Ara Asset Management Q4 profit down

SINGAPORE - Ara Asset Management was hit by higher finance costs in the fourth quarter while revenue was marginally lower, which pulled down net profit for the period.

The real estate fund management firm - six regional real estate investment trusts under its purview - saw its net profit drop 28 per cent year on year to S$18.5 million in the three months ended Dec 31.

Total revenue was down just 1 per cent to S$45.5 million, but higher expenses were a major drag on the performance.

Total expenses were up 45 per cent to S$23.9 million, with finance costs jumping 355 per cent to S$5.5 million "due to a net loss on fair valuation and disposal of financial assets of S$4.7 million," Ara Asset Management said when announcing its results on Thursday.

The operating income was a mixed bag. Management fees jumped 10 per cent in the fourth quarter to S$37.9 million, but acquisition, divestment and performance fees slid 58 per cent to S$2 million while finance income dropped 20 per cent to S$5.1 million.

For the full year, revenue was up 13 per cent to S$176.8 million, and net profit rose 14 per cent to S$88.7 million.

Chief executive John Lim called 2016's financial performance "stable", adding that the privatisation that Ara Asset Management is undergoing will deliver value to shareholders and give it deeper financial to scale up for growth.

Mr Lim led the buyout bid for his firm that was announced in November. The offer is priced at S$1.78 a share. The deal meant that no dividend was declared for the financial period. Ara Asset Management shares closed flat at S$1.705 Thursday, ahead of the results announcement.