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1st Quarter Results

29th Apr 2009 10:17

RNS Number : 3190R

Hongkong Land Hldgs Ld

28 April 2009

For Immediate release

29th April 2009

MCL Land Limited

First Quarter 2009 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

GolinHarris
Sue So	(852) 2501 7984

29th April 2009

MCL LAND LIMITED

FIRST QUARTER 2009 FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

·;	The Fernhill completes in March
·;	Profit attributable to shareholders US$1.4 million

"The outlook for the residential property markets in Singapore and Malaysia remains uncertain, despite the recent pick up in sales of mass market residential properties in Singapore. Nevertheless, the Group's results for 2009 should benefit from the completion of two further development projects in Singapore, Tierra Vue and Hillcrest Villa. With strong cash flow generated from the sale of development properties and a healthy balance sheet, the Group is well placed to weather the difficult economic and market conditions."

Y K Pang, Chairman

29th April 2009

Group Results

	Three months ended 31 March
	2009	2008	Change	2009	Change
	US$m	US$m	%	S$m	%
Revenue	8.3	0.4	n/m	12.6	n/m
Profit before tax	2.0	5.1	- 62	3.0	- 58
Profit attributable to shareholders	1.4	5.0	- 72	2.1	- 70
	US¢	US¢		S¢
Earnings per share	0.38	1.36	- 72	0.57	- 70
	At 31.3.2009	At 31.12.2008	Change	At 31.3.2009	Change
	US$m	US$m	%	S$m	%
Shareholders' funds	374.4	393.9	- 5	569.1	-
	US$	US$		S$
Net asset value per share	1.01	1.06	- 5	1.54	1

The exchange rate of US$1=S$1.52 (31.12.2008: 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$1.52 (2008: US$1=S$1.41) was used for translating the results for the financial period.

The financial results for the three months ended 31stMarch 2009 and 31stMarch 2008 have been prepared based on the International Financial Reporting Standards ("IFRS"). The financial results for 31st March 2009 have not been audited or reviewed by the Auditors.

Overview

Overall market sentiment in the residential property market in Singapore remained subdued in the first quarter of 2009 as prices continued to fall in the face of weak market sentiment and a poor economic outlook. Sales of new residential properties, however, increased to 2,596 units, more than five times higher than that of the previous quarter, following a good response to mass market projects that were affordably priced and well located.

Group Performance

MCL Land recorded revenue of US$8.3 million for the quarter ended 31st March 2009, representing mainly the sale of five units in The Fernhill. This compares with US$0.4 million in the corresponding period in 2008, which represented mainly rental income from investment properties. Profit for the first quarter was US$1.4 million, compared with US$5.0 million in the first three months of 2008.

Shareholders' funds were US$374 million at the end of March 2009, down from US$394 million at 31st December 2008. The Group's net debt at 31st March 2009 was US$161 million, compared with US$181 million at the end of 2008. Net gearing was 43% at the quarter end, down from 46% at the end of 2008.

The Board is not recommending the payment of an interim dividend for the first quarter of 2009 (2008: nil).

Properties

No new development projects were launched in Singapore during the period under review. D'Pavilion, a 50-unit apartment development at Upper Serangoon Road, had 28% of the units committed as at 31st March 2009, while The Peak@Balmeg, a 180-unit condominium development, had 25% of its units committed. All other developments launched previously have been fully pre-sold, with the exception of two units at Hillcrest Villa.

The Fernhill obtained its Temporary Occupation Permit in March 2009. The purchasers of five of the 25 units paid the outstanding purchase price by the payment date, and this has been recognised in the results for the first quarter. The en-bloc purchaser of the remaining 20 units did not make the necessary payments, and the relevant revenue and profit was not recognised in the period. Had The Fernhill been paid in full, the revenue for the first quarter would have been US$31.0 million higher and the profit would have been US$9.3 million higher.

Construction of the Group's various projects is progressing well. Tierra Vue and Hillcrest Villa are on track to complete by the second and fourth quarters of 2009, respectively. Waterfall Gardens and D'Pavilion are scheduled to complete in 2010, followed by The Peak@Balmeg in 2011. In addition, the Group has seven development projects in Singapore with a total gross floor area of about 158,000 square metres that are at various stages of planning approval. These development projects are planned to be launched progressively over the next few years.

The Group's joint venture developments in Malaysia continued to perform satisfactorily. Riana Green Phase 1 had 93% of the units committed for sale as at 31st March 2009. Sales of the joint venture development in Seremban continued with 142 of the 270 terrace houses, bungalows, bungalow lots and shop offices committed for sale.

Construction of Wangsa Walk in Kuala Lumpur, a retail mall development by the Group's joint venture company, MSL Properties, is progressing well. The development is on schedule to complete by third quarter of 2009 with an estimated net lettable area of some 25,000 square metres, of which some 90% has been pre-committed.

Prospects

The outlook for the residential property markets in Singapore and Malaysia remains uncertain, despite the recent pick up in sales of mass market residential properties in Singapore. Nevertheless, the Group's results for 2009 should benefit from the completion of two further development projects in Singapore, Tierra Vue and Hillcrest Villa. With strong cash flow generated from the sale of development properties and a healthy balance sheet, the Group is well placed to weather the difficult economic and market conditions.

Y K Pang

Chairman

29th April 2009

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 three months ended 31st March 2009 to be false or misleading in any material respect.

On behalf of the Directors

Y K Pang

Chairman

Hassan Abas

Director

29th April 2009

MCL Land Limited
Consolidated Profit and Loss Account for the three months ended 31 March


			2009	2008	Change
		Note	US$'000	US$'000	%

Revenue			8,304	365	n/m
Cost of sales			(5,162)	-	n/m

Gross profit			3,142	365	n/m

Other operating income			331	510	- 35
Property related expenses			(146)	(177)	- 18
Administrative expenses			(949)	(515)	84
Share of joint ventures' results			(409)	4,941	n/m

Profit before tax		2	1,969	5,124	- 62

Tax		3	(581)	(110)	428

Profit after tax attributable to shareholders			1,388	5,014	- 72



			US¢	US¢	%

Earnings per share ("EPS") attributable to
	shareholders
	- basic and diluted*	4	0.38	1.36	- 72



n/m = not meaningful

*	Diluted EPS is the same as basic EPS, as there were no outstanding share options.

MCL Land Limited
Consolidated Statements of Comprehensive Income and Changes in Equity for the three months ended 31 March


Consolidated Statement of Comprehensive Income for the three months ended 31 March

		2009		2008
		US$'000		US$'000

Profit after tax		1,388		5,014

Translation difference		(20,974)		24,136

Total comprehensive (loss)/income attributable to shareholders		(19,586)		29,150



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

2009
Balance at 1 January	276,657	109,383	7,909	393,949

Comprehensive (loss)/income for the financial period	-	(20,974)	1,388	(19,586)

Balance at 31 March	276,657	88,409	9,297	374,363



2008
Balance at 1 January	276,657	105,228	142,288	524,173

Comprehensive income for the financial period	-	24,136	5,014	29,150

Balance at 31 March	276,657	129,364	147,302	553,323

MCL Land Limited
Consolidated Balance Sheet

			At	At
			31.3.2009	31.12.2008
		Note	US$'000	US$'000
Non-current assets 1
Plant and equipment			166	212
Investment properties			15,196	15,985
Investments in joint ventures			32,475	34,739
Deferred tax assets			792	874
			48,629	51,810
Current assets 2
Development properties for sale			664,671	683,534
Amounts owing by joint ventures			59,740	62,018
Debtors and prepayments			65,323	80,797
Bank balances			101,349	131,800
			891,083	958,149

Total assets			939,712	1,009,959

Non-current liabilities 3
Borrowings		5	240,738	298,242
Deferred tax liabilities			437	459
Creditors			331	-
Retention money payable			6,823	7,137
			248,329	305,838
Current liabilities 4
Borrowings		5	22,069	14,871
Amounts owing to joint venture			434	459
Creditors			278,101	277,437
Current tax liabilities			16,416	17,405
			317,020	310,172
Total liabilities			565,349	616,010

Net assets			374,363	393,949

Equity:
Share capital and reserves
Share capital			276,657	276,657
Translation reserve			88,409	109,383
Retained earnings			9,297	7,909
Shareholders' funds			374,363	393,949

Net asset value per share			US$1.01	US$1.06

Explanatory notes on material variances:
1	The decrease in non-current assets at 31.3.2009 as compared to 31.12.2008 is mainly due to the loss incurred from the Group's joint ventures and translation loss.
2	The decrease in current assets is mainly due to lower bank balances arising from the repayment of bank loans, lower development properties for sale from the completion of The Fernhill in March 2009 and progress billings received from the Group's completed projects.
3	The lower non-current liabilities at 31.3.2009 as compared to 31.12.2008 is mainly due to repayment of long-term bank loans during the financial period from progress billings collected from the Group's completed projects.
4	The higher current liabilities at 31.3.2009 as compared to 31.12.2008 is mainly due to the increase in short-term bank loans during the financial period.

MCL Land Limited
Company Balance Sheet

	At	At
	31.3.2009	31.12.2008
	US$'000	US$'000
Non-current assets
Plant and equipment	141	182
Interests in subsidiaries	55,105	58,909
Investments in joint ventures	26,290	27,773
	81,536	86,864

Current assets
Amounts owing by subsidiaries	301,470	353,289
Amounts owing by joint ventures	59,740	62,018
Debtors and prepayments	265	280
Bank balances	43,161	70,916
	404,636	486,503

Total assets	486,172	573,367

Non-current liability
Borrowings	42,758	45,170

Current liabilities
Borrowings	-	9,034
Amounts owing to subsidiaries	37,550	35,564
Amounts owing to joint venture	434	459
Creditors	2,982	3,336
Current tax liabilities	1,642	2,284
	42,608	50,677

Total liabilities	85,366	95,847

Net assets	400,806	477,520

Equity:
Share capital and reserves
Share capital	276,657	276,657
Translation reserve	70,539	96,048
Retained earnings	53,610	104,815
Shareholders' funds	400,806	477,520

Net asset value per share	US$1.08	US$1.29

MCL Land Limited
Company Statements of Comprehensive Income and Changes in Equity for the three months ended 31 March


Company Statement of Comprehensive Income for the three months ended 31 March

			2009		2008
			US$'000		US$'000

Loss after tax			(51,205)		(344)

Translation difference			(25,509)		21,041

Total comprehensive (loss)/income attributable to shareholders			(76,714)		20,697



Company 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

2009
Balance at 1 January	276,657	96,048		104,815		477,520

Comprehensive loss for the financial period	-	(25,509)		(51,205)		(76,714)

Balance at 31 March	276,657	70,539		53,610		400,806



2008
Balance at 1 January	276,657	93,361		84,954		454,972

Comprehensive income/(loss) for the financial period	-	21,041		(344)		20,697

Balance at 31 March	276,657	114,402		84,610		475,669

MCL Land Limited
Consolidated Statement of Cash Flows for the three months ended 31 March

			2009	2008
			US$'000	US$'000

Profit before tax			1,969	5,124
Non-cash items
		Interest income	(302)	(423)
		Share of joint ventures' results	409	(4,941)
		Depreciation	37	43
		Unrealised translation losses	-	1
			144	(5,320)
Operating profit/(loss) before working capital changes			2,113	(196)

Changes in working capital
		Development properties for sale	(16,210)	(85,964)
		Amounts owing by joint ventures	(1,041)	332
		Debtors and prepayments	11,277	113,960
		Creditors	15,571	18,148
			9,597	46,476
Cash flows generated from operations			11,710	46,280

		Interest paid	(1,288)	(2,106)
		Interest received	294	472
		Income tax paid	(609)	(40)
			(1,603)	(1,674)
		Net cash flows generated from operating activities 5	10,107	44,606

Cash flows from investing activities
		Purchase of plant and equipment	(2)	(10)
		Net cash flows used in investing activities	(2)	(10)

Cash flows from financing activities
		Drawdown of loans	297	58,263
		Repayment of loans	(33,856)	(94,343)
		Net cash flows used in financing activities 6	(33,559)	(36,080)

Net change in cash and cash equivalents			(23,454)	8,516
Cash and cash equivalents at the beginning of the financial period			131,800	78,419
Effect of exchange rate changes			(6,997)	4,345
Cash and cash equivalents at the end of the financial period			101,349	91,280

Explanatory notes on material variances:
	5	The net cash flows generated from operating activities for the financial period ended 31 March 2009 relates mainly to lower development costs incurred for on-going projects and advances to joint ventures.
	6	The net cash flows used in financing activities for the financial period ended 31 March 2009 relates mainly to long-term bank loans repaid from the progress billings collected from the Group's completed projects.

MCL Land Limited

Notes

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 2008 audited accounts, which are based on International Financial Reporting Standards ("IFRS"). There have been no changes to the accounting policies set out in the 2008 audited accounts except for the adoption of the new standards, amendments and interpretations shown below:

IAS 1 (Revised)

Presentation of Financial Statements

Amendment to IAS 19

Employee Benefits

Amendment to IAS 23

Borrowing Costs

Amendment to IAS 36

Impairment of Assets

Amendment to IAS 38

Intangible Assets

Amendment to IAS 40

Investment Property

Amendment to IFRS 2

Share-based Payment

Amendment to IFRS 7

Improving Disclosures about Financial Instruments

IFRS 8

Operating Segments

IFRIC 15

Agreements for Construction of Real Estate

IFRIC 16

Hedges of a Net Investment in a Foreign Operation

The adoption of the above standards, amendments and interpretations did not have a material impact on the results of the Group.

Profit

Group

For the three months ended 31 March

2009

2008

Change

US$'000

Profit before tax is determined after including:

Net exchange gain

- 93

Rental income

267

365

- 27

Interest income

302

423

- 29

Depreciation on plant and equipment

(37)

(43)

- 14

n/m = not meaningful

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		2009	2008

	Basic earnings per share*

	Profit attributable to shareholders (US$'000)		1,388	5,014

	Weighted average number of ordinary shares in issue ('000)		369,986	369,986

	Basic earnings per share (US¢)		0.38	1.36


	* Diluted EPS is the same as basic EPS, as there were no outstanding share options.


5	Group borrowings

			Group
			At	At
			31.3.2009	31.3.2008
			US$'000	US$'000

	Borrowings due within one year
		- unsecured	-	9,034
		- secured	22,069	5,837
			22,069	14,871

	Borrowings due after one year
		- unsecured	42,757	45,170
		- secured	197,981	253,072
			240,738	298,242

			262,807	313,113

	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 2009 was US$277.5 million (31 December 2008: US$296.6 million).

6	Interested person transactions
		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$100,000)
	Name of interested person
			US$'000		US$'000

	Three months ended 31 March 2009
	Jardine Matheson Limited
	- Internal audit fee		-		69



7	Issue of shares

	There have been no changes in the issued share capital of the Company since 31 December 2008.

	There are no outstanding convertibles issued or treasury shares held by the Company as at 31 March 2009.

	The total number of issued share capital (excluding treasury shares) as at 31 March 2009 and 31 December 2008 was 369,985,977.



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 2009 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 2009 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

END

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