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13-08-16, 01:33
http://www.businesstimes.com.sg/companies-markets/frasers-centrepoints-q3-earnings-fall-on-lower-development-profits
Frasers Centrepoint's Q3 earnings fall on lower development profits
By Lee Meixian
[email protected]
@LeeMeixianBT
Aug 6, 2016
FRASERS Centrepoint (FCL) on Friday posted a 62.4 per cent drop in its attributable profit to S$68.2 million for its third quarter ended June 30, 2016.
After fair value change and exceptional items, net profit still fell - but by a milder 15.1 per cent to S$154 million. Revenue fell 32.5 per cent to S$682.1 million.
The real estate developer said its performance was mainly due to lower profits from the group's development portfolio in Singapore, Australia and China.
The decline was partly mitigated by profits from the completion of Twin Fountains executive condominium (EC), new streams of income from the Malmaison Hotel du Vin group of 29 hotels bought in June 2015, and share of profits from a newly acquired associate in Thailand.
There was a fair value gain due to an increase in the value of investment properties that were injected into the recently-listed Frasers Logistics & Industrial Trust during the quarter.
Earnings per share was 2.35 Singapore cents, halved from 5.71 cents a year ago.
Lim Ee Seng, group CEO of FCL, said: "This quarter's results continued to attest to the importance of FCL's drive to achieve sustainable earnings by growing income from recurring as well as overseas sources.
"Amid the tapering off of contributions from Singapore development projects, coupled with timing differences in completions of overseas projects, the role of our recurring income base in providing stability and mitigating the impact of lumpy completion timelines has been clearly demonstrated."
Looking ahead, Mr Lim said the group expects "stronger contribution from development income next quarter as several projects in Australia and China are due to be completed".
On a nine-month basis, net profit fell 37 per cent to S$268.8 million, while revenue dropped 10.8 per cent to S$2.3 billion.
Again, this was due to lower profits from its Singapore developments, but also significantly lower contribution from Frasers Property Australia due to differences in the timing of completions and settlements of residential projects, coupled with higher overhead costs for project launches. FCL had also sold mall-cum- office building Crosspoint, in Beijing, in the prior reporting period.
FCL noted that on the development front, transaction volumes in the Singapore residential property market continue to be low. And while the number of new private homes sold rose from about 3,400 units in the first half of 2015 to about 3,800 units in the first half of 2016, residential property prices declined marginally in the quarter ended June 2016, marking an 11th straight quarterly decline.
Singapore remains an important market for FCL. It recently launched the Parc Life EC in April, and is working towards the launch of a private condominium project at its Siglap Road site in 2017. FCL's portfolio of malls and offices in Singapore also continues to trade well.
In China, its residential developments continue to be well-received, it said. In its hospitality segment, strong occupancy and room rate growth continue in New South Wales, Australia, while the market remains competitive in China. Australia's office market and prime investment grade assets in the industrial market also see strong demand.
The counter rose half a cent to end at S$1.53 on the stock market on Friday.
Frasers Centrepoint's Q3 earnings fall on lower development profits
By Lee Meixian
[email protected]
@LeeMeixianBT
Aug 6, 2016
FRASERS Centrepoint (FCL) on Friday posted a 62.4 per cent drop in its attributable profit to S$68.2 million for its third quarter ended June 30, 2016.
After fair value change and exceptional items, net profit still fell - but by a milder 15.1 per cent to S$154 million. Revenue fell 32.5 per cent to S$682.1 million.
The real estate developer said its performance was mainly due to lower profits from the group's development portfolio in Singapore, Australia and China.
The decline was partly mitigated by profits from the completion of Twin Fountains executive condominium (EC), new streams of income from the Malmaison Hotel du Vin group of 29 hotels bought in June 2015, and share of profits from a newly acquired associate in Thailand.
There was a fair value gain due to an increase in the value of investment properties that were injected into the recently-listed Frasers Logistics & Industrial Trust during the quarter.
Earnings per share was 2.35 Singapore cents, halved from 5.71 cents a year ago.
Lim Ee Seng, group CEO of FCL, said: "This quarter's results continued to attest to the importance of FCL's drive to achieve sustainable earnings by growing income from recurring as well as overseas sources.
"Amid the tapering off of contributions from Singapore development projects, coupled with timing differences in completions of overseas projects, the role of our recurring income base in providing stability and mitigating the impact of lumpy completion timelines has been clearly demonstrated."
Looking ahead, Mr Lim said the group expects "stronger contribution from development income next quarter as several projects in Australia and China are due to be completed".
On a nine-month basis, net profit fell 37 per cent to S$268.8 million, while revenue dropped 10.8 per cent to S$2.3 billion.
Again, this was due to lower profits from its Singapore developments, but also significantly lower contribution from Frasers Property Australia due to differences in the timing of completions and settlements of residential projects, coupled with higher overhead costs for project launches. FCL had also sold mall-cum- office building Crosspoint, in Beijing, in the prior reporting period.
FCL noted that on the development front, transaction volumes in the Singapore residential property market continue to be low. And while the number of new private homes sold rose from about 3,400 units in the first half of 2015 to about 3,800 units in the first half of 2016, residential property prices declined marginally in the quarter ended June 2016, marking an 11th straight quarterly decline.
Singapore remains an important market for FCL. It recently launched the Parc Life EC in April, and is working towards the launch of a private condominium project at its Siglap Road site in 2017. FCL's portfolio of malls and offices in Singapore also continues to trade well.
In China, its residential developments continue to be well-received, it said. In its hospitality segment, strong occupancy and room rate growth continue in New South Wales, Australia, while the market remains competitive in China. Australia's office market and prime investment grade assets in the industrial market also see strong demand.
The counter rose half a cent to end at S$1.53 on the stock market on Friday.