Frasers Centrepoint sees revenue jump but profit fall 13.8% in Q2 on fair value losses

Artist's impression of North Park Residences.
Artist's impression of North Park Residences. PHOTO: FRASERS CENTREPOINT

SINGAPORE - Frasers Centrepoint Limited (FCL) reported lower earnings in the second quarter, when the property group saw improved revenue but was affected by fair vale losses of its joint ventures and associates.

Net profit for the three months to March 31 was S$123 million, down 13.8 per cent from a year ago. Excluding the fair value impact, profit actually rose 11.1 per cent year on year to S$110.3 million, on the back of a 103.3 per cent rise in revenue to S$897.9 million.

"These were mainly driven by maiden profit recognition from the completion of the Twin Fountains executive condominium project and progressive development profits from the North Park Residences private condominium project in Singapore," FCL said in its results announcement on Tuesday (May 10).

Revenue from its commercial properties - such as malls and offices held by Frasers Centrepoint Trust and Frasers Commercial Trust - inched up 2 per cent to S$105 million.

The group's hospitality revenue - with hotels and serviced residences - was up 67 per cent to S$182 million on contributions from Capri by Fraser, Changi City in Singapore and boutique hotels acquired in Britain last year. Profit was however eroded by exchange rate movements in China and Australia.

Its Australia business under FPA reported 34 per cent revenue growth to S$180 million, but profit was also affected by higher overhead costs to account for its plan to launch some 3,850 units there in this financial year.

Half year total revenue rose 3.7 per cent to S$1.57 billion, while net profit was down 32.7 per cent to S$221.9 million.

The board has declared an interim dividend of 2.4 cents a share, payable on June 9.

Looking ahead, FCL expects persistently low sales volumes for its Singapore development properties, and a soft outlook for the domestic hospitality market due partly to a hotel room glut.

But the rising average household income may boost Singapore's retail market and sustain FCL's mall revenue. The group officially opened Waterway Point in Singapore last month.

In Australia, demand for prime grade industrial assets is strong and yields for secondary grade ones are firming up, FCL said.