Revenue of Mainboard-listed dormitory developer-cum-operator Centurion Corp slipped by 11% to $29.4 million in 3QFY2020 ended September, from the $33.1 million posted a year ago.
This is a result of lower occupancy levels in its portfolio, particularly in its purpose-built student accommodation (PBSA) properties in Australia and the United Kingdom which were affected by the health measures imposed to curb the spread of Covid-19 infections.
Its PBSAs in Melbourne and Manchester were among the worst hit as the two cities dealt with travel restrictions and the closure of universities.
Additionally, revenue from its facilities in the UK were affected by the early lease termination option offered to residents in the final semester of the UK academic year.
Overall, the segment’s revenue came in at $6.2 million, down 39% from the $10.2 million logged in 3QFY2019.
A further depression in the group’s revenue was mitigated by the stable performance of its purpose-built workers’ accommodation (PBWA) portfolio which recorded a 1% growth in income to $22.8 million, from $22.6 million in the previous year.
The group also enjoyed revenue contributions from a newly added management service contract from the JTC Corporation in Singapore as well as its dwell Archer House PBSA in the UK which commenced operations in 4QFY2019.
The quarter also the Centurion securing a tender from JTC to lease and manage 6,400 beds in four new Quick-build Dormitories (QBDs).
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“3QFY2020 continues to show impact from COVID-19 on Centurion’s portfolio. Conditions remain fluid, as some cities continue to see unabated virus outbreaks, other cities begin to see signs of recovery and possible economic knock-on effects are anticipated,” says CEO Kong Chee Min in a business update.
He adds that the group has taken measures to enhance management and operational efficiencies and has deferred discretionary capital expenditure to conserve cash.
This includes refinancing $55 million of medium term notes due between February 2022 and April 2024, for prudent capital management.
Looking ahead, Kong notes that the PBWA segment still faces uncertainties from the government measures imposed as well as the knock on economic effects faced by businesses who employ these workers.
On the contrary, the outlook for PBSAs is mixed with demand being slow in cities such as Manchester and Melbourne, which are facing a higher number of Covid-19 infections.
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However, Kong says there has been a pick up in bookings in locations with fewer Covid-19 infections.
As such, he says the segment’s performance in the coming months will depend on the containment measures undertaken by authorities, as well as when university programmes and travel can resume.
Shares in Centurion closed flat at 32 cents on Nov 13.
