Oxley Holdings posts H1 loss of $1.1 million on lower revenue, offset by lower finance costs
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An artist's impression of Oxley Towers in Kuala Lumpur City Centre developed by Oxley Holdings.
PHOTO: OXLEY HOLDINGS
Derryn Wong
SINGAPORE - Property developer Oxley Holdings has posted a loss of $1.1 million in the first six months of its financial year ended Dec 31, 2023, down from a profit of $277,000 in the previous corresponding period.
In a bourse filing on Feb 8, the group put the result largely down to “lower gross profit attributable to lower revenue, and lower share of results from joint ventures and associates”. It noted, however, that this was partially offset by lower finance costs on reduced borrowings.
It reported a 63 per cent decrease in revenue to $164.4 million, down from $438.4 million year on year, mainly due to lower revenue recognised from Singapore development projects.
The share of results from joint ventures was 70 per cent lower, year on year, mainly due to lower contribution of profits for the Riverfront Residences and Affinity at Serangoon projects, where a “substantial share of profit was recognised prior to 1H FY2024”.
However, this was partially offset by higher revenue from the group’s hotel operations, and also the October 2023 sale of a Grade-A office tower in Kuala Lumpur for around RM406 million (S$114 million).
The group’s finance costs dropped 29 per cent to $52.8 million from $74.2 million, mainly due to reduced bank borrowings.
Net asset value per share for the group fell to 21 cents as at Dec 31, 2023, down from 22 cents as at June 31, 2023. Its gearing ratio improved to 1.4 times, from 1.6 times over the same period, the result of a reduction in group borrowings by $283 million.
The group cited an optimistic macroeconomic outlook, which includes the possibility of higher global economic growth rates in the next two years, and a decrease in inflation and interest rates.
It also echoed optimism for global tourism and a robust recovery of Singapore’s international visitor arrivals, which could boost hotel rates and occupancy rates for the group’s hotels.
But it cautioned that escalating operation costs and labour shortages could affect the overall performance of the hotel segment.
Mr Ching Chiat Kwong, executive chairman and chief executive of Oxley Holdings, said: “Barring unforeseen circumstances, we expect profit contributions from ongoing projects in Malaysia and London over the next 12 months, and foresee a rise in Singapore hotel performance amid tourism recovery.”
He added: “While acknowledging potential challenges in the broader economic environment, we will continue to seek opportunities to divest non-core assets. Overall, we are cautiously optimistic on the outlook for 2024.” THE BUSINESS TIMES
