Posted on April 19, 2011 09:51:37 PM [ BusinessWorld Online ]
DEVELOPER SHANG Properties, Inc. recorded a decline in profits last year after condominium sales and rental revenues fell by nearly a third, a financial report issued yesterday showed.
The listed real estate arm of Malaysia’s Kuok Group saw profits drop by 14.6% to P1 billion last year.
This reversed a net income growth of 33% to P1.17 billion in 2009.
“The decrease of P170.3 million [in net income] was mainly due to lower sales of condominium units and lower gain on fair value of investments recognized in 2010 from P180.6 million in 2009 to P65.8 million,” Shang Properties said in its financial report.
Sales turnover -- which consists of rental revenue, condominium sales, interest income and other income -- sank by 30.6% to P2.8 billion from P4.03 billion in 2009.
“The decrease was mainly due to lower sales turnout of the St. Francis Shangri-La Place this year of P600 million, from the previous year’s P1.8 billion,” Shang Properties said.
“This project is already at its final stages of completion and 94% of its condominium units were sold as of end-2009,” it added.
But Shangri-La Plaza’s revenue of P893.9 million jumped from the previous year’s P845.9 million due to rental escalation and the continuing growth of tenants’ sales.
Meanwhile, operating expenses declined by P960.9 million or 50.8% to P900 million in 2010.
Shang Properties said there was a “decrease in cost of condominium sales of The St. Francis Shangri-La Place due to the combined effect of lower sales turnout,” among other things.
Earlier this month, Shang Properties bought buildings and lots from a Phinma Corp. unit for P615 million.
Shares in Shang Properties, a property development, real estate management and investment holding company which was incorporated in 1987 as Shangri-La Properties, Inc., were unchanged at P1.82 each yesterday. -- Neil Jerome C. Morales
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