SC Global Development's (S$1.225, BUY) recent bid to acquire an overseas resort hotel development has been unsuccessful.

"The company continues to look out for opportunities to expand its overseas business and its regional diversi'cation path. However, it should be noted that there is no certainty or assurance that the business expansion and diversi'cation will result from such engagements or discussions taking place from  time to  time," it said.

The high'end residential property developer had previously said its wholly owned subsidiary, Tanah Investments, will pay US$32.5 million (S$40 million) for shares in two Singapore 'rms, which would give it indirect ownership of a resort development site in Bali. It plans to develop the 2 million square feet seafront development site into a villa resort and hotel either for sale or to be operated by the company.

SC Global swung into the red in the second quarter ended June 30, recording a net loss of $21.7 million, compared with a net pro't of $46.3 million in the year'ago period. The loss was mainly attributed to an allowance for asset impairment of $65.1 million made by its subsidiary, AVJennings (AVJ), without which the company would have been pro'table in Q2, said SC Global. Revenue for the quarter fell 53 per cent to $123.1 million.

For the 'scal 'rst half, SC Global posted a net loss of $31.7 million, compared with a net pro't of $119.1 million a year earlier. Revenue was $172.8 million, down 64 per cent from $483 million a year earlier. SC Global shares hit a high of $1.285 following the announcement before ending yesterday down 6.5 cents, or 5 per cent, at $1.225.

Though we deem the non'event as a negative, we believe the group will still be on the lookout for further diversi'cation opportunities. Considering the improvement in sales rate for 3QFY12, we expect the upcoming results to be better than prior quarter.

Source: AmFraser