Roxy-Pacific profit up 39% to $21.9mln

Achieves 100% take-up rate for Haig 162 and 77% for Straits Residences in July 2010.

Roxy-Pacific Holdings Limited (“Roxy-Pacific” or the “Group”), a homegrown specialty property and hospitality group, on Wednesday announced a 39% increase in net profit to S$21.9 million for the first half ended June 30, 2010 (“H1FY2010”) from S$15.7 million in the previous corresponding period (“H1FY2009”). This increase was on the back of a 42% jump in revenue to S$116.3 million in H1FY2010, resulting mainly from a strong 50% rise in revenue to S$93.4 million from the Group’s Property Development segment.

Said Mr Teo Hong Lim, Executive Chairman and CEO of Roxy-Pacific: “We are very encouraged and pleased to have achieved a record first half performance, driven by higher revenue from all three segments of our business, signalling a strong recovery, in line with the economy, according to a Group's report.

“To date we are progressively recognising the revenues from the seven fully sold projects which were launched in 2008 and 2009. Out of our seven new projects to be launched from 2010, the 99-unit Haig 162 received a strong 100% take-up rate within two days of launch. In addition, our 30-unit Straits Residences located at Joo Chiat Place, which was soft launched on July 24 2010, has already seen a healthy 77% take-up. With the strong economic environment and riding on the resilience in the demand for homes, we intend to launch at least another two projects in 2010 from our existing landbank of seven plots of land for development.

The sales value from these new launches will further boost our strong attributable progress billings to be recognised to the amount of S$227.5 million. Going forward, we will continue to be prudent, leveraging on our strong cash position and possible JVs with reputable partners to grow our portfolio.”

Performance Review
The Group registered a 27% growth in revenue to S$55.4 million in 2QFY2010 from S$43.7 million in 2QFY2009. The improvement in turnover was a result of a 25% increase in revenue from its Property Development segment as well as a 145% surge in revenue from its Property Investment segment. The Group’s Hotel Ownership segment reported a 27% increase in revenue in 2QFY2010 due to an increase in both the average occupancy rate (“AOR”) and average room rate (“ARR”).

The 25% increase in revenue from the Group’s Property Development in 2QFY2010 to S$43.6 million was largely due to a higher percentage of recognition of revenue from development projects in the current quarter, due to the progress in construction of these projects. The Group recognised revenue from eight development projects namely, The Azzuro, The Verte, The Adara, The Ambrosia, The Florentine, Nova 48, Nova 88 and The Lucent in 2QFY2010. The Group has obtained TOP for one of its projects, The Adara, in June 2010. This segment contributed to 79% of total Group revenue in 2QFY2010.

The remaining 21% of the Group’s turnover in 2QFY2010 was attributable to the Group’s Hotel Ownership and Property Investment division. Revenue from the Hotel Ownership segment increased 27% to S$11.0 million in 2QFY2010. The hotel’s AOR improved from 81.6% in 2QFY2009 to 95.0% in 2QFY2010. Its ARR was also up 16% to S$166.2 in 2QFY2010 as compared to S$143.5 in 2QFY2009. Overall, the Group’s revenue per available room (“RevPar”) increased by 35% from S$117.1 in 2QFY2009 to S$157.8 in the current quarter.

Revenue from the Group’s Property Investment segment improved significantly by 145% for the current quarter compared to 2QFY2009. The increase was mainly due to the recognition of rental from Kovan Centre and increased rental yield from the renewal of leases for some of the Group’s shop units at Roxy Square.

Outlook
According to the Ministry of Trade and Industry’s announcement on 14 July 2010, the Singapore economy is expected to grow between 13 to 15 per cent in 2010 an upward revision from the earlier forecast of 7 to 9 per cent. In addition, based on latest statistics released by Urban Redevelopment Authority on July 23, 2010, overall prices of private residential properties have increased 5.3% in 2QFY2010 with sales of new homes at a robust figure of 4,033 units.

Added Mr Teo: “We will continue to exercise prudence as we explore and seize opportunities in the resilient property market. In addition to our focused strategy, as well as good track record in the property segment, the balance amount of attributable progress billings to be recognised of approximately S$227.5 million from our development projects is expected to contribute positively to our Group’s performance from the next quarter.”

The latest tourism statistics released by the Singapore Tourism Board shows that visitors to Singapore rose 26.7% in June 2010, logging the seventh straight month of record arrivals as the global economy continues to recover.

“As for our hotel business, we are positive that it will benefit from the favourable visitor upturn with both IRs now opened. We have already seen an improvement of both our hotel’s AOR and ARR in 2QFY2010 and are confident that demand for our hotel rooms should improve in 2010,” concluded Mr Teo.

Barring unforeseen circumstances, the directors expect the Group to be profitable in 2010.