176,721)			(97,617)	81
Gross profit				138,721		43,437	219		138,864			46,486	199
Other income			3	325		384	-15		51,675			715	n/m
Marketing expenses				(570)		(117)	387		(3,050)			(170)	n/m
Administrative expenses				(2,350)		(1,154)	104		(2,923)			(2,103)	39
Share of joint ventures' results (net of tax)				796		(167)	n/m		(509)			(576)	-12
Profit before tax			2	136,922		42,383	223		184,057			44,352	315
Tax			4	(22,661)		(5,689)	298		(21,140)			(6,270)	237
Profit after tax attributable to
	shareholders of the Company			114,261		36,694	211		162,917			38,082	328
				US¢		US¢	%		US¢			US¢	%
Earnings per share ("EPS")
	attributable to shareholders
	- basic and diluted*		5	30.88		9.92	211		44.03			10.29	328
n/m = not meaningful
*		Diluted EPS is the same as basic EPS, as there were no outstanding, dilutive potential ordinary shares.

MCL Land Limited
Consolidated Statements of Comprehensive Income and Changes in Equity
for the three months ended 30th June
Consolidated Statement of Comprehensive Income for the three months ended 30th June
			2010		2009
			US$'000		US$'000
Profit after tax			114,261		36,694
Other comprehensive (loss)/income:
	Translation difference		(542)		18,196
Total comprehensive income attributable to
	shareholders of the Company		113,719		54,890
Consolidated Statement of Changes in Equity for the three months ended 30th June
		Attributable to shareholders
		Share	Translation	Retained	Total
		capital	reserve	earnings	equity
		US$'000	US$'000	US$'000	US$'000
2010
Balance at 1st April		276,657	122,094	184,723	583,474
Total comprehensive income for the financial period		-	(542)	114,261	113,719
Dividend		-	-	(32,966)	(32,966)
Balance at 30th June		276,657	121,552	266,018	664,227
2009
Balance at 1st April		276,657	88,409	9,297	374,363
Total comprehensive income for the financial period		-	18,196	36,694	54,890
Dividend		-	-	(25,493)	(25,493)
Balance at 30th June		276,657	106,605	20,498	403,760
The number of issued ordinary shares as at 30th June 2010 was 369,985,977 (2009: 369,985,977). The Company did not hold any treasury shares as at 30th June 2010 and 2009.

MCL Land Limited
Consolidated Statements of Comprehensive Income and Changes in Equity
for the six months ended 30th June
Consolidated Statement of Comprehensive Income for the six months ended 30th June
			2010		2009
			US$'000		US$'000
Profit after tax			162,917		38,082
Other comprehensive income/(loss):
	Translation difference		1,048		(2,778)
Total comprehensive income attributable to
	shareholders of the Company		163,965		35,304
Consolidated Statement of Changes in Equity for the six months ended 30th June
		Attributable to shareholders
		Share	Translation	Retained	Total
		capital	reserve	earnings	equity
		US$'000	US$'000	US$'000	US$'000
2010
Balance at 1st January		276,657	120,504	136,067	533,228
Total comprehensive income for the financial period		-	1,048	162,917	163,965
Dividend		-	-	(32,966)	(32,966)
Balance at 30th June		276,657	121,552	266,018	664,227
2009
Balance at 1st January		276,657	109,383	7,909	393,949
Total comprehensive income for the financial period		-	(2,778)	38,082	35,304
Dividend		-	-	(25,493)	(25,493)
Balance at 30th June		276,657	106,605	20,498	403,760
The number of issued ordinary shares as at 30th June 2010 was 369,985,977 (2009: 369,985,977). The Company did not hold any treasury shares as at 30th June 2010 and 2009.

MCL Land Limited
Consolidated Balance Sheet
				At		At
				30.6.2010		31.12.2009
		Note		US$'000		US$'000
Non-current assets 1
Plant and equipment				271		346
Investment properties				15,937		15,382
Investments in joint ventures				29,350		30,317
Deferred tax assets				2,362		690
				47,920		46,735
Current assets 2
Development properties for sale				448,726		543,409
Amounts owing by joint ventures				65,925		72,466
Debtors and prepayments				117,597		67,534
Bank balances				361,739		192,464
				993,987		875,873
Total assets				1,041,907		922,608
Non-current liabilities 3
Borrowings		6		83,061		90,194
Deferred tax liabilities				5		270
Creditors				3,947		7,254
				87,013		97,718
Current liabilities 4
Borrowings		6		-		9,550
Amounts owing to joint venture				-		482
Creditors				251,174		249,038
Current tax liabilities				39,493		32,592
				290,667		291,662
Total liabilities				377,680		389,380
Net assets				664,227		533,228
Equity:
Share capital and reserves
Share capital				276,657		276,657
Translation reserve				121,552		120,504
Retained earnings				266,018		136,067
Shareholders' funds				664,227		533,228
Net asset value per share				US$1.80		US$1.44
Explanatory notes on material variances:
1	The increase in non-current assets at 30.6.2010 as compared to 31.12.2009 is mainly due to higher deferred tax assets provided for marketing expenses and recognition of deferred tax assets arising from prior years' losses. This is partially offset by the Group's share of losses incurred by the Group's joint ventures.
2	The increase in current assets is mainly due to the prepayment of 25% of the land cost for the site at Hougang Avenue 2 and higher bank balances from sales proceeds collected from the Group's development properties. This is partially offset by lower development properties for sale due to completion of Waterfall Gardens in the current financial period.
3	The lower non-current liabilities at 30.6.2010 as compared to 31.12.2009 is mainly due to repayment of long-term bank loans during the financial period from progress billings collected from the Group's development properties.
4	The lower current liabilities at 30.6.2010 as compared to 31.12.2009 is mainly due to repayment of short-term bank loans during the financial period. This is partially offset by an increase in progress billings collected from the Group's development properties and a higher provision for income tax on the Group's taxable profit.

MCL Land Limited
Company Balance Sheet
	At		At
	30.6.2010		31.12.2009
	US$'000		US$'000
Non-current assets
Plant and equipment	252		325
Interests in subsidiaries	57,557		57,561
Investments in joint ventures	28,124		28,482
	85,933		86,368
Current assets
Amounts owing by subsidiaries	308,438		273,493
Amounts owing by joint ventures	65,925		72,466
Debtors and prepayments	230		318
Bank balances	246,543		135,281
	621,136		481,558
Total assets	707,069		567,926
Current liabilities
Amounts owing to subsidiaries	242,609		126,061
Amounts owing to joint venture	-		482
Creditors	2,601		3,734
Current tax liabilities	501		721
	245,711		130,998
Total liabilities	245,711		130,998
Net assets	461,358		436,928
Equity:
Share capital and reserves
Share capital	276,657		276,657
Translation reserve	102,122		102,236
Retained earnings	82,579		58,035
Shareholders' funds	461,358		436,928
Net asset value per share	US$1.25		US$1.18

MCL Land Limited
Company Statements of Comprehensive Income and Changes in Equity
for the three months ended 30th June
Company Statement of Comprehensive Income for the three months ended 30th June
			2010		2009
			US$'000		US$'000
Profit/(Loss) after tax			1,569		(23,541)
Other comprehensive (loss)/income:
	Translation difference		(735)		19,630
Total comprehensive income/(loss) attributable to
	shareholders of the Company		834		(3,911)
Company Statement of Changes in Equity for the three months ended 30th June
		Attributable to shareholders
		Share	Translation	Retained	Total
		capital	reserve	earnings	equity
		US$'000	US$'000	US$'000	US$'000
2010
Balance at 1st April		276,657	102,857	113,976	493,490
Total comprehensive income for the financial period		-	(735)	1,569	834
Dividend		-	-	(32,966)	(32,966)
Balance at 30th June		276,657	102,122	82,579	461,358
2009
Balance at 1st April		276,657	70,539	53,610	400,806
Total comprehensive loss for the financial period		-	19,630	(23,541)	(3,911)
Dividend		-	-	(25,493)	(25,493)
Balance at 30th June		276,657	90,169	4,576	371,402

MCL Land Limited
Company Statements of Comprehensive Income and Changes in Equity
for the six months ended 30th June
Company Statement of Comprehensive Income for the six months ended 30th June
			2010		2009
			US$'000		US$'000
Profit/(Loss) after tax			57,510		(74,746)
Other comprehensive loss:
	Translation difference		(114)		(5,879)
Total comprehensive income/(loss) attributable to
	shareholders of the Company		57,396		(80,625)
Company Statement of Changes in Equity for the six months ended 30th June
		Attributable to shareholders
		Share	Translation	Retained	Total
		Capital	reserve	earnings	equity
		US$'000	US$'000	US$'000	US$'000
2010
Balance at 1st January		276,657	102,236	58,035	436,928
Total comprehensive income for the financial period		-	(114)	57,510	57,396
Dividend		-	-	(32,966)	(32,966)
Balance at 30th June		276,657	102,122	82,579	461,358
2009
Balance at 1st January		276,657	96,048	104,815	477,520
Total comprehensive loss for the financial period		-	(5,879)	(74,746)	(80,625)
Dividend		-	-	(25,493)	(25,493)
Balance at 30th June		276,657	90,169	4,576	371,402

MCL Land Limited

Consolidated Statement of Cash Flows

						Three months ended				Six months ended
						30.6.2010		30.6.2009		30.6.2010		30.6.2009
				Note		US$'000		US$'000		US$'000		US$'000
Profit before tax						136,922		42,383		184,057		44,352
Non-cash items
	Interest income					(278)		(243)		(524)		(545)
	Share of joint ventures' results					(796)		167		509		576
	Depreciation					22		35		48		72
	Reversal of write-down on development properties for sale			3		-		-		(50,897)		-
	(Profit)/Loss on disposal of plant and equipment					(1)		1		(22)		1
	Unrealised translation loss/(gain)					2		(2)		3		(2)
						(1,051)		(42)		(50,883)		102
Operating profit before working capital changes						135,871		42,341		133,174		44,454
Changes in working capital
	Development properties for sale					159,109		62,725		145,670		45,227
	Amounts owing by joint ventures					6,709		929		6,536		(112)
	Debtors and prepayments					(21,578)		13,426		(49,229)		24,703
	Creditors					(90,461)		(14,468)		(439)		1,103
						53,779		62,612		102,538		70,921
Cash flows generated from operations						189,650		104,953		235,712		115,375
	Interest received					225		263		352		557
	Income tax paid					(16,318)		(7,525)		(15,906)		(8,134)
						(16,093)		(7,262)		(15,554)		(7,577)
	Net cash flows generated from operating activities 5					173,557		97,691		220,158		107,798
Cash flows from investing activities
	Purchase of plant and equipment					(2)		(4)		(7)		(6)
	Net proceeds from sale of plant and equipment					-		-		57		-
	Net cash flows (used in)/generated from investing activities					(2)		(4)		50		(6)
Cash flows from financing activities
	Drawdown of loans					-		51,357		-		51,654
	Repayment of loans					(5,024)		(56,483)		(16,706)		(90,339)
	Dividend paid					(32,966)		(25,493)		(32,966)		(25,493)
	Net cash flows used in financing activities 6					(37,990)		(30,619)		(49,672)		(64,178)
Net change in cash and cash equivalents						135,565		67,068		170,536		43,614
Cash and cash equivalents at the beginning of the
	financial period					227,776		101,349		192,464		131,800
Effect of exchange rate changes						(1,602)		4,783		(1,261)		(2,214)
Cash and cash equivalents at the end of the financial period						361,739		173,200		361,739		173,200
Explanatory notes on material variances:

	5	The net cash flows generated from operating activities for the six months ended 30th June 2010 relate mainly to the completion of Waterfall Gardens, partially offset by increased progress billings not yet received.
	6	The net cash flows used in financing activities for the six months ended 30th June 2010 relate mainly to long-term bank loans repaid from progress billings collected and payment of dividends on 26th May 2010.

MCL Land Limited
Notes
1	Accounting policies and basis of preparation
	The financial statements contained in this announcement are prepared in accordance with the accounting policies and methods of computation set out in the 2009 audited accounts, which are based on International Financial Reporting Standards ("IFRS").  There have been no changes to the accounting policies described in the 2009 annual financial statements except for the adoption of the amendments and interpretations set out below:
	Amendment to IAS 39		Eligible Hedged Items
	Improvements to IFRSs (2009)
	IFRIC 17		Distributions of Non-cash Assets to Owners
	The adoption of these amendments and interpretations do not have any significant impact on the results of the Group.
2	Profit
			Group
			Three months ended					Six months ended
			30.6.2010		30.6.2009	Change		30.6.2010		30.6.2009	Change
			US$'000		US$'000	%		US$'000		US$'000	%
	Profit before tax is determined
	after including:
	Reversal of write-down on development
	properties for sale (Note 3)		-		-			50,897		-	n/m
	Net exchange gain/(loss)		24		(1)	n/m		26		-	n/m
	Rental income		221		278	-21		449		545	-18
	Interest income		278		243	14		524		545	-4
	Depreciation on plant and equipment		(22)		(35)	-37		(48)		(72)	-33
	Profit/(Loss) on disposal of plant
	and equipment		1		(1)	n/m		22		(1)	n/m
	n/m = not meaningful
3	Other income
	Included in the income for the six months ended 30th June 2010 is a reversal of a US$50,897,000 (2009: nil) write-down previously made on the Group's development properties for sale.
4	Tax
	The provision for income tax is based on the statutory tax rates prevailing in the respective countries in which Group companies operate after taking into account expenses which are not tax deductible, income not subject to tax and Group tax relief.

5	Earnings per share *
			Group
			Three months ended				Six months ended
			30.6.2010		30.6.2009		30.6.2010		30.6.2009
	Basic earnings per share*
	Profit attributable to shareholders (US$'000)		114,261		36,694		162,917		38,082
	Weighted average number of ordinary shares
		in issue ('000)	369,986		369,986		369,986		369,986
	Basic earnings per share (US¢)		30.88		9.92		44.03		10.29
	* Diluted EPS is the same as basic EPS, as there were no outstanding, dilutive potential ordinary shares.
6	Group borrowings
							Group
							At		At
							30.6.2010		31.12.2009
							US$'000		US$'000
	Borrowings due within one year
		- secured					-		9,550
	Borrowings due after one year
		- secured					83,061		90,194
							83,061		99,744
	Certain subsidiaries of the Company have mortgaged their development properties as security for bank loans.  The net book value of properties mortgaged as at 30th June 2010 was US$207.2 million (31st December 2009: US$289.9 million).
7	Interested person transactions
	Name of interested person		Aggregate value of all interested person transactions (excluding transactions less than S$100,000 and transactions conducted under the shareholders' mandate pursuant to Rule 920)				Aggregate value of interested person transactions conducted under shareholders' mandate pursuant to Rule 920 (excluding transactions less than S$100,000)
			US$'000				US$'000
	Three months ended 30th June 2010		-				-
	Six months ended 30th June 2010		-				-

8	Issue of shares
	There have been no changes in the issued share capital of the Company since 31st December 2009.
	There are no outstanding convertible instruments issued or treasury shares held by the Company as at 30th June 2010.
	The total number of issued shares (excluding treasury shares) as at 30th June 2010 and 31st December 2009 was 369,985,977.
9	Others
	The results do not include any pre-acquisition profits and have not been affected by any item, transaction or event of a material and unusual nature.  No significant transaction or event has occurred between 30th June 2010 and the date of this report.
	- end -
	For further information, please contact: Steve Chu Chief Financial Officer MCL Land Limited Tel: [phone]
	Full text of the Financial Statements and Dividend Announcement for the six months ended 30th June 2010 can be accessed through the internet at www.mclland.com.sg.

 

END

 

 

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