OFFICE landlord Singapore Land yesterday posted group net earnings of $661.7 million for the year ended Dec 31, 2010, on the back of a $538.5 million fair-value gain on investment properties.
This is a reversal from the preceding year, when the group reported a net loss of nearly $266 million due to a $608.6 million fair-value loss on investment properties as a result of the plunge in office values in the aftermath of the global financial crisis.
Parent United Industrial Corporation (UIC) posted a net profit of $703 million for FY 2010, against a $142.8 million net loss in FY 2009. UIC booked a $691 million fair-value gain on investment properties in FY 2010, against a fair-value loss on investment properties of $658.5 million for the preceding year.
Both companies did not provide a breakdown of fourth-quarter results.
SingLand and UIC said that the Singapore office market is likely to remain favourable with growth expected in the Republic's economy.
Retail rents are expected to remain stable due to the increased supply of retail space last year, notwithstanding rising employment and continued growth in visitor arrivals.
SingLand's notice of valuation of investment properties as at Dec 31, 2010 showed that Singapore Land Tower in Raffles Place was valued at $1.345 billion, up 22.3 per cent from $1.1 billion at end-2009.
Clifford Centre at Raffles Place too saw its valuation go up from $428 million at end-2009 to $482 million at end-2010. The valuation for another office development, The Gateway at Beach Road, increased about 14.5 per cent from $873 million to $1 billion over the same period.
SingLand's revenue rose 33 per cent to $527.2 million last year on the back of higher sales of trading properties and higher revenue at the Pan Pacific Singapore hotel, partially offset by a 4 per cent or $9.4 million drop in gross rental income from investment properties as renewal rental rates were still lower than the expiry rates contracted 'several years ago', SingLand said in its results statement.
Net profit from operations slid by $10.5 million or 5 per cent to $192.7 million. The asset revaluation gain, net of deferred income tax and minority interests, of $469 million, resulted in an overall net profit of $661.7 million.
SingLand is recommending a first-and-final dividend of 20 cents per share, unchanged from the preceding year. Net asset value (NAV) per share rose from $8.60 at end-2009 to $10 at end-2010.
The group posted earnings per share (EPS) for FY 2010 of about $1.60 including the fair-value gain on investment properties and 46.7 cents excluding that gain. In FY 2009, SingLand had posted loss per share of 64.5 cents including the fair-value loss on investment properties and EPS of 49.3 cents excluding that loss.
On the stock market yesterday, SingLand closed four cents lower at $7.29, while UIC ended one cent higher at $2.78.
UIC's group NAV per share rose from $2.22 at end-2009 to $2.71 at end-2010. Its EPS for FY 2010 was 51.0 cents including fair-value gain on investment properties and 17.2 cents excluding that gain.
In FY 2009, UIC had posted loss per share of 10.4 cents including fair-value loss on investment properties and EPS of 17.5 cents excluding that loss.
UIC Building at Shenton Way was valued at $659 million at end-December 2010, up 62.7 per cent from $405 million at end-December 2009. In August last year, the group paid a $160.1 million development charge to the Urban Redevelopment Authority for the proposed redevelopment of the building to a 60:40 residential:commercial scheme with a gross floor area of about 926,589 sq ft.
UIC's group revenue eased 4 per cent or $38.6 million to $972 million due mainly to lower sale of trading properties following the completion of several residential property projects and lower rental income, partly offset by higher revenue from hotel operations.
Net profit from operations dipped 2 per cent or $3.8 million to $237 million. The asset revaluation gain, net of deferred income tax and minority interests, of $466 million led to an overall net profit of $703 million.
UIC shareholders will receive an unchanged first-and-final dividend of three cents per share.