Hatten Land’s net loss hits S$5.8M — A huge setback for the real estate giant

Hatten Land Harbour City Project in Melaka

SINGAPORE: Real estate developer Hatten Land’s net loss hits S$5.8M (RM20.7 million) for its second fiscal quarter ending Dec 2023, marking a significant dip from the S$1.21 million(RM4.3 million) loss in the same period last year, The Business Times reports.

The loss per share amounted to S$0.0031 (RM0.0111), compared to S$0.00065 (RM0.0023) previously. The company did not declare any dividends for the reviewed quarter. The decline in revenue by 21.3% to S$1.07 million (RM3.8 million) from S$1.38 million (RM4.9 million) primarily contributed to the weaker performance in Q2.

Hatten Land attributed this to its ongoing sales and marketing strategy, aligned with efforts to secure anchor tenants for its malls, potentially boosting property values and garnering more attention for unsold units.

Meanwhile, the cost of sales for the quarter decreased by 43% to S$449,560 (RM1.6 million).

Over the six-month period ending Dec 2023, Hatten Land’s net loss widened to S$8.91 million (RM31.7 million) from S$5.90 million (RM21 million), with revenue down by 6.4% to S$3.99 million (RM14.2 million).

As of December last year, the company’s total loans and borrowings stood at S$110.65 million (RM393.8 million), with S$110.09 million (RM391.8 million) classified as current liabilities, surpassing the cash and bank balances of S$842,925 (RM3 million).

The company’s liabilities of approximately S$309 million (RM1.1 billion) also exceeded its current assets of S$246.36 million (RM876.8 million). However, Hatten Land maintained a net asset position of S$12.28 million (RM43.7 million) by the end of December.

Hatten Land directors “believe the group can continue operating” as Malaysian property market shows “gradual improvement”

Despite the challenging financial landscape, Hatten Land’s directors expressed confidence in its ability to operate on a going-concern basis.

The company highlighted positive signs in the Malaysian property market’s “gradual improvement” and optimism for reviving its hospitality and property-related activities in Melaka, maintaining a steadfast focus on its core property development business.

Hatten Land’s development properties’ total market value surpassed S$309 million (RM1.1 billion) as of Jun 2023, with S$186.29 million (RM663 million) comprising unsold completed properties, which the company plans to sell gradually.

Hatten Land is collaborating with creditors to extend or restructure payment plans, including contra payments with its property units, and negotiating with banks for repayment extensions to address financial obligations.

The company initiated the strategic restructuring of its subsidiary, GMSB, to achieve a sustainable capital structure and reduce future cash outflows.

In a commitment to sustain operations, one of Hatten Land’s executive directors, also a controlling shareholder, pledged to provide necessary financial support in the form of debt, equity, or a combination thereof.

Looking ahead, Hatten Land acknowledged Melaka’s slower recovery pace compared to major urban centres like Kuala Lumpur and Johor Bahru, compounded by increased regional competition.

Addressing challenges posed by non-operational commercial spaces due to the pandemic, the company aims to transform these areas into versatile and appealing spaces through partnerships across various sectors and ongoing fundraising efforts.

Hatten Land’s shares closed at S$0.013 on Feb 8 at 3:33 p.m. SGT./TISG

Read also: CapitaLand Investment acquires 3 properties in Singapore and Thailand

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