Weak performance in China leads to a 48% drop in net profit for GuocoLand in the second half of the year | Lianhe Zaobao
GuocoLand's net profit for the second half of the fiscal year as of the end of June fell 48% year-on-year to 32.43 million yuan, with earnings per share decreasing 47% to 2.56 cents. Despite strong performance in Singapore, with revenue increasing 20% year-on-year to 906.34 million yuan, weak performance in China led to a 17% year-on-year decline in the company's annual net profit. The board of directors proposed a final dividend of 7 cents per share. Following the earnings release, GuocoLand's stock price fell 1% to 1.86 yuan
Despite strong performance in Singapore, the business in China was weak. GuocoLand's net profit for the second half of the fiscal year ending June fell 48% year-on-year to HKD 32.43 million, with earnings per share decreasing 47% to HKD 2.56. The board has proposed a final dividend of HKD 0.07 per share.
According to the performance report released by GuocoLand late Thursday (August 28), revenue for the second half of the fiscal year increased by 20% year-on-year to HKD 906.34 million.
After the earnings announcement, GuocoLand's stock price fell 1% to HKD 1.86 on Friday (29th).
The earnings announcement indicated that the strong performance of the two main businesses, real estate development and investment in Singapore, boosted revenue. However, the Chinese real estate industry faced headwinds, and provisions set aside for expected losses offset the good performance of the former.
For the full year, the company's net profit decreased by 17% year-on-year to HKD 107.05 million, while revenue increased by 5% to HKD 1.9164 billion. Earnings per share decreased by 15% year-on-year to HKD 8.43.
Singapore Market Remains the Main Driver
In terms of individual business performance, real estate development saw a slight year-on-year revenue increase of 3% to HKD 1.56 billion, mainly supported by stable sales from residential projects in Singapore. Real estate investment performed even better, with revenue growth of 22% to HKD 281 million, due to increased rental income from Guoco Tower and Guoco Midtown.
Further Reading
Springleaf Residence Launches Hot Sales 92% Analysis: May Drive Bidding in Nearby Areas GuocoLand Secures HKD 600 Million Green Financing to Issue HKD 120 Million Perpetual Securities with a Coupon Rate of 4.35% The Singapore market remains the main driver for GuocoLand in the fiscal year 2025, with the combined revenue from its development and investment businesses reaching SGD 1.52 billion, accounting for 80% of total revenue.
GuocoLand President Cheng Hsin-Yao stated in a press release, "Despite the general uncertainty in the macro economy, our dual engines of real estate development and investment in Singapore have driven strong performance for the fiscal year 2025. We expect our Singapore business to remain resilient in the future."
The company proposed a final dividend of 7 cents, which will be ex-dividend on November 4 and paid on the 19th.
The press release noted that 76% of GuocoLand's asset portfolio consists of high-quality residential projects in Singapore and premium real estate investments.
The company's loans are supported by a range of high-quality real estate investments with regular rental income, as well as development projects with solid sales progress. The debt-to-asset ratio for this fiscal year is 0.44 times, slightly higher than last fiscal year's 0.43 times.
In terms of cash flow, the company's operating activities generated a net cash of SGD 208 million in the fiscal year 2025, down from SGD 472 million in the previous fiscal year, as this year's sales revenue was used to acquire a residential land plot. Investment net cash outflow was SGD 36.4 million, as the company used cash returns from joint venture residential projects to increase real estate investments. Financing-related activities utilized a net cash of SGD 390.4 million, mainly for repaying loans, redeeming perpetual securities, and paying interest and dividends
