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DBS Land Group Performance For 1999

Singapore, 29 February, 2000

DBS Land Makes Stunning Turnaround With Pre-Tax Profits of $335 Million. Group To Press On With Restructuring Of Its Business And Will Unveil Its Internet Strategies Next Month

DBS Land today announced a Group pre-tax profit of $335 million for 1999 - a stunning turnaround from the loss of $194.4 million in 1998.

And reaffirming that it is business as usual despite the emergence of Pidemco Land as a major shareholder last week, DBS Land said that it will unveil by the end of next month strategies to tap the internet revolution as a new area of growth.

Speaking to journalists and analysts at a briefing today, Deputy Chairman and Group Chief Executive Officer, Dr Han Cheng Fong said that the group is well poised for growth - following the restructuring of its business - which is expected to gain momentum this year.

The group has been divesting out of lower yielding investment properties to focus on property development in Singapore, Australia and China, as well as high service content business, and todate, has securitised three office buildings amounting to some $1.3 billion.

1999 has been a watershed year for the group. We had set out earlier last year to restructure our business, and this we did, successfully and ahead of schedule.

As a Group, we are possibly stronger than we were ever before. Our balance sheet looks good and our gearing is healthy. Our strategies to create value and growth for our shareholders are fundamentally sound. And we are ready to tap on the new opportunities created by the internet revolution and move ahead in the dot.com age.

"There is no reason why we should not press on as planned, and we have not changed our strategies",he said.

The turnaround in DBS Land's performance came on the back of improved sales of residential units in Singapore following rebound of the property market last year, a full year's contribution from Plaza Singapura which reopened in December 1998, and higher profits from its subsidiary Australand.

In addition, a $71.7 million writeback against provisions made last year helped to boost its bottomline. Before the write-back, Group pre-tax profit was $262.9 million, a 14 per cent improvement over 1998's $230.7 million.

The Group also benefited from lower interest expenses last year. Thanks to the lower interest environment which prevailed last year and a reduction in its borrowings through proceeds from its rights issue, the securitisation of three office buildings and the sale of other properties, its interest expenses dropped by some $38 million in 1999.

Other highlights of the results:

- Turnover dropped marginally by 2.6 per cent despite a higher level of business activities in 1999. This was due primarily to a reduction in turnover from the hotel and serviced residence segments resulting from the Raffles Holdings and Stamford Groups ceasing to be subsidiaries of the Group with effect from 1 July and 1 November respectively.
- Share of profits from associated companies increased by $16 million to nearly $29 million.
- Provisions for tax amounted to $85.8 million, up from $9.9 million in 1998.
- A net extraordinary loss of $22.5 million was incurred by the group. This was due mainly to the loss on issue of Raffles Holdings IPO shares at 15 per cent discount.
- Profit at the attributable level amounted to $187.9 million, a reversal of the $268.8 million loss in 1998.
- Net tangible assets per share has improved from $2.84 at the end of 1998 to $2.92 last December.

DBS Land is a leading property group based in Singapore with operations in 10 other countries. Listed on the Singapore Exchange Ltd, it has total assets of $7.5 billion.


Issued by DBS Land Ltd


The Board of Directors of DBS Land Ltd wishes to announce that the unaudited results of the DBS Land Group for the year ended 31 December 1999 are as follows :

1) UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 1999

5) REVIEW OF RESULTS

The year 1999 saw a turnaround in performance of the Group from losses in 1998 to pre-tax and after tax profits before extraordinary items of $334.6 million and $210.4 million respectively. After taking into account extraordinary losses of $22.5 million, profit at the attributable level amounted to $187.9 million.

Earnings of the Group in 1999 were underpinned by progressive profit recognition from properties sold earlier and new sales of the Group's other development projects like Melrose Park and Pebble Bay following rebound of the residential property market.

Higher profits also came from the Australand Group and a full year contribution from Plaza Singapura which re-opened in December 1998 after its refurbishment.

Group performance was boosted by the partial writeback of provisions made in 1998. Before the writeback amounting to $71.7 million, Group pre-tax profit was $262.9 million, an improvement of 14% over the corresponding figure before provision in 1998.

The Group also benefited from lower interest expenses which decreased substantially by $38 million or 19% due to the low interest rate environment which prevailed throughout 1999 as well as reduction in borrowings via proceeds from DBS Land?s rights issue, securitisation of three office buildings and sale of other properties.

Despite the higher level of business activities in 1999, the turnover of the Group dropped marginally by 2.6%. This was due primarily to a reduction in turnover from the hotel and serviced residence segments as a result of the Raffles Holdings Group and the Stamford Group ceasing to be subsidiaries of the DBS Land Group with effect from 1 July 1999 and 1 November 1999 respectively.

The Group ended the year with a substantial reduction in borrowings by 26% to $2.5 billion, arising from funds raised through the rights issue and securitisation of three office buildings. It also had more than $500 million in fixed deposits and cash at the end of 1999, pending deployment. Consequently, the debt equity ratio of the Group dropped from 1.15 to 0.5 as at the end of 1998 and 1999 respectively.

The Group's net tangible assets per share improved from $2.84 at 31 December 1998 to $2.92 at 31 December 1999.

6) PROSPECTS

In Singapore, the Group will continue to derive its main source of profits from development projects and investment properties in year 2000. Temporary occupation permits for Melrose Park and Glendale Park are expected to be obtained this year. The Group intends to launch three new residential projects progressively starting from the second quarter of this year, with plans for another two if market conditions are favourable.

In Australia, Australand's earnings will be further enhanced following the acquisition in January 2000 of Walker Corporation, whose strength in the industrial development business as well as medium and high density residential projects will supplement and broaden Australand's profit generation base.

The Group's other businesses, through its listed associates, namely, Raffles Holdings and The Ascott are also expected to show improved profitability for the current year as a result of the upturn in the region's economies and the substantial efforts put in to restructure and strengthen the business operations of both groups.

Barring unforeseen circumstances, Directors expect the results of the Group for the current year to be satisfactory.

7) DIVIDEND

The Directors are recommending a gross Final Dividend of 4.966 cents per S$1.00 ordinary share (1998: 3 cents per S$1.00 ordinary share) less Singapore income tax of 25.5%, in respect of the financial year ended 31 December 1999 amounting to approximately S$48.2 million (1998 : S$22.4 million) for the year . Subject to shareholders' approval at the Annual General Meeting to be held on 6 May 2000, the dividends will be paid on 29 May 2000.

8) CLOSURE OF BOOKS

NOTICE IS HEREBY GIVEN that subject to shareholders' approval of the payment of the aforementioned dividends at the Annual General Meeting to be held on 6 May 2000, the SHARE TRANSFER BOOKS and REGISTER OF MEMBERS of the Company will be closed from 15 May 2000 to 17 May 2000, both dates inclusive. Duly completed transfers received by the Company's Registrar, Lim Associates (Pte) Ltd, 10 Collyer Quay, #19-08 Ocean Building, Singapore 049315, up to 5.00 p.m. on 12 May 2000 will be registered to determine shareholders entitlement to the proposed ordinary dividend. In respect of ordinary shares in securities accounts with The Central Depository (Pte) Limited (CDP), the final dividend will be paid by the Company to CDP which will in turn distribute dividend entitlements to shareholders.

BY ORDER OF THE BOARD