First Sponsor Q3 earnings up 16% at $25.57m

SINGAPORE - Mainboard-listed First Sponsor Group has posted a net profit of $25.57 million for the third quarter ended Sept 30, up 16.1 per cent from the same period a year earlier as a rise in gross profit margin made up for a fall in total revenue.

Revenue in the three months ended Sept 30 slipped 17.5 per cent to $53.5 million, as property development revenue fell 55 per cent to $20.7 million. This was due to a lower number of residential units handed over for the Millennium Waterfront project (83 units in the third quarter versus 354 units in the same period last year).

But the group's gross profit margin increased as takings from the property financing and hotel businesses increased. The higher-yielding property financing segment constituted about 54.5 per cent of the group's gross profit, versus just 34.6 per cent in the third quarter of 2017.

Property financing revenue rose 76.3 per cent to $20 million, due to a larger loan portfolio. This was partially offset by the absence of a one-off penalty interest income of $4.3 million which was recognised in the third quarter last year.

Property holding revenue which includes hotel operations rose 75 per cent to $12.8 million, due largely to a full quarter revenue contribution from the Hilton Rotterdam hotel which was leased by the group with effect from Feb 1. Higher contributions from the Crowne Plaza Chengdu Wenjiang and Holiday Inn Express Chengdu Wenjiang Hotspring hotels also helped.

First Sponsor's China property financing loan book has grown by more than 20 per cent to about two billion yuan (S$397 million) as at Sept 30, it said.

Group chief executive Neo Teck Pheng said: "The uncertainty over China's economic outlook has further intensified the tight credit situation in the country. This development has enabled the group to further expand its property financing business."

The Star of East River project in Dongguan has had a good sales response to the launch of the Soho units in late September, the group added. As for the new development land in Nancheng District of Dongguan secured in the second quarter, construction work has commenced.

Third-quarter earnings per share was 3.69 cents, up 8.8 per cent from the third quarter last year. Net asset value per share was 194.16 cents as at Sept 30, down from 198.1 cents as at June 30.

First Sponsor is a mixed property developer in the Netherlands and China, an owner of commercial properties and hotels, and a provider of property financing services in the Netherlands, Germany and China. It is controlled by Hong Leong Group Singapore and Tai Tak Estates.