Pacific Star sinks into red with $22m full-year loss

In a photo from Aug 6, 2019, a Vietnamese policeman approaches anti-China protesters as they hold placards during a demonstration in front of the Chinese embassy in Hanoi, Vietnam.
In a photo from Aug 6, 2019, a Vietnamese policeman approaches anti-China protesters as they hold placards during a demonstration in front of the Chinese embassy in Hanoi, Vietnam.PHOTO: REUTERS

SINGAPORE - Catalist-listed Pacific Star Development on Thursday posted a net loss of $22 million for the 12 months ended June 30, on poor market sentiment in the Iskandar, Malaysia, property market.

This was from a restated net profit of $7.3 million for the 18 months ended June 30, 2018, this used as the comparative period as the group had on November 2017 changed its financial year end from Dec 31 to June 30.

Loss per share stood at 4.3 cents, from earnings per share of 2.09 cents a year ago. No dividend has been declared for the year, unchanged from the previous comparative period.

Revenue for the full year was down 96.5 per cent to $4.3 million, from $121.4 million a year ago. This was mainly due to decreased sales in its Puteri Cove Residences (PCR) project. PCR is a property development project located in Iskandar Puteri, Malaysia, developed by the group's wholly-owned indirect subsidiary, Pearl Discovery Development.

The group also reclassified $2.5 million in sales relating to its aluminium division under discontinued operations. The aluminium division is currently under liquidation.

Pacific Star's cost of sales narrowed to $3.1 million, from $63.1 million a year ago.

Its gross profit fell 98 per cent to $1.2 million from $58.4 million the year prior. This was due to a decrease in number of units sold, lower average selling prices and sales incentives for PCR, as well as a reclassification of $1.9 million in cost of sales relating to the aluminium division.

On its outlook, Pacific Star said the residential property market "continues to deteriorate" in Iskandar Puteri, Malaysia and Bangkok, Thailand, with larger supply of unsold inventory flooding the market. This comes as construction is completed on projects which were previously under various phases of construction.

It added that central banks in Malaysia and Thailand continue to adopt a "tight rein" on new bank mortgage loans to buyers, further restricting the purchasing ability of buyers. Property developers have also begun to reduce sales prices more aggressively in a bid to sell unsold inventory.

"The group continues to persist with its marketing and promotion efforts via a network of sales agents in select Asian cities to sell its two property projects to both end users and investor groups," it added.

Pacific Star shares last traded flat at $0.11 on Tuesday.