Ho Bee Land Limited (SGX: H13) FY2025 Financial Review

Ho Bee Land Limited, a prominent property developer and investor based in Singapore, has released its condensed interim financial statements for the second half and full year ended 31 December 2025. This analysis provides an in-depth review of the Group’s performance, dividend declarations, and strategic outlook, based exclusively on the official disclosures.

Key Financial Metrics

Performance Review and Key Drivers

Revenue and Profitability

• Revenue: FY2025 revenue fell 17% YoY to \$440.1 million, mainly due to lower development property sales (-24%) and rental income (-10%). Lower settlements for Australian projects and the reclassification of Elementum as a jointly-controlled asset following a partial divestment drove the decline.
• Profit After Tax: PAT dropped 7% YoY to \$102.4 million, reflecting the lower topline and a sharp reduction in one-off gains and fair value changes.
• Earnings per Share: EPS contracted 9% YoY to 15.09 cents. The second half saw a substantial drop in profit against 2H2024, mainly due to exceptional disposal/remeasurement gains in 2H2024 that were not repeated.
• Net Asset Value: NAV per share rose modestly to \$5.67 (+2.0%), supported by retained earnings and translation gains.

Divestments and Exceptional Items

• In August 2024, the Group divested a 49% interest in HB Universal Pte Ltd (Elementum, Singapore) for \$133.6 million, resulting in a one-off gain of \$34.8 million and a remeasurement gain of \$36.2 million in FY2024. The absence of similar gains in FY2025 explains the drop in “other gains and fair value changes.”
• A \$4.5 million dilapidation income from Apollo House and Lunar House in FY2025 partially offset this effect.

Segment and Geographic Insights

• Development Properties: Weaker settlements in Australia and reduced sales from Turquoise (Sentosa Cove, Singapore) drove lower revenue and profit.
• Investment Properties: Rental income declined as Elementum was reclassified, and Apollo House/Lunar House contributed less due to partial divestment.
• Geography: Singapore and UK rental markets remained key contributors, with Australia dominating development revenue.

Cost and Capital Structure

• Cost of Sales: Fell in line with lower development sales.
• Net Finance Costs: Fell 25% YoY due to loan repayments and lower interest rates, supporting bottom-line resilience.
• Gearing: Total liabilities fell by \$103.5 million to \$2.77 billion, reflecting loan repayments and a reduced debt load. Cash and cash equivalents increased to \$228.7 million.

Dividend

• FY2025 Final Dividend Proposed: 5.0 cents per share (tax-exempt), up from 4.0 cents in FY2024—a 25% increase despite lower profits.
• Record Date: 13 May 2026
• Payment Date: 22 May 2026

Asset Revaluation

• London portfolio recorded a net fair value gain of \$3.7 million (vs. a loss of \$17.0 million in FY2024), while the Singapore portfolio saw no fair value change for the year.

Corporate Actions and Strategic Developments

• Partial divestment and deconsolidation of Elementum, now a jointly-controlled entity.
• Ongoing capital recycling with the redemption of preference shares in a jointly-controlled entity totaling \$102.9 million.
• Acquisition of a 19.9% stake in Mark Street North Melbourne Pty Ltd and incorporation of Elimbah Land Pty Ltd (Australia) to support the Group’s growth pipeline.

Chairman’s Statement

The Chairman’s statement was not included verbatim in the report, but the performance review and outlook by the Board is summarised as follows:

“The Group continues to explore new areas of growth and undertake strategic portfolio optimisation to support long-term value creation. Looking ahead, the Group’s key initiatives include growing a strong development pipeline of well-located master-planned communities in our key markets across Australia, and the upcoming major enhancement works for 1 St Martin’s Le Grand in London, for which planning permission was secured in mid-2025. Amid ongoing macroeconomic uncertainties, the Group will continue to adopt a prudent and disciplined approach to capital management, while strengthening asset management and embarking on enhancement initiatives to improve the quality and performance of the Group’s portfolio.”

The tone is constructive and cautiously optimistic, with an emphasis on portfolio enhancement and disciplined capital management in the face of macroeconomic uncertainty.

Noteworthy Events

• No legal disputes, natural disasters, or significant policy changes noted.
• No share buybacks, dilutive events, or related-party transactions requiring shareholder mandate.
• No audit or review by external auditors for this interim report.
• No significant post-balance-sheet events as of the report date.

Conclusion and Recommendation

Overall Assessment: Ho Bee Land’s FY2025 performance was resilient in the face of lower development and rental income, with profits supported by lower finance costs and disciplined capital management. The Group’s NAV per share rose and its balance sheet strengthened, reflecting prudent conservatism. Dividend growth of 25% despite lower profits signals confidence in underlying cash flows and asset values.

Recommendation for Existing Shareholders: The Group’s stable cash flows, increased dividend, and commitment to portfolio optimisation suggest that long-term holders may consider maintaining or even modestly increasing their positions, especially if seeking stable yield and exposure to prime Singapore/UK/Australia real estate. However, monitor for further falls in development sales or rental income in future periods.

Recommendation for Potential Investors: For those not currently holding the stock, Ho Bee Land offers exposure to a well-capitalised, conservatively managed real estate group with a clear focus on capital recycling and prudent growth. The improved dividend yield and strong NAV backing make the stock attractive for value and income investors. However, the slowing topline and absence of exceptional gains mean future growth may be moderate unless new developments or asset enhancements deliver incremental profit.

Disclaimer: This analysis is based solely on the company’s published interim financial statements and does not constitute investment advice. Investors should consider their own risk tolerance and investment objectives, and consult with a qualified financial advisor before making any portfolio decisions.

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