SINGAPORE (Nov 13): Property developer CWG International saw 3Q losses narrow to RMB25 million ($5 million) from RMB53.3 million a year ago on a surge in revenue over the quarter.

Revenue grew 63% to RMB193 million ($39.6 million) from RMB118.1 million a year ago, primarily due to an increase in the number of property units in Australia handed over to customers.

Revenue for the property units sold and recognised contributed to approximately 69% of total group revenue, which was mainly attributable to the sale of Uptown@Roseville in 3Q. The property’s location in Sydney, Australia, helped to boost overall average selling price (ASP) to RMB21,888 per sq m from RMB8,760 per sqm in 3Q16.

In spite of the increased ASP, aggregate gross floor area (GFA) sold and recognised over the quarter fell by approximately 50.4% to 5,819 sq m from 11,738 sq m in the previous year.

Overall the group recorded an improvement in its gross profit margin to 37.7% for 3Q17 compared to 37.1% in 3Q16.

Selling and distribution expenses fell 14% to RMB31.8 million from RMB37 million a year ago, due mainly to the decrease in marketing expenditure on newly-launched projects and marketing activities.

Meanwhile, administrative expenses increased 92% on-year to RMB50.7 million on higher headcount with the group’s expansion in business activities, in addition to mid-year bonuses which were paid for the first time this year.

“We have kept a tight control on our gearing while continuing to diversify our sources of funds, in particular to support our overseas operations. Of note, this quarter, we have kept our gearing ratio stable while continuing to chart a growth path within safe limits,” comments Chua Hwee Song, group CEO and executive director of CWG, on the latest set of results.

The group will also be changing its financial year to end-June, 2018, with a total of six quarters in FY2017/18 from Jan 1, 2017, to June 30, 2018.

“The change will enable us to improve the accuracy of our reported taxes and better plan our audit schedule with our auditors, enabling greater administrative efficiency and cost savings,” says Chua.

Shares in CWG closed 1.3% lower at 15 cents on Monday.

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