Overview

Sales of new private homes in Singapore recovered in 2009 with 14,688 units transacted for the year, more than three times the level in 2008 and similar to the number sold in 2007. The volume was driven primarily by pent-up demand in the mass market, strong liquidity and a more positive economic outlook. This improved market sentiment also flowed through to mid and high-end sectors of the market. The pace of activity slowed, however, towards the end of the third quarter and into the fourth quarter following concerns that the government may introduce measures to curb speculative activity.

Group Performance

The completion of three developments, The Fernhill, Tierra Vue and Hillcrest Villa, enabled MCL Land to achieve record revenues of US$453 million for the year ended 31 December 2009, an increase of 32% over 2008. The underlying profit for the year was US$154 million, compared with an underlying loss of US$106 million in 2008, which had included a US$180 million write down of development properties. The profit attributable to shareholders for 2009 reached a record high of US$154 million, compared with a loss of US$107 million for the prior year. The value of the Group’s development properties at the end of the financial year continued to reflect the write down of US$180 million made at the end of the previous year.

Shareholders’ funds were US$533 million at the end of 2009, US$139 million higher than the previous year end. Progress payments received from development properties enabled the Group to record net cash of US$93 million at the end of 2009, compared with net debt and net gearing of US$181 million and 46%, respectively, at the end of 2008.

The Board is recommending a first and final dividend of S¢12.50 per share payable on 26 May 2010, an increase of 25% from 2008.

Properties

Parvis, a freehold condominium joint venture development at Holland Road, met with a good response upon its launch in November with 56% of its 248 units committed at the year end. By 31 December 2009, pre-sales had reached 44% at D'Pavilion, a 50-unit apartment development at Upper Serangoon Road, and 90% at The Peak@Balmeg, a 180-unit condominium development at Balmeg Road. In addition, all but two of the 163 units at Hillcrest Villa had been sold.

The Fernhill and Tierra Vue were completed in the first half of the year, and together contributed a net profit of US$39 million. Hillcrest Villa was completed in September 2009 enabling a profit of US$113 million to be recognised.

Construction of the Group's development projects is progressing well. Waterfall Gardens and D'Pavilion are scheduled to complete in 2010, followed by The Peak@Balmeg in 2011. In addition, the Group has a further six development projects in Singapore with a total gross floor area of some 121,000 sq. m that will be launched progressively over the next few years.

The Group's joint venture developments in Malaysia are on track. Phase 1 of Riana Green was 99% pre-sold at the end of 2009, while at Seremban Forest Heights, a joint venture development in Seremban, 203 of the 396 terrace houses, bungalows, bungalow lots and shop offices were pre-sold.

Wangsa Walk in Kuala Lumpur, a joint venture retail mall development with a net lettable area of 25,000 sq. m, completed in September with 77% of its space leased.

People

On behalf of the Board, I would like to express my appreciation to the staff for their dedication and contributions, and to our clients, business associates and stockholders for their continued support.

Prospects

Sales of residential properties in Singapore are expected to continue at a reasonable level while economic conditions continue to improve, subject to the introduction of government measures to reduce activity in the sector. The Group’s results for 2010 will benefit from the completions of Waterfall Gardens and D’Pavilion in Singapore.