SPG Land posts record 678.5m yuan in earnings

PUBLISHED : Saturday, 06 March, 2010, 12:00am
UPDATED : Saturday, 06 March, 2010, 12:00am

Shanghai-based developer SPG Land (Holdings) posted its best ever profit last year as the real estate market staged a robust comeback lifted by record property prices.

The company, a high-end builder, said profit attributable to shareholders for the year to December rose 348 per cent to 678.52 million yuan (HK$771.55 million) from 151 million yuan a year earlier.

Turnover rose 120 per cent to 3.06 billion yuan, from 1.39 billion yuan a year earlier. It declared a final dividend of 5.5 fen and a bonus share for every 40 existing shares held by shareholders.

Chairman David Wang Weixian said the firm had secured 71 per cent of this year's targeted 4.4 billion yuan sales revenue. It sold more than 3.1 billion yuan worth of properties last year, but they were not yet completed and booked, he said. 'The revenue will be booked this financial year.'

Wang said he hoped to achieve contract sales of 9.1 billion yuan this year. Contract sales can be booked when they are completed and the client takes possession.

Managing director Stones Tse Sai-tung said the firm planned to acquire an extra 2.5 million square metres of gross floor area this year.

Last month, SPG Land bought two sites - which will provide 1.04 million square metres of gross floor area - in Wuxi for 4.95 billion yuan.

With cash reserves of 5.44 billion yuan, Tse said this year would provide acquisition opportunities because of Beijing's measures to cool the property market. The firm owns The Peninsula in Shanghai and plans to invest in a resort hotel which will include a golf course and residential villa development in Huangshan in Anhui province.

Tse said the cost of the land, which will produce more than one million square metres, is 100 yuan per square metre. The firm would release 50,000 square metres of residential space from the Huangshan project for pre-sale next year at an estimated price of 12,000 yuan per square metre, he said. 'This project will provide an astronomical gross profit margin.'