SINGAPORE (Nov 6): Far East Orchard saw its earnings tumble 72.1% to $2.9 million for the 3Q ended September, from $10.5 million a year ago.
This was mainly due to a lower share of profit of joint venture, which fell 77.8% to $1.6 million, from $7.4 million a year ago.
This was the result of the absence of the progressive recognition of profits from the sale of units in a joint venture property development project, RiverTrees Residences, which obtained its Temporary Occupation Permit in May 2017.
In addition, sales revenue fell 20.7% to $36.3 million in 3Q17, from $45.7 million a year ago.
The decline was mainly due to completion of certain onerous lease agreements in Australia and New Zealand in late 2016, as well as weaker performance from the two hospitality assets in Perth, Australia.
As at end September, cash and cash equivalents stood at $211.1 million.
Looking ahead, Far East Orchard says near-term outlook for the hospitality sector in Singapore is expected to remain subdued, while outlook for the hospitality industry in Australia remains positive.
The group says it plans to continue to grow its hospitality businesses by increasing the number of management contracts, acquiring strategic assets and divesting properties to recycle capital for re-deployment towards higher yielding growth opportunities.
Shares of Far East Orchard closed 1 cent lower at $1.53 on Monday.
