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

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GuocoLand reported a 60% year-on-year rise in revenue for FY2023, totalling $1.54 billion for the 12 months to June 30. For 2H2023, the Group’s revenue increased even further, by 72% to $882.9 million. The higher property development revenue for both 2H 2023 and FY2023 was mainly attributed to strong sales of Meyer Mansion, Midtown Modern and Lentor Modern, as well as contributions from Chongqing GuocoLand 18T.

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Revenue from investment properties also grew substantially, increasing 43% year-on-year to $94.8 million in 2H2023 and 35% to $169.6 million in FY2023. This was supported by higher recurring rental income from Guoco Tower, Shanghai’s Guoco Changfeng City South Tower, and the initial contribution from Guoco Midtown Office. Revenue from the hotel investments also grew substantially, doubling to $68.7 million in FY2023 from a 47% year-on-year increase to $33.4 million in 2H2023.

Unfortunately, an impairment loss of $46.9 million and a 59% y-o-y rise in interest cost to $149.7 million caused net profit to fall by 44% year-on-year to $268.8 million. The impairment loss was attributed to an investment in EcoWorld International in 2H2023, due to adverse conditions in the UK. Furthermore, net profit fell by 55% to $187.4 million during the period.

However, GuocoLand recorded fair value gains of $156.3 million in FY2023, mainly from Guoco Tower and Guoco Midtown. After excluding the one-off $79.3 million fair value gain recognised under cost of sales during 2H2022, the Group’s gross profit for 2HFY2023 would’ve grown by 50% y-o-y and by 34% y-o-y in FY2023.

The Group’s board declared a final dividend of 6 cents per share.

To conclude, GuocoLand’s strong financial performance for FY2023 was largely attributed to its property development and investment activities, with higher progressive recognition of sales from Meyer Mansion, Midtown Modern and Lentor Modern, and higher recurring rental income from Guoco Tower amongst others. Additionally, fair value gains from Guoco Tower and Guoco Midtown also supported the Group’s revenue.