Keppel Land Limited March 2004
Highlights Company Profile Financial Results Operations Review Market Outlook - China -Thailand -Vietnam Going Forward 2
Corporate Profile Total assets of about $4.7 billion as at 31 December 2003 Established developer of quality housing and investment-grade properties Recognition for good corporate governance and transparency Geographically diversified in Asia, currently focusing in China, Thailand and Vietnam 3
Strategic Focus Taking advantage of regional economic growth, concentrate on two core businesses : Property development for sale in Asia Grow overseas earnings to 50% by 2005 (For FY03, overseas contribution made up 32% of group earnings before exceptional items) Property fund management (First closing of $180m for Asia No. 1 Property Fund in May 2003) Divest low-yielding investment properties and re-deploy resources into higher yielding core businesses and assets 4
Regional Country Focus Focus China, Thailand and Vietnam Selective land acquisition for immediate development for sale Active Hong Kong, India, Indonesia, Japan, S.Korea, Malaysia and Philippines Monitor markets for any future opportunities Monitor Australia and Myanmar Keep watching brief of the markets 5
Strong Commitment to Growth and Shareholder Value Profit contribution from overseas grew from 3% to 32% On track to achieve 50% earnings from overseas by 2005 D/E ratio lowered from 1.09 to 0.95 ROE improved to 8.5% 1999 2000 2001 2002 2003 ROE * 4.0 5.4 5.5 6.4 8.5 * before EI and provisions Earnings growth in the next few years from both Singapore and overseas 6
Corporate Transparency Awards Winner of Best Annual Report Award for the fifth consecutive year for FY2001 6th position among 285 listed companies in the Business Times Corporate Transparency Index for FY2002 Ranked 3rd of 180 Asian property companies in the Asia Pacific Transparency Study by NUS Runner-up for Most Transparent Company Award by SIAS 7
Awards for Properties Design Excellence Award for Caribbean @ Keppel Bay Gold Award in the Environment Category of Top 10 properties in Shanghai for One Park Avenue by HK s Da Gong Bao newspaper Fully-fitted Award for One Park Avenue by Shanghai s Municipal Government Best Luxury Serviced Apartment Award for Sedona Suites Hanoi for the second consecutive year Best Business Service Apartment for Sedona Suites HCMC Global accolades for Spring City Golf and Lake Resort, and Ria Bintan Golf Club 8
Financial Results 9
Financial Performance $m FY2003 FY2002 Change Turnover 678.8 299.0 127.0 EBITDA 141.6 134.6 5.2 Operating Profit 128.0 119.2 7.4 Pre-tax Profit 135.3 129.2 4.7 PATMI before EI 126.4 94.3 34.0 EI - Divestments - * (67.9) - EI - Write-down ^ (25.8) - - PATMI after EI 100.6 26.4 281.1 ^ Impairment charge in respect of the Group s hotels in Myanmar * $70.4m loss from sale of Capital Square, offset by $2.5m gain from sale of Bayswater Village % 10
Revaluation Deficit for Singapore Investment Buildings Attributable Book / Market Value ($m) As at 31 Dec 2002 1,694.1 Less : Revaluation Deficit 143.1 As at 31 Dec 2003 1,551.0 Deficit charged against capital reserves of $535m as at end- 2002 Revaluation deficit for investment buildings overall is 8.4% (9.2% for office buildings) 11
Key Ratios % Key Ratios FY2003 FY2002 Change EPS ( ) 14.2 3.7 283.8 NTA/Share ($) 2.09 2.09 0.0 Debt/Equity Ratio 0.95 1.09 (12.8) Annualised ROE * (%) 8.5 6.4 32.8 * Before EI 12
Net Profit - by Business Segment FY2003 FY2002 % Business Segment $m $m Change Property Investment 32.1 52.9 (39.3) Trading 103.3 49.9 107.0 Others Hotels / Resorts (14.3) (12.5) nm Property Services / Etc 5.3 4.0 32.5 PATMI before EI 126.4 94.3 34.0 EI - Divestments - * (67.9) - EI - Write-down ^ (25.8) - - PATMI after EI 100.6 26.4 281.1 ^ Impairment charge in respect of the Group s hotels in Myanmar * $70.4m loss from sale of Capital Square, offset by $2.5m gain from sale of Bayswater Village 13
Net Profit - by Geographical Location Geographical FY2003 FY2002 % Segment $m % $m % Change Singapore 86.5 68 91.7 97 (5.7) Other Countries 39.9 32 2.6 3 1,434.6 PATMI before EI 126.4 100 94.3 100 34.0 EI - Divestments - * (67.9) - EI - Write-down ^ (25.8) - - PATMI after EI 100.6 26.4 281.1 ^ Impairment charge in respect of the Group s hotels in Myanmar * $70.4m loss from sale of Capital Square, offset by $2.5m gain from sale of Bayswater Village 14
Notes on Profit Recognition Three Cluny Hill bungalow plots sold Recognised profit of $16.5m (4Q profit recognition : $11.3m) Profit recognition of $11.6m for Caribbean at Keppel Bay based on 34% sales and 72% completion (4Q profit recognition : $3.9m) One Park Avenue achieved 100% sale Profit recognition of $44.3m based on 100% sales and 66% completion (4Q profit recognition : $18.3m) 15
Operations Review 16
Operations Review Singapore Fairly good residential sales despite difficult market conditions Sold three Cluny Hill bungalow plots Divested a small site at Norfolk Road Launched Freesia Woods and The Linc 58% and 45% sold respectively Acquired an adjoining site (8,533.5 sm) at Keng Lee Road to be amalgamated with an existing land plot for an enhanced integrated development (combined land area : 21,754.1 sm) Achieved first closing of $180m for Asia No. 1 Property Fund 17
Operations Review - Overseas One Park Avenue in Shanghai, China 100% sold Achieved average selling price of about RMB11,700 psm Acquired land for residential development City % Stake Site Area Proposed Development Chengdu, 44 42 ha Residential township (about 980 China condominium units under parcel 1) (Total no. of units : about 6,700) Ho Chi Minh City, 90 68.7 ha Saigon Sports City (about 250 Vietnam apartments under phase 1) (Total no. of units : > 2,200) Srinakarin Rd, 45 7.8 ha 361 detached houses Thailand 18 Watcharapol Rd, 67 12.5 ha 278 detached houses Thailand
Market Outlook 19
Singapore Market Outlook Residential Signs of optimism for the residential market in 2004 Housing demand to rise with continued economic recovery and volume of pent-up demand Home prices bottomed Prices may rise by 5-10% in 2004 20
Singapore Market Outlook Office Demand for prime office space is expected to improve with economic recovery and improved business confidence in 2004 Relatively limited new prime office supply in the next few years will help boost rentals and capital values 21
Asia Market Outlook Sustainable demand for housing in Asia, supported by good economic prospects, favourable demographics and government incentives Rapid urbanisation and rise in middle-income group fuel demand for good quality homes in well-planned residential townships in countries such as China, Vietnam, Thailand and India 22
China 23
8 Park Avenue, Shanghai Soft-launching 85 one-bedroom units, with more than half sold Estimated average selling price for whole project : Around RMB13,000 psm 24
Sustainable Demand Drivers GDP growth reached 9.1% in 2003, the highest level in the past 6 years. Increased business activity with China s entry into the World Trade Organization and the hosting of the 2008 Olympic Games and World Expo in 2010 Government housing reforms (e.g. tax incentives, subsidies and low mortgage rates) Merging of foreign and domestic sales markets in Shanghai and Beijing 25
Impact of RMB Revaluation Impact on Keppel Land:- Currently manages RMB funding exposure through available hedging instruments In event of RMB appreciating in value, KLL will benefit from the revaluation through higher profits from its investments 26
Thailand 27
Villa Arcadia at Srinakarin Launching 361 units of detached houses in first half of 2004 28
Sustainable Demand Drivers GDP growth of 6.7% backed by domestic consumption and exports Demand roughly matched with supply, and landed housing most popular among buyers Sustained low interest rate environment A relatively young growing population and household formation 29
Genuine Demand Supports Market Demand and supply gap extremely narrow - at levels far below crisis years Pent-up demand still present - robust economic growth has raised disposable income levels and overall affordability Government has taken proactive steps to stem excessive price increases 30
Vietnam 31
Villa Riviera Launching 113 villas in first half of 2004 32
Sustainable Demand Drivers GDP growth of 7.2% in 2003 supported by exports and foreign investments Entry into the World Trade Organization in 2005 and other initiatives expected to spur economic growth Rising affluence and sustained economic growth will continue to drive demand for quality housing. 33
Going Forward 34
Singapore Going Forward Selectively acquire land for residential development Launch residential projects Continue efforts to divest low-yielding investment properties Overseas Progressively launch residential projects in China, Thailand and Vietnam Actively seek residential development opportunities in other promising countries e.g. India, Indonesia 35
Residential Launches Singapore Project Location No. of Units Possible Launches/Re-launches in 1H2004 Available The Callista 22 Mar Thoma Road 36 The Elysia 6 Mar Thoma Road 34 The Linc Lincoln Road 28 Freesia Woods Sunset Way 54 Cluny Hill Bungalow Plots Cluny Hill 7 Caribbean at Keppel Bay Keppel Bay Drive 664 Urbana River Valley Road 126 Pinnacles @ Wee Nam Wee Nam Road 480 The Tresor Duchess Park 62 36
Residential Launches Overseas Project Total No. of Units Exp Launch Date China 8 Park Avenue, Shanghai 945 condo units 1H2004 The Seasons, Beijing 1,859 condo units 2H2004 Wang Jiang Garden, Chengdu 1,143 condo units 2H2004 Chengdu Township (Parcel 1) 980 apartments 1H2005 Park Avenue Central, Shanghai 708 condo units 2H2005 Thailand Villa Arcadia at Srinakarin, Bangkok 361 detached houses 1H2004 Villa Arcadia at Watcharapol, Bangkok 278 detached houses 2H2004 Vietnam Villa Riviera, Ho Chi Minh City 113 villas 1H2004 Saigon Sports City (Phase 1) 250 apartments 1H2005 37
Residential Landbank Project Location Attributable Attributable Total No. Land Area (sf) GFA (sf) of Units Avenue Park (52%) Sixth Avenue 89,866 125,813 163 Parc Devon (70%) Devonshire Road 9,645 27,043 24 Crest @ Cairnhill (60%) Cairnhill Circle 6,710 18,786 15 Naga Court Bukit Timah Road 49,168 103,254 70 Viewpoint Meyer Road 81,288 241,474 167 Keppel Bay Plots 1, 3, 6 Keppel Bay Drive 596,623 885,632 1,927 (30%) & 4 (11.7%) Total 833,300 1,402,002 2,366 38
Thank You This release may contain statements which are subject to risks and uncertainties that could cause actual results to differ materially from such statements. You are cautioned not to place undue reliance on such statements, which are based in the current views of Management on future developments and events. 39
SINGAPORE Keppel Land Limited 230 Victoria Street #15-05 Bugis Junction Towers Singapore 188024 Tel : (65) 6338 8111 Fax : (65) 6336 0098 URL: www.keppelland.com.sg AUSTRALIA SYDNEY Keppel Land Pty Ltd Suite 5 Level 10 80 Mount Street North Sydney NSW 2060 Australia Tel : (612) 8920 8988 Fax: (612) 8920 8900 CHINA BEIJING Beijing Kingsley Property Development Co. Ltd. Unit 701, Level 7, China World Tower 2 No. 1 Jian Guo Men Wai Avenue Beijing 100004 China Tel : (86) 10 6505 0866 Fax: (86) 10 6505 0865 CHENGDU Chengdu Hillwest Development Co. Ltd. 31E First City Plaza No. 308 Shuncheng Street Chengdu,, Sichuan 610017 China Tel : (86) 28 8293 1033 Fax: (86) 28 8293 1032 KUNMING Spring City Golf & Lake Resort Tangchi Yiliang Yunnan 652103 China Tel 40: (86) 871 767 1188 Fax: (86) 871 767 1186 SHANGHAI Shanghai Merryfield Land Co Ltd 1266 Nan Jing Xi Road Room 1208, Plaza 66 Shanghai 200040 China Tel : (86) 21 6288 3066 Fax: (86) 21 6288 2799 HONG KONG SAR USI Property Management Ltd 15th Floor Wheelock House 20 Peddar Street Central, Hong Kong Tel : (852) 2525 9798 Fax: (852) 2801 4301 INDONESIA BATAM PT Nongsa Point Marina Nongsa, Batam Island Indonesia Tel : (62) 778 761 333 Fax: (62) 778 761 474 BINTAN PT Ria Bintan PT Straits - CM Village Jl Perigi Raja Parcel A-11A Lagoi,, North Bintan Kepulauan Riau Indonesia Tel : (62) 770 692 868 Fax: (62) 770 692 837 JAKARTA PT Keppel Land Wisma BCA Tower II, 5A Floor Jl. Jend Sudirman Kav.. 22-23 23 Jakarta Selatan 12920 Indonesia Tel : (62) 21 571 2238 Fax: (62) 21 571 1813 MAKASSAR Hotel Sedona Makassar Jln Somba Opu No 297 Makassar 90111 South Sulawesi Indonesia Tel : (62) 411 870 555 Fax: (62) 411 870 222 MANADO Hotel Sedona Manado Jl Raya Tanawang Ko Desa Tateli, Kec Pineleng Kab, Minahasa Sulawesi Utara Indonesia Tel : (62) 431 821 202 Fax: (62) 431 821 201 SURABAYA PT Sentral Tunjungan Perkasa PT Sentral Supel Perkasa Jl Kenari 3-5 Surabaya 60275 Indonesia Tel : (62) 31 532 7261 Fax: (62) 31 531 4957 YOGYAKARTA Melia Purosani Yogyakarta Jl Suryotomo No 31 Yogyakarta 55112 Indonesia Tel : (62) 274 589 523 Fax: (62) 274 588 070 MALAYSIA JOHOR BAHRU Tanah Sutera Development Sdn Bhd No 2 Jalan Sutera Merah 2 Taman Sutera 81200 Johor Bahru Malaysia Tel : (607) 289 9009 Fax: (607) 289 9119 PENANG Jemih Rezeki Sdn Bhd 46 Ground Floor Jalan Todak 4 Pusat Bandar Seberang Jaya 13700 Seberang Perai Malaysia Tel : (604) 398 5028 Fax: (604) 398 5027 MYANMAR MANDALAY Sedona Hotel Mandalay No 1 Junction of 26th and 66th Street Chanayetharzan Township Mandalay Myanmar Tel : (95) 2 36488 Fax: (95) 2 36499 YANGON Sedona Hotel Yangon No 1 Kaba Aye Pagoda Road Yankin Township Yangon Myanmar Tel : (95) 1 666 900 Fax: (95) 1 666 911 PHILIPPINES ORTIGAS Keppel Philippines Properties Inc Penthouse, Benquet Centre Building #12 ADB Avenue, Ortigas Centre Mandaluyong City Philippines Tel : (632) 637 5184/86 Fax: (632) 637 5185 SOUTH KOREA SEOUL 3001, 30th Flr Korea World Trade Centre 159-1 1 Samsung-Dong, Gangnam-gu gu Seoul 135-729 Korea Tel : (82) 2 551 3587 Fax: (82) 2 551 4303 THAILAND BANGKOK Keppel Thai Properties Public Co. Limited 30th Floor Jewellery Centre Building 138/108 Nares Road Siphraya, Bangrak Bangkok 10500 Thailand Tel : (662) 237 1999 Fax: (662) 237 2666 VIETNAM HANOI International Centre Joint Venture Co Ltd 17 Ngo Quyen Street Unit 04, 7th Floor International Centre, Hanoi Vietnam Tel : (84) 4 824 1125 Fax: (84) 4 824 1124 HO CHI MINH CITY Keppel Land Watco Co Ltd Saigon Centre, 4th Floor 65 Le Loi Boulevard District 1, Ho Chi Minh City Vietnam Tel : (84) 8 823 2500 Fax: (84) 8 822 9822