Frasers Property (FPL) has sunk into the red with a $74.0 million loss for the 2HFY2023 ended Sept 30. The loss was mainly attributed by non-cash, unrealised net fair value losses of $441.8 million on the group’s properties in the UK, Australia and the European Union (EU). The fair value losses were mainly due to higher capitalisation rates amid a higher interest rate environment.
In contrast, FPL’s earnings for the corresponding period the year before stood at $741.8 million on fair value gains of $902.3 million.
For the FY2023, FPL’s earnings fell by 85.9% y-o-y to $123.2 million, also due to fair value losses of $446.2 million for the year, compared to the $1.08 billion in fair value gains the year before.
“While our financial performance may be affected by external forces in certain years including the high interest rate environment, inflationary pressures, and ongoing global geopolitical and economic uncertainties, we continue to work on enhancing the resilience of our portfolio to deliver sustainable value to stakeholders over the long-term,” says Panote Sirivadhanabhakdi, group CEO of Frasers Property TQ5 .
2HFY2023 revenue fell by 8.8% y-o-y to $2.0 billion due to mainly to lower contributions from the group’s residential projects in Singapore and from its industrial projects. These were partly offset by improvements in the hospitality segment from higher occupancies and room rates post-Covid-19 as well as higher contributions from residential projects in Australia.
Gross profit fell by 11.1% y-o-y to $740.2 million.
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Share of results of joint ventures (JVs) and associates rose by 11.5% y-o-y to $80.8 million.
Profit before interest, fair value change, tax and exceptional items (PBIT) fell by 13% y-o-y to $628 million.
Exceptional items stood at a loss of $37.4 million for the 2HFY2023, down from exceptional gains of $129.9 million. The net loss was mainly due to the impairment of hotel properties, net of gain on termination of a lease, and the impairment of various investments in associates.
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For the FY2023, revenue rose by 1.8% y-o-y to $3.95 billion due to mainly to improvements from the hospitality segment and higher pbit contributions from residential projects in Singapore and China. They were partly offset by lower contributions from residential projects in Thailand and Vietnam. The group’s higher revenue was also due to the contributions from the acquisition of the stake in Nex.
Gross profit increased by 2.5% y-o-y to $1.54 billion.
Share of results of joint ventures (JVs) and associates rose by 39.3% y-o-y to $150.9 million.
FY2023 PBIT rose by 5.1% y-o-y to $1.31 billion.
Exceptional items stood at a loss of $37.2 million, down from exceptional gains of $134.4 million.
As at Sept 30, cash and cash equivalents stood at $2.66 billion, 20.0% lower y-o-y.
Total assets stood at $39.8 billion, 1.0% lower y-o-y.
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For the period, FPL has proposed a first and final dividend of 4.5 cents per share, up from 3.0 cents in the year before.
“After a decade of reshaping our portfolio and building competitive business platforms, we have leading business platforms such as industrial and logistics, Singapore suburban retail, and a strong Southeast Asia presence. We are entering the next phase of our journey on a strong footing, as we maintain our focus on improving the quality and visibility of earnings,” Sirivadhanabhakdi adds.
Shares in Frasers Property closed 0.5 cents lower or 0.65% down at 76.5 cents on Nov 10.
