Complete Property Market Updates of Singapore

June 10, 2008

Parkway earnings dip in absence of one-time items

Filed under: General — Propertymarketupdates @ 4:36 am

PARKWAY Holdings yesterday said that its Q1 2008 net profit fell 13 per cent to $18.5 million from $21.4 million.

This was despite revenue rising 19 per cent to $228.7 million from 192.7 million in the year-ago period. Earnings per share fell to 2.41 cents from 2.78 cents.

The fall in earnings was due partly to a 26 per cent rise in staff costs to $72.3 million plus $11.9 million paid out in Reit rental expense. Last August, Parkway had spun off its interests in its Singapore hospitals to Parkway Life, its real estate investment trust.

The company said net profit would have risen 9 per cent if one-off items last year were excluded. Parkway had in the year-ago period booked a $2.85 million gain on disposal of investments and properties, plus $2.68 million in writeback of a deferred tax liability after a cut in corporate tax rates.

Parkway yesterday also gave more details on the progress of its billion-dollar hospital development project in Novena, which set a record for land purchase price earlier this year. It said the 350-bed hospital project ‘is on track and we look forward to commencing piling works by the year-end’.

Parkway paid a quarter of the $1.3 billion price in March and the remaining 75 per cent is due next Tuesday. The company said that it will be financing the $1 billion payment by drawing down existing credit facilities, plus a bridge loan of $700 million, adding that it accepted last Friday the terms of a commitment letter extended by a group of banks to lend it $850 million to finance the project.

As at March 31, Parkway’s total secured and unsecured borrowings stood at over $550 million. It added that it will strengthen its balance sheet and cash position through a $785.7 million rights issue to be completed in June.

Parkway shares closed at $3.39 yesterday, down 2 cents.

Source : Business Times – 15 May 2008

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