ARA posts 21% drop in Q2 net profit

One-off adjustments dragged down second-quarter earnings at real estate fund management company ARA Asset Management, it announced yesterday.

Net profit for the three months to June 30 slid 21 per cent to $16.4 million, down from the $20.8 million in the same period a year ago.

Excluding the one-off adjustments, however, net profit would be $16.9 million compared with the $15.2 million previously.

Revenue slipped 9 per cent to $36.8 million, dragged down by a decline in financial and other incomes. Financial income sank 53 per cent to $2.98 million, while other income plunged 99 per cent to $19,000 due to a $2.1 million acquisition of ARA Korea that was recognised during the period.

Recurrent management fees rose 1 per cent to $31.7 million, on the back of higher Reit management fees.


  • NET PROFIT: $16.4 million (-21%)

    REVENUE: $36.8 million (-9%)

    DIVIDEND PER SHARE: 2.3 cents (unchanged)

Acquisition, divestment and performance fees surged 256 per cent to $2.15 million, mainly from the respective acquisitions and divestments made by Fortune Real Estate Investment Trust (Reit) and Cache Logistics Trust.

Net profit for the half year slid 8 per cent to $35.4 million, while revenue edged up 1 per cent to $61.8 million.

Earnings per share for the quarter came in at 1.95 cents, down from the 2.47 cents previously. Net asset value per share stood at 40.77 cents as of June 30, higher than the 40.37 cents as of Dec 31 last year.

The group declared an interim dividend of 2.3 cents per share, unchanged from previously, to be paid out on Aug 28.

Its total assets under management stood at $26.9 billion as of June 30. ARA group chief executive John Lim noted that the second quarter had been an "active" one for the group's Reit and private funds divisions.

Both Fortune Reit and Cache Logistics Trust, for instance, had unlocked value in their respective divestments, he said.

Suntec Reit recently announced its proposed sale of Park Mall in conjunction with its 30 per cent interest in a joint venture to redevelop the mall into a commercial development.

ARA in June raised capital commitments for a new private real estate fund, with its acquisition of a portfolio of retail-focused income-producing commercial properties in Malaysia worth RM1.7 billion (S$607 million). ARA units closed 1.5 cents or 0.87 per cent down at $1.71 yesterday.

A version of this article appeared in the print edition of The Straits Times on August 07, 2015, with the headline 'ARA posts 21% drop in Q2 net profit'. Subscribe