GuocoLand reports 60% rise in revenue for FY2023, but 44% fall in net profit

For the financial year ended June 30, GuocoLand reported a significant year-on-year increase in revenue of $1.54 billion – a 60% rise from the previous year. In the well-performing second half of the Financial Year, revenue for the Group rose by 72% to $882.9 million.

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However, despite this positive growth, net profit dropped drastically during the same period, to the tune of 44% year-on-year, for a figure of $268.8 million. This was due to an impairment charge of $46.9 million, as well as an increase of 59% in interest expenses to $149.7 million. In the second half of the Financial Year, the decrease in net profit was even more drastic, at 55%.

The property group saw an impairment loss of $44.0 million upon their investment in EcoWorld International owing to challenging conditions in the UK. Consequently, other expenses for this period increased to $46.2 million and $46.9 million respectively for the second half and full Financial Year.

The sale of development properties contributed strongly to the Group’s overall revenue, with a 78% growth in the second half to $753.0 million, representing a 62% increase for the full Financial Year. Contributing to this impressive rise was Meyer Mansion, Midtown Modern and Lentor Modern, which have been substantially sold, as well as the Chongqing GuocoLand 18T residential tower.

In terms of investment properties, revenue increased by 43% year-on-year to $94.8 million in the second half, and by a further 35% to $169.6 million for the full Financial Year. This was due to higher recurring rental income from sources such as Guoco Tower, Shanghai’s Guoco Changfeng City South Tower and the newly operational Guoco Midtown Office.

The Group’s hotel investments also saw a 47% year-on-year increase in revenue in 2H2023, averaging a doubling of revenue to $68.7 million for the full Financial Year.

Gross profit for FY2023 increased by 5%, though it decreased marginally for 2H2023. This can be attributed to a missing one-off $79.3 million fair value gain which was recognised in the cost of sales during 2H2022. Factoring out this gain, the Group saw impressive 50% and 34% increases in gross profit for 2HFY2023 and FY2023 respectively.

Meanwhile, fair value gains of $156.3 million, largely attributable to integrated developments Guoco Tower and Guoco Midtown, were recorded for FY2023.

The company’s Board of Directors moved to announce a final dividend of 6 cents per share.

The strong performance of GuocoLand in FY2023 has been hugely impressive. Through resilient market conditions, the Group has managed to secure significant growth and demonstrate their financial ability to weather the storm.