GuocoLand reports 1HFY2023 earnings of $59 million

GuocoLand reported a 46% y-o-y increase in revenue for 1HFY2023 ended Dec 2022. This Tengah Plantation EC was largely thanks to contributions from its development, investment, and hotel businesses. Earnings for the same period was trimmed at 12% y-o-y, to reach $59 million. Had the one-off disposal gain of $14.3 million, booked in preceding period’s 1HFY2022, been excluded, then GuocoLand’s earnings would have seen an 11% increase.

The company is aiming to boost proportionate earnings from investment income, which is typically more recurrent in nature. Development is currently their main source of revenue though, which drove 83%, or $550.4 million, of the total revenue for 1HFY203.

Wallich Residence, GuocoLand’s ultra-luxury development, has sold 96% of its 181 units to date. Meyer Mansion, another freehold luxury development (completion expected in 2024) is 96% sold, having 200 units. Midtown Modern, a 558-unit luxury development, is 85% sold and Midtown Bay (219 units) is 44% sold.

The joint venture between Hong Leong Holdings, GuocoLand and Hong Realty (Private), The Avenir, is 90% sold, boasting 376 units. Lentor Modern, launched in September, has sold 521 of its 605 units; Lentor Hills Residences (598 units) should be launched in the first half of the year, in a joint venture with Hong Leong Holdings, GuocoLand and TID.

GuocoLand’s investment business has seen improvement too, contributing 11% of total revenue, or $74.8 million, and 35% of the gross profits. Revenue has been bolstered by rentals from Guoco Tower and the Guoco Changfeng City South Tower in Shanghai.

CEO of GuocoLand, Cheng Hsing Yao, noted the various challenges that the real estate industry has faced this past period – supply chain issues, labour shortage, inflation and rising costs – but expressed satisfaction in the outcomes delivered to shareholders. Cheng says he expects “flight to quality” by global and regional companies to continue, even with the hybrid work environments, given their premium Grade A offices have seen consistent growth in revenue.

The Guoco Midtown, an integrated mixed-use development with 709,000 sq ft of office space in the Central Business District, should be fully operational next year. 33% of the units at Guoco Tower are estimated to be fully leased, and 95% occupied at 20 Collyer Quay. Meanwhile, the South Tower of Guoco Changfeng has a take-up rate of 91% for office spaces, while its retail component is fully leased to a master tenant.

GuocoLand saw three-fold growth in revenue from its hotel business, which brought in $35.3 million. Improvements in China’s easing of pandemic control policies and government support should bolster business confidence and the real estate sector at large, according to GuocoLand.