GuocoLand sees FY2022 earnings more than double to $392.7 mil on higher net fair value gain

By Felicia Tan

/ The Edge Singapore |

August 30, 2022 11:17 AM SGT

GuocoLand's Guoco Tower. Picture: GuocoLand

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SINGAPORE (EDGEPROP) - GuocoLand Limited has reported earnings of $392.7 million for the FY2022 ended June, over 2.3 times higher than the $169.1 million reported in the year before.

For the 2HFY2022, earnings surged over 2.2 times to $325.2 million from $146.2 million in the 2HFY2021.

The earnings surge for the FY2022 was mainly due to the 155% y-o-y increase in other income of $354.6 million, which stemmed from the higher value gain from the group’s investment properties, Guoco Tower and Guoco Midtown.

Similarly, the earnings spike in the 2HFY2022 was mainly due to the 173% y-o-y growth in other income of $328.1 million. During the half-year period, the higher other income was thanks to the net fair value gain from GuocoLand’s other investment properties, driven by capital appreciation mainly from Guoco Tower and Guoco Midtown.

During the FY2022, revenue increased by 13% y-o-y to $965.5 million mainly due to the strong performance from the group’s property development and property investment businesses. Both businesses grew by 12% y-o-y and 10% y-o-y respectively.

Accordingly, gross profit increased by 36% y-o-y to $365.7 million. This was mainly due to recognition of a fair value gain in cost of sales for the transfer of Guoco Changfeng City’s South Tower from development properties to investment properties. Excluding the fair value gain from the transfer, gross profit margin for the year remained stable at approximately 30%.

Share of results of associates and joint ventures stood at a $7.7 million loss for the FY2022 compared to the profit of $12.7 million in the FY2021.

During the year, the group also completed the disposal of its Vietnam subsidiaries, resulting in a net profit from discontinued operation of $14.3 million.

Earnings per share (EPS) stood at 33.68 cents on a fully diluted basis in the FY2022, compared to the 13.52 cents from the FY2021.

During the FY2022, GuocoLand has declared a first and final dividend of 6 cents per share, unchanged from the year before. This year’s dividend will be payable on Nov 29.

As at June 30, cash and cash equivalents stood at $1.08 billion.

“Our strategy to diversify the group’s profit sources through growing our investment business in addition to development business is delivering results. As Guoco Midtown completes in stages, it will further boost our recurrent income,” says the group’s CEO Cheng Hsing Yao.

He adds: “Over the years, we have built up a strong track record of delivering exceptional integrated mixed-use developments and premium homes from Singapore to Shanghai. Meanwhile, we have developed strong end-to-end capabilities that has allowed us to stay resilient and perform well amidst a highly volatile business environment. This end-to-end capability will also allow us to take on new complex projects or enter new market segments.”

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