SINGAPORE (Nov 7): Perennial Real Estate Holdings saw its earnings nearly treble to $48.3 million for the 3Q18 ended September, some 183.3% higher than $16.9 million a year ago.
This was mainly due to fair value gain of $241.9 million from the valuation of two plots on Beijing Tongzhou Integrated Development Phase 1 which were identified for lease, following the receipt of construction permits.
3Q18 revenue rose 8.7% to $22.2 million, from $20.4 million a year ago.
The increase was mainly attributable to revenue from Capitol Singapore and Perennial International Health and Medical Hub (PIHMH), which started contributing since 2Q18.
In addition, acquisition fee earned from the healthcare joint venture as well as improved performance from Perennial Qingyang Mall and Perennial Jihua Mall contributed to the increase.
However, gross profit fell 43.9% to $8.0 million in 3Q18, from $14.3 million a year ago.
This was due to cost of sales more than doubling to $14.2 million during the quarter, as it included the operational costs of Capitol Singapore and PIHMH.
In addition, there was pre-opening expenses, including hotel staff costs incurred prior to the opening of Capitol Kempinski Hotel in October 2018 as well as advertising and marketing expenses incurred by PIHMH which recently commenced operations.
Share of results of associates and joint ventures fell 83.7% to $4.9 million in 3Q18, from $29.8 million a year ago.
This was due to the absence of a one-off gain last year on bargain purchase of $25.9 million arising from the UEL transaction.
As at end September, cash and cash equivalents stood at $113.2 million.
Looking ahead, the group says its focus is leveraging on China’s HSR network to deliver integrated real estate and healthcare hubs.
It will continue to source for other similar integrated projects that are well-connected and in tier one or tier two provincial capitals to be held through its healthcare joint venture.
Shares in Perennial closed 1.5 cents higher at 69.5 cents, or up 2.2%, on Wednesday.
