PERFORMANCE OVERVIEW

Full year 2000 net profit after tax and minority interests was S$105.7 million, a 43.0% decline from profit of S$185.6 million in 1999. This was largely due to higher interest expense which increased by 61.0% to S$433.1 million (1999: S$268.9 million). The higher interest expense was mainly due to purchases of land in Singapore and new investments such as Hitachi Tower and Caltex House in Singapore and Furama site in Hong Kong. Furthermore, interest expense was charged out for properties which have attained temporary occupation permit ("TOP"), e.g., Finsbury in London, Starhub Centre in Singapore, and several Ascott Group projects.

The Group's operating profit before interest and tax was S$754.0 million, a 23.0% increase year-on-year. This increase was due to several factors including:

•		the sale of land rights in Phases 2 and 3 of Canary Riverside project amounting to S$103.9 million;
•		higher rental income from commercial properties, retail properties and serviced residences, all of which helped to offset the decline in residential development contribution.

The Group, however, recorded a loss after extraordinary items of S$287.0 million, compared with a profit of S$212.8 million in 1999. The S$392.7 million net extraordinary loss was mainly due to:

•		write-down of investment in Parkway Holdings and Vista Healthcare (S$195.8 million);
•		write-down of 3 overseas hotels (S$131.4 million); and
•		provisions made for decline in values of investment properties in Indonesia and China (S$83.2 million).

The extraordinary losses were partially reduced by gains totalling S$10.5 million on sale of investment properties and a share of Ascott's write-back in provisions and business closure costs of S$10.2 million.

TURNOVER

Group turnover for the year totalled S$2.9 billion, an increase of 4.9% over 1999 turnover of S$2.8 billion. Approximately 57.5%, or S$1.7 billion, was contributed by the Residential SBU. Other major contributors were Commercial SBU (15.2%), Raffles Holdings Group and RC Hotels Pte Ltd (15.1%) and Somerset Group (8.5%). All SBUs shown improvement over their 1999 turnover except for Residential SBU where the turnover decreased by 7.7%. This was mainly due to weak sales from Singapore residential projects partially offset by higher contribution from Australand.

In terms of geographical analysis, the Group turnover came mainly from Singapore 49.6%, Australia & New Zealand 35.1% and China/Hong Kong 7.8%. Although Singapore was still the Group's largest market, the Group has lessened its dependency on the local market by expanding overseas in countries such as China/Hong Kong and United Kingdom. The increased turnover from Australia due to the acquisition of Walker Corporation also helped to give the Group a broader geographical base. This can be seen by the fact that in the year before, Singapore sales made up a whopping 71.0% of Group revenue compared to 49.6% in 2000.