Frasers Property reports fiscal 3Q net profit jumped 68 percent on fair value gains

Sign at Frasers Tower, owned by Frasers PropertySign at Frasers Tower, owned by Frasers Property

Frasers Property reported Thursday its fiscal third quarter net profit jumped 68.2 percent on-year to S$333.9 million on recurring income sources and fair-value gains from portfolio-management initiatives.

Revenue for the quarter ended 30 June dropped 53.1 percent on-year to S$638.8 million, the developer said in a filing to SGX.

“Our large base of recurring income sources continues to provide a good foundation to our earnings and helped to offset the inherent effects of lumpy development income contribution,” Panote Sirivadhanabhakdi, group CEO of Frasers Property, said in the statement.

He added that the earnings benefited from contributions from the recently acquired investment in PGIM Real Estate AsiaRetail Fund.

The share of results of joint ventures and associates, net of tax, increased 105.7 percent on-year to S$85.54 million, mainly on contributions from PGIM ARF, the filing said.

The fair value change on investment properties was S$262.96 million, surging from S$39.92 million in the year-ago period, the filing said.

Profit before fair value change, taxation and exceptional items was S$166.79 million for the quarter, down 42.3 percent on-year, the company said.

By business segment, the Singapore strategic business unit (SBU) posted revenue of S$133.33 million, down 80.4 percent on-year, with net profit of S$37.83 million, down 44.4 percent on-year for the quarter.

Frasers Property said the decline was mainly due to fewer settlements in the Parc Life Executive Condominium and the absence of year-earlier profit contributions from North Park Residences, which was completed and had full revenue recognition in the fiscal first quarter ended 31 December.

The Australia SBU reported revenue of S$203.57 million, down 29.4 percent on-year, with a net loss of S$2.45 million, swinging from a year-ago net profit of S$20.93 million.

“These decreases were mainly attributable to the lumpiness of revenue and profit recognitions of residential development projects, with fewer sales settlements at Tailor’s Walk in Botany, New South Wales,” Frasers Property said.

The Hospitality SBU posted revenue of S$195.71 million, down 1 percent on-year, with a net loss of S$5.45 million, wider than the year-ago net loss of S$1.63 million.

“This was mainly due to the tapering off of sales and settlements from Phase 3B of Baitang One, Suzhou in China

The Europe and rest of Asia division posted revenue of S$106.15 million, down 45.6 percent on-year, with net profit of S$18.85 million, down 62.2 percent on-year.

For the nine-month period, Frasers Property reported net profit increased 52.9 percent on-year to S$599.9 million on revenue of S$2.66 billion, down 10 percent on-year.

In its outlook, Frasers Property said it would be prudent, adding it would continue to proactively manage its assets and capital, and to recycle assets into its sponsored REITs.

“In its major markets of Singapore and Australia, the group will continue to undertake development activities in a measured manner, taking into consideration market conditions,” Frasers Property said. “The group continues to experience the lumpiness of recognition of income from all its development businesses.”

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