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MCL Land Third Quarter Financial Statements

6th Nov 2009 09:20

RNS Number : 0838C

Hongkong Land Hldgs Ld

06 November 2009

MCL Land Limited

Third 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
G M Brown	(852) 2842 8138

GolinHarris
Sue So	(852) 2501 7984

6th November 2009

MCL LAND LIMITED

THIRD QUARTER 2009 FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT

Highlights

·; Profit attributable to shareholders US$134 million

·; Completion of The Fernhill, Tierra Vue and Hillcrest Villa

·; 87% of the units in The Peak@Balmeg sold

"The completion of three development projects in the first nine months of the year will produce a good full-year performance and the strong cash flows generated will enhance further the Group's financial position."

Y K Pang, Chairman

6th November 2009

Group Results

	Nine months ended 30th September
	2009	2008	Change	2009	Change
	US$m	US$m	%	S$m	%
Revenue	421.8	78.8	435	602.4	435
Profit before tax	161.6	25.0	n/m	230.3	n/m
Profit attributable to shareholders	134.5	21.5	n/m	191.8	n/m
	US¢	US¢		S¢
Earnings per share	36.35	5.81	n/m	51.83	n/m
	At 30.9.2009	At 31.12.2008	Change	At 30.9.2009	Change
	US$m	US$m	%	S$m	%
Shareholders' funds	509.7	393.9	29	721.3	27
	US$	US$		S$
Net asset value per share	1.38	1.06	30	1.95	27

n/m = not meaningful

The exchange rate of US$1=S$1.42 (31.12.2008: US$1=S$1.44) was used for translating assets and liabilities at the balance sheet date and average monthly transaction rate of US$1=S$1.47 (2008: US$1=S$1.39) was used for translating the results for the financial period.

The financial results for the nine months ended 30th September 2009 and 30th September 2008 have been prepared based on the International Financial Reporting Standards ("IFRS"). The financial results for 30th September 2009 have not been audited or reviewed by the Auditors.

Overview

The Singapore residential property market continued to improve as sales activity increased in the third quarter of 2009. Prices increased strongly during the period and 5,578 new homes were sold, an increase of 20% from the second quarter. This brought the number of new homes sold in the first nine months of the year to 12,828. The increased activity primarily reflected strong demand for units in mid and mass market developments.

Group Performance

MCL Land recorded revenue of US$422 million in the first nine months of 2009, primarily due to the recognition of sales on the completion of The Fernhill, Tierra Vue and Hillcrest Villa. The revenue of US$79 million in the corresponding period of 2008 arose on the completion of Mera Springs. Net profit for the first nine months of 2009 was US$134 million, compared with US$21 million in 2008. Hillcrest Villa contributed revenue of US$277 million and a net profit of US$101 million in the third quarter of 2009.

Shareholders' funds were US$510 million at the end of September 2009, up from US$394 million at 31st December 2008 following the payment in May 2009 of a one-tier first and final dividend for 2008 of US$25 million. The Group's net debt and net gearing at 30th September 2009 were US$85 million and 17%, respectively, compared with US$181 million and 46% at the end of 2008.

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

Properties

No new development projects were launched by the Group during the period under review. At the end of September 2009, pre-sales had reached 38% at D'Pavilion, a 50-unit apartment development at Upper Serangoon Road, and 87% at The Peak@Balmeg, a 180-unit condominium development at Balmeg Road. Waterfall Gardens which is scheduled to complete in 2010 is fully pre-sold, as were all but two of the units at Hillcrest Villa.

Hillcrest Villa completed in September 2009 and the results for the period reflect the contribution from 146 units of the 161 units sold. The contribution from the remaining 15 units which have been pre-sold is expected in the fourth quarter. If the results from these additional units had been included, the revenue for the period would have been US$30 million higher and the profit US$12 million higher. The Fernhill and Tierra Vue were completed in the first quarter and second quarter of the year, respectively, and together contributed a net profit of US$39 million.

Construction of the Group's development projects is progressing well. 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 sq. m. that are at various stages of planning approval.

The Group's joint venture developments in Malaysia continued to perform satisfactorily. Phase 1 of Riana Green was 99% pre-sold at 30th September 2009. Sales of Seremban Forest Heights, the joint venture development in Seremban, continued with 168 of the 270 terrace houses, bungalows, bungalow lots and shop offices pre-sold.

Wangsa Walk in Kuala Lumpur, a retail mall development by the Group's joint venture company, MSL Properties, was completed and opened in August 2009. It has a net lettable area of 25,000 sq. m. of which 92% has been leased.

Prospects

The completion of three development projects in the first nine months of the year will produce a good full-year performance and the strong cash flows generated will enhance further the Group's financial position.

Y K Pang

Chairman

6th November 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 nine months ended 30th September 2009 to be false or misleading in any material respect.

On behalf of the Directors

Y K Pang

Chairman

Hassan Abas

Director

6th November 2009

MCL Land Limited
Consolidated Profit and Loss Account
			Three months ended				Nine months ended
			30.9.2009	30.9.2008	Change		30.9.2009	30.9.2008	Change
		Note	US$'000	US$'000	%		US$'000	US$'000	%


Revenue			277,680	78,072		256	421,783	78,790		435
Cost of sales			(155,621)	(57,542)		170	(253,066)	(57,542)		340
Gross profit			122,059	20,530		495	168,717	21,248		n/m

Other operating income			196	274	-	28	911	3,892	-	77
Property related expenses			(900)	(1,610)	-	44	(1,242)	(2,139)	-	42
Administrative expenses			(3,785)	(1,017)		272	(5,888)	(2,648)		122
Share of joint ventures' results			(309)	(1,377)	-	78	(885)	4,695		n/m
Profit before tax		2	117,261	16,800		n/m	161,613	25,048		n/m


Tax		3	(20,855)	(3,516)		493	(27,125)	(3,566)		n/m

Profit after tax attributable to
	shareholders		96,406	13,284		n/m	134,488	21,482		n/m



			US¢	US¢		%	US¢	US¢		%
Earnings per share ("EPS")
	attributable to shareholders
	- basic and diluted*	4	26.06	3.59		n/m	36.35	5.81		n/m

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 30th September

Consolidated Statement of Comprehensive Income for the three months ended 30th September

		2009		2008
		US$'000		US$'000

Profit after tax		96,406		13,284
Translation difference		9,551		(25,634)

Total comprehensive income/(loss) attributable to shareholders		105,957		(12,350)

Consolidated Statement of Changes in Equity for the three months ended 30th September

	Attributable to shareholders
	Share	Translation	Retained	Total
	capital	reserve	earnings	equity
	US$'000	US$'000	US$'000	US$'000
2009
Balance at 1st July	276,657	106,605	20,498	403,760
Comprehensive income for the financial period	-	9,551	96,406	105,957
Balance at 30th September	276,657	116,156	116,904	509,717

2008
Balance at 1st July	276,657	135,978	123,395	536,030
Comprehensive (loss)/income for the financial period	-	(25,634)	13,284	(12,350)
Balance at 30th September	276,657	110,344	136,679	523,680

MCL Land Limited
Consolidated Statements of Comprehensive Income and Changes in Equity
for the nine months ended 30th September

Consolidated Statement of Comprehensive Income for the nine months ended 30th September
		2009		2008
		US$'000		US$'000

Profit after tax		134,488		21,482
Translation difference		6,773		5,116
Total comprehensive income attributable to shareholders		141,261		26,598

Consolidated Statement of Changes in Equity for the nine months ended 30th September

	Attributable to shareholders
	Share	Translation	Retained	Total
	capital	reserve	earnings	equity
	US$'000	US$'000	US$'000	US$'000
2009
Balance at 1st January	276,657	109,383	7,909	393,949
Comprehensive income for the financial period	-	6,773	134,488	141,261
Dividend	-	-	(25,493)	(25,493)
Balance at 30th September	276,657	116,156	116,904	509,717

2008
Balance at 1st January	276,657	105,228	142,288	524,173
Comprehensive income for the financial period	-	5,116	21,482	26,598
Dividend	-	-	(27,091)	(27,091)
Balance at 30th September	276,657	110,344	136,679	523,680

MCL Land Limited
Consolidated Balance Sheet

		At	At
		30.9.2009	31.12.2008
	Note	US$'000	US$'000
Non-current assets 1
Plant and equipment		134	212
Investment properties		16,017	15,985
Investments in joint ventures		33,266	34,739
Deferred tax assets		647	874
		50,064	51,810
Current assets 2
Development properties for sale		535,115	683,534
Amounts owing by joint ventures		65,177	62,018
Debtors and prepayments		177,952	80,797
Bank balances		116,649	131,800
		894,893	958,149
Total assets		944,957	1,009,959

Non-current liabilities 3
Borrowings	5	201,285	298,242
Deferred tax liabilities		464	459
Creditors		1,072	-
Retention money payable		5,110	7,137
		207,931	305,838
Current liabilities 4
Borrowings	5	-	14,871
Amounts owing to joint venture		466	459
Creditors		198,166	277,437
Current tax liabilities		28,677	17,405
		227,309	310,172
Total liabilities		435,240	616,010
Net assets		509,717	393,949

Equity:
Share capital and reserves
Share capital		276,657	276,657
Translation reserve		116,156	109,383
Retained earnings		116,904	7,909
Shareholders' funds		509,717	393,949
Net asset value per share		US$1.38	US$1.06

Explanatory notes on material variances:
1	The decrease in non-current assets at 30.9.2009 as compared to 31.12.2008 is mainly due to the loss incurred from the Group's joint ventures.
2	The decrease in current assets is mainly due to recognition of the cost of development properties for sale in the profit and loss account upon the projects' completion during the current period. In addition, bank balances decreased as a result of repayment of the Group's borrowings. This is partially offset by the higher debtors and prepayments for progress billings upon the projects' completion during the current period.
3	The lower non-current liabilities at 30.9.2009 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 development properties.
4	The lower current liabilities at 30.9.2009 as compared to 31.12.2008 is mainly due to repayment of short-term bank loans during the period from progress billings collected and recognition of revenue in the profit and loss account upon the projects' completion during the current period. This is partially offset by higher provision of income tax for the Group's taxable profit.

MCL Land Limited
Company Balance Sheet

	At	At
	30.9.2009	31.12.2008
	US$'000	US$'000
Non-current assets
Plant and equipment	114	182
Interests in subsidiaries	57,077	58,909
Investments in joint ventures	28,242	27,773
	85,433	86,864
Current assets
Amounts owing by subsidiaries	285,360	353,289
Amounts owing by joint ventures	65,177	62,018
Debtors and prepayments	302	280
Bank balances	64,697	70,916
	415,536	486,503

Total assets	500,969	573,367

Non-current liability
Borrowings	45,933	45,170

Current liabilities
Borrowings	-	9,034
Amounts owing to subsidiaries	82,692	35,564
Amounts owing to joint venture	466	459
Creditors	4,064	3,336
Current tax liabilities	139	2,284
	87,361	50,677
Total liabilities	133,294	95,847

Net assets	367,675	477,520

Equity:
Share capital and reserves
Share capital	276,657	276,657
Translation reserve	99,114	96,048
(Accumulated loss)/Retained earnings	(8,096)	104,815
Shareholders' funds	367,675	477,520

Net asset value per share	US$0.99	US$1.29

MCL Land Limited
Company Statements of Comprehensive Income and Changes in Equity
for the three months ended 30th September

Company Statement of Comprehensive Income for the three months ended 30th September

		2009		2008
		US$'000		US$'000

Loss after tax		(12,672)		(610)
Translation difference		8,945		(21,792)
Total comprehensive loss attributable to shareholders		(3,727)		(22,402)

Company Statement of Changes in Equity for the three months ended 30th September

	Attributable to shareholders
			(Accumulated
	Share	Translation	loss)/Retained	Total
	capital	reserve	earnings	equity
	US$'000	US$'000	US$'000	US$'000
2009
Balance at 1st July	276,657	90,169	4,576	371,402
Comprehensive income/(loss) for the financial period	-	8,945	(12,672)	(3,727)
Balance at 30th September	276,657	99,114	(8,096)	367,675

2008
Balance at 1st July	276,657	120,545	60,750	457,952
Comprehensive loss for the financial period	-	(21,792)	(610)	(22,402)
Balance at 30th September	276,657	98,753	60,140	435,550

MCL Land Limited
Company Statements of Comprehensive Income and Changes in Equity
for the three months ended 30th September
Company Statement of Comprehensive Income for the nine months ended 30th September

		2009		2008
		US$'000		US$'000

(Loss)/Profit after tax		(87,418)		2,277

Translation difference		3,066		5,392

Total comprehensive (loss)/income attributable to shareholders		(84,352)		7,669

Company Statement of Changes in Equity for the nine months ended 30th September

	Attributable to shareholders
			(Accumulated
	Share	Translation	loss)/Retained	Total
	capital	reserve	earnings	equity
	US$'000	US$'000	US$'000	US$'000

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

Comprehensive income/(loss) for the financial period	-	3,066	(87,418)	(84,352)

Dividend	-	-	(25,493)	(25,493)

Balance at 30th September	276,657	99,114	(8,096)	367,675

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

Comprehensive income for the financial period	-	5,392	2,277	7,669

Dividend	-	-	(27,091)	(27,091)

Balance at 30th September	276,657	98,753	60,140	435,550

MCL Land Limited
Consolidated Statement of Cash Flows

		Three months ended		Nine months ended
		30.9.2009	30.9.2008	30.9.2009	30.9.2008
		US$'000	US$'000	US$'000	US$'000

Profit before tax		117,261	16,800	161,613	25,048
Non-cash items
	Interest income	(177)	(241)	(722)	(1,051)
	Share of joint ventures' results	309	1,377	885	(4,695)
	Depreciation	26	41	98	127
	Loss on disposal of plant and equipment	-	-	1	-
	Unrealised translation gain	(2)	(4)	(4)	(13)
		156	1,173	258	(5,632)
Operating profit before working capital changes		117,417	17,973	161,871	19,416

Changes in working capital
	Development properties for sale	116,339	(10,139)	164,370	(287,967)
	Amounts owing by joint ventures	(785)	2,012	(897)	41,708
	Debtors and prepayments	(121,780)	(40,704)	(97,077)	103,509
	Creditors	(87,879)	3,465	(86,776)	48,345
		(94,105)	(45,366)	(20,380)	(94,405)
Cash flows generated from/(used in) operations		23,312	(27,393)	141,491	(74,989)

	Interest paid	(1,295)	(2,056)	(4,099)	(6,489)
	Interest received	175	250	732	1,096
	Income tax paid	(7,589)	(4,922)	(15,723)	(11,721)
		(8,709)	(6,728)	(19,090)	(17,114)
	Net cash flows generated from/(used in) operating activities 5	14,603	(34,121)	122,401	(92,103)

Cash flows from investing activities
	Purchase of plant and equipment	(16)	(6)	(22)	(16)
	Net proceeds from sale of plant and equipment	-	1	-	1
	Net cash flows used in investing activities	(16)	(5)	(22)	(15)

Cash flows from financing activities
	Drawdown of loans	5,615	55,324	57,269	262,192
	Repayment of loans	(80,150)	(23,904)	(170,489)	(164,383)
	Dividend paid	-	-	(25,493)	(27,091)
	Net cash flows (used in)/provided by financing activities 6	(74,535)	31,420	(138,713)	70,718

Net change in cash and cash equivalents		(59,948)	(2,706)	(16,334)	(21,400)
Cash and cash equivalents at the beginning of the
	financial period	173,200	65,118	131,800	78,419
Effect of exchange rate changes		3,397	(2,722)	1,183	2,671
Cash and cash equivalents at the end of the financial period		116,649	59,690	116,649	59,690

Explanatory notes on material variances:
5	The net cash flows generated from operating activities for the nine months ended 30th September 2009 relates mainly to progress billings collected from the Group's development properties.
6	The net cash flows used in financing activities for the nine months ended 30th September 2009 relates mainly to long-term bank loans repaid from the progress billings collected from the Group's development properties and dividend paid on 26th May 2009.

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 to the existing standards which are relevant to its operations shown below:

IAS 1 (Revised 2007)		Presentation of Financial Statements
IAS 23 (Revised 2007)		Borrowing Costs
Amendments to IFRS 1 and		Cost of an investment in Subsidiary, Jointly Controlled Entity or
	IAS 27	Associate
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
Improvements to IFRS (2008)		Amendments to IAS 1, 16, 19, 23, 27, 28, 36, 38, 39 and 40
The adoption of the above standards, amendments and interpretations did not have a material impact on the results of the Group.

2	Profit

			Group
			Three months ended				Nine months ended
			30.9.2009	30.9.2008		Change	30.9.2009	30.9.2008		Change
			US$'000	US$'000		%	US$'000	US$'000		%

	Profit before tax is determined
		after including:
	Net exchange (loss)/gain		(1)	-		n/m	(1)	12		n/m
	Rental income		265	303	-	13	810	1,021	-	21
	Interest income		177	241	-	27	722	1,051	-	31
	Depreciation on plant and equipment		(26)	(41)	-	37	(98)	(127)	-	23
	Loss on disposal of plant and equipment		-	-		n/m	(1)	-		n/m

	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
			Three months ended		Nine months ended
			30.9.2009	30.9.2008	30.9.2009	30.9.2008

	Basic earnings per share*

	Profit attributable to shareholders (US$'000)		96,406	13,284	134,488	21,482
	Weighted average number of ordinary shares
		in issue ('000)	369,986	369,986	369,986	369,986

	Basic earnings per share (US¢)		26.06	3.59	36.35	5.81

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

5	Group borrowings

					Group
					At	At
					30.9.2009	31.12.2008
					US$'000	US$'000
	Borrowings due within one year
		- unsecured			-	9,034
		- secured			-	5,837
					-	14,871
	Borrowings due after one year
		- unsecured			45,933	45,170
		- secured			155,352	253,072
					201,285	298,242

					201,285	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 30th September 2009 was US$345.4 million (31st 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
	30th September 2009

	Jardine Matheson Limited
	- Internal audit fee		-		13

	Cycle & Carriage Industries Pte Limited
	- Sale of vehicle		-		71
	- Purchase of vehicle		-		223

	Nine months ended
	30th September 2009

	Jardine Matheson Limited
	- Internal audit fee		-		108

	Cycle & Carriage Industries Pte Limited
	- Sale of vehicle		-		71
	- Purchase of vehicle		-		223


7	Issue of shares

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

	There are no outstanding convertibles issued or treasury shares held by the Company as at 30th September 2009.

	The total number of issued share capital (excluding treasury shares) as at 30th September 2009 and 31st 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 30th September 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 nine months ended 30th September 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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