Guocoland Limited reported earnings of $22.9 million for the 1HFY2021 ended December, 69% lower than earnings of $74.5 million in 1HFY2020.

The lower earnings were mainly due to higher tax expense of $31.9 million arising from related taxes for the disposal of the cultural building within the Guoco Changfen City project in Shanghai, China.

The higher tax expense was offset by a 58% increase in other income to $25.2 million partly due to the fair value gain on derivative financial instruments and the completion of the disposal of Guoco Changfen City.

Revenue for the half-year period stood 44% y-o-y lower at $319.6 million mainly due to lower progressive recognition of sales from its Singapore residential projects.

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The construction of Martin Modern by Guocoland in District 9 is expected to achieve its temporary occupation permit (TOP) in 2021.

Revenue from the group’s investment properties remained stable y-o-y, though revenue from the group’s hotel business plunged by 75% y-o-y due to Covid-19.

Group profit margin (GPM) remained stable at 30% for the 1HFY2021.

Other expenses decreased by 93% y-o-y to $1.1 million due to the fair value gain on derivative financial instruments, compared to a fair value loss in the previous corresponding period.

Earnings per share (EPS) for the half-year period stood at 1.20 cents on a fully diluted basis, compared to 5.85 cents a year ago.

Cash and cash equivalents as at Dec 31, 2020, stood at $981.9 million.

Looking ahead, Guocoland notes that the Singapore residential market is expected to remain strong supported by low interest rates, optimism in the economy and long-term confidence in the market.

Demand for office space is expected to remain muted.

SEE: Guocoland appoints former Singhaiyi Deputy CEO Sim Chee Wah as Group CFO

China’s housing market is also expected to remain resilient in 2021 while Malaysia’s residential property market continues to struggle due to a large overhang of completed properties.

“Even as the Covid-19 pandemic continues to cast a shadow on our business, we remain focused on delivering our current pipeline of residential and integrated developments and boosting sales. We will also proactively manage our investment properties to optimise operational efficiency,” says Guocoland group president and CEO Raymond Choong.

“Despite the headwinds, we remain in a strong position to deploy our balance sheet towards strategic land acquisition opportunities. We will continue to leverage on our real estate expertise to develop properties that support future work and lifestyle trends while building our portfolio of recurring income for sustainable growth,” Choong adds.

Shares in Guocoland closed 2 cents lower or 1.3% down at $1.56 on Feb 4.