Perennial Q4 net profit down 37.8% on lower rental revenue from TripleOne Somerset

SINGAPORE - Perennial Real Estate Holdings' net profit for the fourth quarter ended Dec 31 sank 37.8 per cent to S$25.6 million, even as revenue slid 24.2 per cent to S$21.5 million.

The decrease was mainly due to lower rental revenue from TripleOne Somerset as expiring leases were not renewed due to asset enhancement works which started last year, the company said.

Revenue for the full year came in at $110.2 million, marginally lower than S$117.7 million a year earlier due to the absence of the acquisition fee of AXA Tower and lower rental revenue from TripleOne Somerset. But this was mitigated by strata sales of office units in TripleOne Somerset. Net profit for the full year was down 39.6 per cent to S$35 million.

The group continued to focus strategically on its core markets China and Singapore in the 2016 financial year - completed projects in the two countries, which together accounted for about 70 per cent of total property value, provided income stability.

Perennial also pushed forward with its integrated real estate and healthcare strategy in China through acquisitions and joint ventures to scale up the medical and healthcare-related business.

The company will focus on accelerating strata sales at TripleOne Somerset and AXA Tower in this financial year, said Mr Pua Seck Guan, the chief executive of Perennial.

It will also execute two major asset enhancement programmes planned at TripleOne Somerset and AXA Tower, both of which are expected to complete in 2018 or 2019.

In China, the group will focus on preparing the Perennial International Health and Medical Hub and Chengdu Xiehe International Eldercare and Retirement Home for the commencement of business.

Earnings per share for the quarter was 1.53 cents, down from 2.48 cents in the corresponding period a year earlier.

Net asset value per share was S$1.631 as at Dec 31, from S$1.688 on the same date a year earlier. The company proposed a dividend of 0.4 cent per share for the financial year.