MCL Land Q1 Results

Hongkong Land Hldgs Ld 29 April 2008 To: Business Editor 29th April 2008 For immediate release MCL Land Limited First Quarter 2008 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 Y K Pang (852) 2842 8428 G M Brown (852) 2842 8138 (852) 9612 3496 Matheson & Co., Limited Philip Hawkins (020) 7816 8136 GolinHarris Sue So (852) 2501 7984 Weber Shandwick Financial Richard Hews/ Hannah Marwood (020) 7067 0700 MCL LAND LIMITED FIRST QUARTER 2008 FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT Highlights • Profit recognised on completion of The Grange • Development site acquired at Yishun Avenue 1 'Uncertainties in financial markets and the slowdown in the global economy could affect the residential property sector in Singapore in the short term; however, favourable economic fundamentals should mean that longer-term prospects remain positive. The expected completion of Mera Springs and The Esta in Singapore should benefit MCL Land's overall performance in 2008.' Y K Pang, Chairman 29 April 2008 Group Results ------------------------------------------------------------------------------------------------------------ Three months ended 31 March ------------------------------------------------------------------------------------------------------------ 2008 2007 Change 2008 Change US$m US$m % S$m % ------------------------------------------------------------------------------------------------------------ Revenue 0.4 0.4 - 0.5 - 17 Profit before tax 5.1 0.7 n/m 7.1 n/m Underlying profit attributable to shareholders * 5.0 0.2 n/m 6.9 n/m Profit attributable to shareholders 5.0 1.0 409 6.9 360 ------------------------------------------------------------------------------------------------------------ USc USc Sc ------------------------------------------------------------------------------------------------------------ Underlying earnings per share * 1.36 0.05 n/m 1.87 n/m Earnings per share 1.36 0.27 404 1.87 368 ------------------------------------------------------------------------------------------------------------ At At At 31.3.2008 31.12.2007 Change 31.3.2008 Change US$m US$m % S$m % ------------------------------------------------------------------------------------------------------------ Shareholders'funds 553.3 524.2 6 763.5 10 ------------------------------------------------------------------------------------------------------------ US$ US$ S$ ------------------------------------------------------------------------------------------------------------ Net asset value per share 1.50 1.42 6 2.06 10 ------------------------------------------------------------------------------------------------------------ The exchange rate of US$1=S$1.38 (31.12.2007: US$1=S$1.44) was used for translating assets and liabilities at the balance sheet date and average monthly transaction rates of US$1=S$1.40 (2007: US$1=S$1.53) was used for translating the results for the financial period. The financial results for the three months ended 31 March 2008 and 31 March 2007 have been prepared based on the International Financial Reporting Standards ('IFRS'). These financial results have not been audited or reviewed by the Auditors. * The basis for calculating underlying profit and earnings is set out in Note 4 of this report. CHAIRMAN'S STATEMENT Overview Sentiment in the residential property market in Singapore was mixed during the quarter. While price levels remained firm, activity levels were lower. 762 new residential homes were sold in first quarter of 2008, against 4,783 units in the corresponding period in 2007 and 1,449 units sold in fourth quarter of 2007. Group Performance MCL Land recorded revenue of US$0.4 million for the quarter ended 31 March 2008, unchanged from the corresponding period in 2007, primarily arising from rental income from the Group's investment properties. The underlying profit for the period was US$5.0 million, compared with US$0.2 million in the first three months of 2007. This improvement was due mainly to the completion in March of The Grange, the Group's joint venture project in Singapore, and the sales of the remaining twelve shops at the Kuala Lumpur Suburban Centre in Malaysia. Shareholders' funds were US$553 million at the end of March 2008, up from US$524 million at 31 December 2007. Progress billings of US$26 million from development projects collected during the quarter reduced the Group's net debt from US$244 million to US$211 million, bringing net gearing down to 38% at the end of March 2008, from 47% at the end of 2007. Dividend The Board is not recommending the payment of an interim dividend for the first quarter of 2008 (2007: nil). Properties No new development projects were launched in Singapore during the period under review, and all projects launched previously had been fully sold by the end of 2007 other than two units at Hillcrest Villa. Construction work on the Group's development projects is progressing well. The Grange obtained its Temporary Occupation Permit in March 2008, and The Esta and Mera Springs are expected to complete in the second half of the year. There was a good performance from the Group's joint venture developments in Malaysia. The 300 shop units at Kuala Lumpur Suburban Centre are now fully sold. The 391-unit condominium development, Riana Green Phase 1, in which our joint venture company, MSL Properties Sdn Bhd, has a 50% interest, received a good response with over 68% of the units sold. Progress was also made in the sales of the joint venture development in Seremban with 97 of the 260 terrace houses, bungalows and bungalow lots sold by the end of March 2008. Acquisitions The Group's tender for a 99-year leasehold land parcel in Yishun Avenue 1 was awarded by the Housing Development Board in March 2008. The Group's offer to purchase Casa Nassau at Upper East Coast Road was approved by the Strata Titles Board in April 2008 and completion of the purchase is expected in July 2008. Prospects Uncertainties in financial markets and the slowdown in the global economy could affect the residential property sector in Singapore in the short term; however, favourable economic fundamentals should mean that the longer-term prospects remain positive. The expected completion of Mera Springs and The Esta in Singapore should benefit MCL Land's overall performance in 2008. Y K Pang Chairman 29 April 2008 Statement pursuant to Rule 705(4) 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 financial results for the three months ended 31 March 2008 to be false or misleading in any material respect. On behalf of the Directors Y K Pang Chairman Hassan Abas Director 29 April 2008 ------------------------------------------------------------------------------------------- MCL Land Limited Consolidated Profit and Loss Account for the three months ended 31 March ------------------------------------------------------------------------------------------- 2008 2007 Change Note US$'000 US$'000 % Revenue 2 365 393 - 7 Cost of sales - - - ---------- ---------- Gross profit 365 393 - 7 Other operating income 510 2,305 - 78 Property related expenses (177) (1,244) - 86 Administrative expenses (515) (420) 23 Financing charges - - - Share of joint ventures' results 4,941 (355) n/m ---------- ---------- Profit before tax 2 5,124 679 n/m Tax 3 (110) 307 n/m ---------- ---------- Profit after tax attributable to shareholders 5,014 986 409 ---------- ---------- ------------------------------------------------------------------------------------------- USc USc % ------------------------------------------------------------------------------------------- Earnings per share ('EPS') attributable to shareholders - basic and diluted* 4 1.36 0.27 404 ------------------------------------------------------------------------------------------- n/m = not meaningful * Diluted EPS is the same as basic EPS, as there were no outstanding share options. -------------------------------------------------------------------------------- MCL Land Limited Consolidated Balance Sheet -------------------------------------------------------------------------------- At At 31.3.2008 31.12.2007 Note US$'000 US$'000 Non-current assets ----------- ----------- Plant and equipment 336 354 Investment properties 18,371 17,675 Investments in joint ventures 37,109 30,743 Deferred tax assets 354 319 ----------- ----------- 56,170 49,091 Current assets ----------- ----------- Development properties for sale 886,840 761,363 Amounts owing by joint ventures 105,077 100,763 Debtors and prepayments 62,012 169,953 Bank balances 91,280 78,419 ----------- ----------- 1,145,209 1,110,498 ----------- ----------- Total assets 1,201,379 1,159,589 ----------- ----------- Non-current liabilities ----------- ----------- Borrowings 5 273,127 227,863 Deferred tax liabilities 995 958 Retention money payable 7,483 6,337 ----------- ----------- 281,605 235,158 Current liabilities ----------- ----------- Borrowings 5 29,135 94,760 Amounts owing to joint ventures 145 139 Creditors 321,418 290,385 Current tax liabilities 15,753 14,974 ----------- ----------- 366,451 400,258 ----------- ----------- Total liabilities 648,056 635,416 ----------- ----------- Net assets 553,323 524,173 =========== =========== Equity: Share capital and reserves Share capital 276,657 276,657 Translation reserve 129,364 105,228 Retained earnings 147,302 142,288 ----------- ----------- Shareholders' funds 553,323 524,173 =========== =========== Net asset value per share US$1.50 US$1.42 ------------------------------------------------------------------------------------------- MCL Land Limited Consolidated Statement of Changes in Equity for the three months ended 31 March ------------------------------------------------------------------------------------------- Attributable to shareholders --------------------------------------------- Share Translation Retained Total capital reserve earnings equity US$'000 US$'000 US$'000 US$'000 2008 Balance at 1 January 276,657 105,228 142,288 524,173 --------------------------------------------- Net gain recognised directly in equity - translation difference - 24,136 - 24,136 Profit for the financial period - - 5,014 5,014 --------------------------------------------- Total recognised gain for the financial period - 24,136 5,014 29,150 --------------------------------------------- Balance at 31 March 276,657 129,364 147,302 553,323 ============================================= 2007 Balance at 1 January 276,657 77,370 95,154 449,181 --------------------------------------------- Net gain recognised directly in equity - translation difference - 5,724 - 5,724 Profit for the financial period - - 986 986 --------------------------------------------- Total recognised gain for the financial period - 5,724 986 6,710 --------------------------------------------- Balance at 31 March 276,657 83,094 96,140 455,891 ============================================= -------------------------------------------------------------------------------- MCL Land Limited Company Balance Sheet -------------------------------------------------------------------------------- At At 31.3.2008 31.12.2007 US$'000 US$'000 Non-current assets ----------- ----------- Plant and equipment 289 304 Interests in subsidiaries 108,447 103,650 Investments in joint ventures 28,965 27,684 ----------- ----------- 137,701 131,638 Current assets ----------- ----------- Amounts owing by subsidiaries 430,330 460,975 Amounts owing by joint ventures 103,816 99,558 Debtors and prepayments 172 201 Bank balances 257 3,029 ----------- ----------- 534,575 563,763 ----------- ----------- Total assets 672,276 695,401 ----------- ----------- Non-current liability Borrowings 47,108 45,025 Current liabilities ----------- ----------- Borrowings 29,135 94,760 Amounts owing to subsidiaries 114,091 93,128 Amounts owing to joint ventures 145 139 Creditors 3,746 5,101 Current tax liabilities 2,382 2,276 ----------- ----------- 149,499 195,404 ----------- ----------- Total liabilities 196,607 240,429 ----------- ----------- Net assets 475,669 454,972 =========== =========== Equity: Share capital and reserves Share capital 276,657 276,657 Translation reserve 114,402 93,361 Retained earnings 84,610 84,954 ----------- ----------- Shareholders' funds 475,669 454,972 =========== =========== Net asset value per share US$1.29 US$1.23 ------------------------------------------------------------------------------------------ MCL Land Limited Company Statement of Changes in Equity for the three months ended 31 March ------------------------------------------------------------------------------------------ Share Translation Retained Total capital reserve earnings equity US$'000 US$'000 US$'000 US$'000 2008 Balance at 1 January 276,657 93,361 84,954 454,972 -------------------------------------------- Net gain recognised directly in equity - translation difference - 21,041 - 21,041 Loss for the financial period - - (344) (344) -------------------------------------------- Total recognised gain/(loss) for the financial period - 21,041 (344) 20,697 -------------------------------------------- Balance at 31 March 276,657 114,402 84,610 475,669 ============================================ 2007 Balance at 1 January 276,657 67,077 84,744 428,478 -------------------------------------------- Net gain recognised directly in equity - translation difference - 5,156 - 5,156 Profit for the financial period - - 943 943 -------------------------------------------- Total recognised gain for the financial period - 5,156 943 6,099 -------------------------------------------- Balance at 31 March 276,657 72,233 85,687 434,577 ============================================ ------------------------------------------------------------------------------- MCL Land Limited Consolidated Statement of Cash Flows for the three months ended 31 March ------------------------------------------------------------------------------- 2008 2007 US$'000 US$'000 Profit before tax 5,124 679 Non-cash items ---------- ---------- Interest income (423) (362) Share of joint ventures' results (4,941) 355 Depreciation 43 77 Fair value gain for investment properties - (1,100) Unrealised translation losses 1 1 Profit on disposal of plant and equipment - (2) ---------- ---------- (5,320) (1,031) ---------- ---------- Operating loss before working capital changes (196) (352) Changes in working capital ---------- ---------- Development properties for sale (85,964) (56,534) Amount owing by joint ventures 332 (114) Debtors and prepayments 113,960 (11,152) Creditors 18,148 58,188 ---------- ---------- 46,476 (9,612) ---------- ---------- Cash flows generated from/(used in) operations 46,280 (9,964) ---------- ---------- Interest paid (2,106) (3,735) Interest received 472 269 Income tax paid (40) (757) ---------- ---------- (1,674) (4,223) ---------- ---------- Net cash flows generated from/(used in) operating activities 44,606 (14,187) Cash flows from investing activities ---------- ---------- Purchase of plant and equipment (10) (24) Net proceeds from sale of plant and equipment - 2 ---------- ---------- Net cash flows used in investing activities (10) (22) Cash flows from financing activities ---------- ---------- Drawdown of loans 58,263 33,125 Repayment of loans (94,343) (12,187) ---------- ---------- Net cash flows (used in)/provided by financing activities (36,080) 20,938 ---------- ---------- Net change in cash and cash equivalents 8,516 6,729 Cash and cash equivalents at the beginning of the financial period 78,419 48,801 Effect of exchange rate changes 4,345 575 ---------- ---------- Cash and cash equivalents at the end of the financial period 91,280 56,105 ========== ========== -------------------------------------------------------------------------------- MCL Land Limited Notes -------------------------------------------------------------------------------- 1 Accounting policies and basis of preparation The financial statements contained in this announcement are consistent with those set out in the 2007 audited accounts which have been prepared in conformity with International Financial Reporting Standards ('IFRS'), including International Accounting Standards ('IAS') and interpretations adopted by the International Accounting Standards Board. There have been no changes to the accounting policies set out in the 2007 audited accounts except for the adoption of the following new standards, amendments and interpretations: IFRIC 11 Group Treasury Share Transactions IFRIC 12 Service Concession Arrangements IFRIC 13 Customer Loyalty Programmes IFRIC 14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction The adoption of the new interpretations did not have a material impact on the results of the Group. 2 Revenue and Profit Group For the three months ended 31 December 2008 2007 Change US$'000 US$'000 % Profit before tax is determined after including: Fair value gains for investment properties - 1,100 -100 Net exchange gain 14 1 n/m Rental income 365 371 - 2 Interest income 423 362 17 Depreciation on plant and equipment (43) (77) - 44 Profit on disposal of plant and equipment - 2 -100 ========== ========== n/m = not meaningful 3 Tax The provision for income tax is based on the statutory tax rates prevailing in the respective countries in which Group companies operate after taking into account expenses which are not tax deductible, income not subject to tax and Group tax relief. 4 Earnings per share * Group For the three months ended 31 March 2008 2007 Basic earnings per share* Profit attributable to shareholders (US$'000) 5,014 986 Weighted average number of ordinary shares in issue ('000) 369,986 369,986 Basic earnings per share (USc) 1.36 0.27 ========== ========== Underlying earnings per share Underlying profit attributable to shareholders (US$'000) 5,014 194 Basic underlying earnings per share (USc) 1.36 0.05 ========== ========== A reconciliation of the underlying profit and profit attributable to shareholders is as follows: Group For the three months ended 31 March 2008 2007 US$'000 US$'000 Profit attributable to shareholders 5,014 986 Fair value gains of investment properties (net of tax) - (792) ---------- ---------- Underlying profit attributable to shareholders 5,014 194 ========== ========== * Diluted EPS is the same as basic EPS, as there were no outstanding share options. 5 Group borrowings Group At At 31.3.2008 31.12.2007 US$'000 US$'000 Borrowings due within one year - unsecured 29,135 94,760 Borrowings due after one year ---------- ---------- - unsecured 47,108 45,025 - secured 226,019 182,838 ---------- ---------- 273,127 227,863 ---------- ---------- 302,262 322,623 ========== ========== Certain subsidiaries of the Company have mortgaged their development properties as security for bank loans. The net book value of properties mortgaged as at 31 March 2008 was US$401.0 million (31 December 2007:US$325.8 million). 6 Interested person transactions Aggregate value of interested Aggregate value of all interested person transactions person transactions (excluding conducted under transactions less than S$100,000 shareholders' mandate and transactions conducted under pursuant to Rule 920 the shareholders' mandate (excluding transactions pursuant to Rule 920) less than S$100,000) Name of interested person ------------------------------------- ------------------------------------- US$'000 US$'000 Three months ended 31 March 2008 Hongkong Land Limited - Management consultancy fee 31 - ===================================== ===================================== 7 Issue of shares There were no rights, bonus or equity issues during the period 1 January 2008 to 31 March 2008. 8 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 31 March 2008 and the date of this report. - end - For further information, please contact: MCL Land Limited Steve Chu Full text of the Financial Statements and Dividend Announcement for the three months ended 31 March 2008 can be accessed through the internet at www.mclland.com.sg. This information is provided by RNS The company news service from the London Stock Exchange

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