SC Global

SC Global: Reported a net loss, which was in-line with grp’s earlier warning guidance last week. Grp posted a net loss of nearly $10m for 1Q12 vs a gain of $72.8m net profit yoy. Group also reported a 78% plunge in 1Q revenue to $49.8m from $221.2m yoy. Co. said that its rev which included contributions from progressive revenue recognition of development projects in SG such as Seven Palms and Sentosa Cove, was lower due to lower sales and the absence of significant contributions from the progressive recognition from The Marq on Paterson Hill, Hilltops and Martin No. 38, which received their TOP in 2011. Also points out that the requirement in 2011 to adopt the new INT FRS 115 accounting standard no longer permits rev and profit recognition from overseas contributions to be recognised based on percentage of completion. Therefore, contributions from the group's subsidiaries, Kairong Developments in China and AVJennings Ltd in Australia, can only be recognised on completion and handover of developments. We note that this poor set of results by SC Global, could possibly impact negatively on SG high-end residential developers, e.g Ho Bee and Wing Tai.