SINGAPORE (May 10): Frasers Property announced 2Q18 earnings increased by 74.2% to $124.1 million, compared to $71.2 million in 2Q17.
Revenue for the second quarter ended March came in at $841.7 million from $705.8 million in the previous year, largely attributable to revenue recognition on sales settlements in China and Australia and maiden contributions from business parks in the UK.
Revenue from its Singapore Strategic Business Unit (SBU) increased by 12% to $197 million while PBIT increased by 17% to $99 million, due to higher revenue and PBIT from the group’s residential and commercial properties in Singapore, but was partially offset by lower contributions from Frasers Commercial Trust (FCOT) Singapore and Australia properties.
Revenue from Australia SBU increased by 1% to $311 million while PBIT increased by 61% to $88 million. The increase in revenue was mainly due to high levels of sales settlements with better profit margins at Tailor’s Walk in Botany, New South Wales and Avondale in Avondale Heights, Victoria. Also included in PBIT were share of profits from joint venture projects, mainly from Centrale in North Ryde, New South Wales, of $14 million.
Revenue from Hospitality SBU remained fairly constant at $186 million, while PBIT decreased by $10 million to $23 million, largely due to lower contributions from its properties in the UK on weak consumer sentiments in the food and beverage segment and pre-opening expenses incurred by its property in Dalian, China.
Revenue and PBIT from Europe and rest of Asia increased by more than threefold to $147 million and $94 million, respectively, due to profit recognition on sales settlements of Phase 3B Baitang One, Suzhou, China which contributed revenue and PBIT of $61 million and $30 million, respectively. The increase was further boosted by maiden contributions from Geneba Properties NV in Europe and the business parks in the UK.
With cost of sales increasing 7.7% y-o-y to $514.1 million, gross profit for 2Q18 was 43.5% higher at $327.6 million from $228.3 million last year.
Other losses increased significantly to $10.6 million, compared to $0.04 million a year ago.
Administrative expenses also increased by 25.3% to $79.3 million from $63.3 million in the previous year.
As at Mar 31, the group’s cash and cash equivalents stood at $1.41 billion.
The group has declared an interim dividend of 2.4 cents, which will be payable on Jun 12.
Panote Sirivadhanabhadi, Group CEO of Frasers Property says, “Enlarging our recurring income base remains a key pillar of our strategy for achieving sustainable growth in view of the inherent lumpiness of development income, and our recent initiatives, particularly in Europe, continue to reflect this.”
Shares in Frasers Property last traded 2 cents lower at $1.93 on Wednesday.
