Property developer, First Sponsor Group, has reported earnings of $12.5 million for its FY2023 ended Dec 31, down 90.5% y-o-y from FY2022’s $131.3 million.
This translates to an earnings per share (EPS) of $1.08, 89% lower than FY2022’s EPS of $9.90, while revenue declined 38% y-o-y to $282.9 million in FY2023 from $427.5 million in the year before.
Meanwhile, net finance costs for First Sponsor’s FY2023 increased 143% y-o-y to $28.1 million from $11.6 million the year before.
Gross profit also fell 36% y-o-y to $131.9 million, from FY2022’s $206.1 million.
Notably, net profit for the group was $1.9 million for 2HFY2023, a 96.8% decline from 2HFY2022, due mainly to lower contribution from its property development segment arising from a lower handover volume of development properties in China and at lower profit margins, as well as a lower foreign exchange (forex) gain net of fair value loss on financial derivatives.
Despite the group’s results, its board of directors has recommended a final dividend of 3.1 Singapore cents per share for FY2023, which will bring the total dividend declared for FY2023 to 4.2 Singapore cents per share, representing a 10.5% growth from FY2022.
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To add strength to its balance sheet, the group has infused new equity funds of $234.6 million raised in October 2023 through the exercise of warrants by its two key shareholders.
The two key shareholders still hold additional warrants expiring on March 21 2029 which can potentially raise an additional $169.3 million.
Coupled with its substantial unutilised committed credit facilities, First Sponsor aims to be well-positioned to manage economic challenges arising from difficult market conditions such as China’s property crisis but to also capitalise on any favourable business opportunities that may arise.
See also: PNE Industries reports earnings of $1.3 mil for FY2024, up 70.5% y-o-y
“FY2023 has been a particularly challenging year for the company with sustained economic headwinds experienced concurrently in all the key markets that the group operates in at the same time. Despite an environment of high financing cost and capitalisation rates in the Netherlands, Germany and Australia as well as the weak property market sentiments in China, the group has managed to operate profitably although this is the lowest profit level since its initial public offering (IPO) in 2014,” says Neo Teck Pheng, group chief executive officer.
Shares in First Sponsor closed flat at $1.19 on Feb 20.
