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SCMP Reporter

GUOCO Group saw profit for the year slide 27.4 per cent to $656.3 million in interim results affected by exceptional items.

  Core operating figures were up in the six months ending December 31, resulting in a 17.4 per cent growth in profit, excluding a $345.3 million exceptional item in the same period booked in 1993.

  The financial services conglomerate reported a decline in earnings per share of 30.4 per cent to $1.60. After stripping out the 1993 exceptional, making the previous period's earnings per share $1.42, the benchmark rose 12.67 per cent.

  The company's management made no statement about business prospects or conditions.

  Exceptional items covered the $236.04 million profit on the sale of 14.14 million shares in Dao Heng Bank in a listing.

  A further $109.26 million profit was booked on the sale of leasehold Dao Heng Bank premises. There were no exceptionals in the 1994 interim period.

  The company said: 'The major contributor [to profit] was Dao Heng Bank Group which recorded an operating profit, before exceptional items, of $593.2 million.'   Profit for the year at the bank, after tax, associated companies, exceptionals and minorities, but before transfers, fell 2.8 per cent to $536.55 million.

  The exceptional in the 1993 period was $109.26 million on the sale of a bank leasehold premises.

  The bank said of its operating profit: 'This profit was mainly derived from the group's core banking and finance related business.'   Earnings per share fell 36.4 per cent, including the exceptional, to 82 cents. It fell 19.6 per cent, excluding the exceptional on the equivalent 1993 earnings per share number of $1.02.

  'The group recorded outstanding increases in both deposits and loans which grew by 36.9 per cent to $64.4 billion and 27.9 per cent to $38.3 billion respectively,' the bank said in its statement.

  The loan to deposit ratio for the period in 1994 was 59.5 per cent against 63.7 per cent.

  Dao Heng said: 'The strongest business growth was registered in OTB Card Company, which saw its cardholder base double over the period.'   It added: 'Building upon their combined network of 90 domestic and nine overseas branches, Dao Heng Bank and Overseas Trust Bank have achieved considerable synergies.

  'All group back office and support functions are now centralised, and economies of scale have been and will continue to be realised.'   Costs appeared to be kept under control as the cost-income ratio in 1994 was 40.29 per cent against 44.8 per cent in 1993.

  Net interest income was up 12.8 per cent to $879.34 million. Interest income leaped 47.8 per cent to $2.43 billion and interest expense was up 79.4 per cent.

  Operating income was up 8.3 per cent to $1.14 billion.

  Other operating income was down 4.5 per cent to $259.11 million. It made up 22.76 per cent of operating income in 1994 against 25.8 per cent in 1993.

  Provisions for bad and doubtful loans and advances remained relatively flat, in contrast to the big rises seen among the bank's counterparts in the territory. The total rose $2.99 million to $86.42 million.

  The transfer to inner reserves was $50 million, or 9.3 per cent of profit, against $128.76 million or 23.3 per cent of profit in 1993.

  Guoco announced a dividend of 21 cents a share, flat on the previous year, and Dao Heng a dividend of 21 cents per share. It is payable to those appearing on the register of members on Friday March 31. The payment is due on April 7.

  At First Capital, profit before tax rose 44 per cent to S$87.1 million while profit attributable to shareholders was up 37 per cent at $57.1 million.



Guoco Group lifts operating profits