Oxley Holdings reports fiscal 2Q net profit dropped 33 percent on lower UK revenue

Singapore 50 dollar bill

Oxley Holdings reported on Monday fiscal second quarter net profit attributable to owners of the company dropped 33 percent on-year to S$45.24 million, mainly on lower revenue from a project in the U.K.

Revenue for the quarter ended 31 December fell 12 percent on-year to S$355.48 million, it said in a filing to SGX after the market close on Monday.

But the Singapore-based property developer noted that the eight projects it has launched since April in the city-state have seen “overwhelming” response from buyers, with more than 1,700 units sold at a value of S$1.9 billion; it added that three of the projects, the Verandah Residences, Sixteen35 Residences and Sea Pavilion Residences, were fully sold.

“Oxley is pleased with the performance of the diversified portfolio of development and investment projects in Singapore and overseas. We are well-positioned to tap on the growing demand for quality and affordable housing in the Asia-Pacific and Europe regions,” Ching Chiat Kwong, executive chairman and CEO, said in the statement.

It declared an interim dividend of 0.32 Singapore cent, down from 0.72 Singapore cent in the year-ago period.

Finance costs for the quarter jumped 70 percent on-year to S$26.91 million, mainly on increased bank loans for acquisitions of properties and advances to joint ventures and on higher interest rates generally, it said.

Marketing and distribution costs increased 233 percent on-year to S$8.12 million on higher expenses for launching and advertising projects in Singapore and overseas, show flat expenses, sales commission for an Ireland project, and marketing expenses for the Stevens Road hotels which began operations in the middle of the year-ago quarter, Oxley said.

It reported a S$245,000 loss from its share of associates and joint ventures in the quarter, swinging from a profit of S$60.58 million in the year-ago quarter, due to the absence of contributions from the Bridge project, which was completed in the previous year.

Oxley had a loss on investments in securities of S$18.69 million in the quarter, widening sharply from a loss of S$6.60 million in the year-earlier quarter, it said.

It also posted a loss of S$26.62 million on translation from foreign operations, compared with a gain of S$5.68 million in the year-ago quarter.

In its outlook, Oxley pointed to concerns over heightened risks from the U.S. trade war with China, Brexit and the slowing China economy.

“Though the increasing economic risks coupled with an increase in home supply may curb Singapore’s property price growth in 2019,
the company is in a relatively good position as the land bank was acquired earlier at lower prices,” it said.

But it added that overseas markets were expected to be affected.

“However, the uncertainty over Brexit may have a positive spill over effect on other parts of Europe. Further, these events are also expected to have an impact on currency fluctuations,” it said.

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