Frasers Centrepoint full year profit falls

Construction of Northpoint City, part of the FCL portfolio, is on track for completion next year.
Construction of Northpoint City, part of the FCL portfolio, is on track for completion next year.PHOTO: FRASERS CENTREPOINT

Frasers Centrepoint (FCL) will focus on growing recurring income and earnings from overseas contributions although Singapore and Australia remain its core markets, the firm said yesterday.

Mr Chia Khong Shoong, chief corporate and financial officer, told a results briefing: "We've gone from what has been a very Singapore- centric business, where about 70 per cent of our profit came from Singapore, to become more balanced."

Singapore contributed 39 per cent to profit before interest and taxes in the year to Sept 30, from 71 per cent in the 2011 financial year.

Mr Chia added: "Singapore and Australia remain core markets for us, and one of the things we'll look to do in the coming years is to explore opportunities in some of the secondary markets we're in, to try and create further stability and diversification of our portfolio."

This is part of FCL's strategy to sharpen its focus. It now has four major reporting segments - Singapore, Australia, hospitality and international business, which includes China and Britain.

Before, commercial property in Singapore was reported separately from other development assets here but they are now combined under the Singapore segment.



    $3.44 billion (-3.4%)


    $479.9 million (-11.8%)


    6.2cents (unchanged)

Mainboard-listed FCL has Frasers Centrepoint Trust, Frasers Commercial Trust, Frasers Logistics and Industrial trust and Frasers Hospitality Trust, giving the group a presence in Asia, Australia and Europe.

It reported yesterday that full- year net profit fell 11.8 per cent to $479.9 million, and revenue dipped 3.4 per cent to $3.44 billion compared with the same period a year ago.

If fair value change and exceptional items were included, net profit would drop 22.6 per cent to $597.2 million.

A final dividend of 6.2 cents a share was proposed, bringing the total dividend for the year to 8.6 cents, unchanged from a year ago.

Earnings per share was 14.33 cents, from 17.17 cents a year ago, before fair value change and exceptional items, while net asset value per share was $2.30 as at Sept 30, compared with $2.25 last year.

In Singapore, the impact from a shrinking portfolio of residential developments was partially offset by maiden recognition of profits from North Park Residences and the completion of Twin Fountains executive condominium.

It has also had to recognise impairment losses on residential projects, mostly in western Australia, and faced a weaker Australian dollar.

However, the hospitality business benefited from a full-year contribution from the 29 newly acquired properties from the Malmaison Hotel du Vin group in Britain.

FCL's exposure to international markets also increased during the year, in line with the group's strategy to grow overseas earnings contributions.

For instance, it acquired a 35.6 per cent stake in leading Thai real estate firm Golden Land Property Development for $231 million.

Mr Chia noted there has been a shift in the recurring income base, where recurring income is now 62 per cent of FCL's portfolio, compared with 31 per cent in the 2011 financial year.

He added: "The mix of capital allocation has also shifted. Today, about 70 per cent of our assets are allocated into recurring income assets. It's an important shift in terms of the quality of earnings that we have."

There have been organisational changes in the year as well, with Mr Panote Sirivadhanabhakdi taking over as group chief executive on Oct 1.

Mr Sirivadhanabhakdi said: "We are looking at the future potential of what may come as opportunities to grow our portfolio, and will optimise the capital that we have... we are preparing ourselves for the worst and the best to come."

FCL shares closed one cent up at $1.505.

A version of this article appeared in the print edition of The Straits Times on November 10, 2016, with the headline 'Frasers Centrepoint's full-year profit falls 11.8%'. Subscribe