NON-CASH unrealised fair-value losses and impairment on some of its commercial properties in the UK and Australia, as well as lower residential contributions from Singapore and Thailand, dragged down earnings for real estate developer and manager Frasers Property : TQ5 0%.
In a bourse filing on Friday (May 10), the company reported an 81.8 per cent drop in net profit in the six months ended March 2024 to S$35.8 million, down from S$197.2 million in the previous corresponding period.
Revenue fell 20.4 per cent to S$1.5 billion for the six-month period, down from S$1.9 billion the year before.
Earnings per share dropped to 0.91 Singapore cent, from 5.02 Singapore cents in the previous corresponding period.
No interim dividend was declared, unchanged from the previous year.
Attributable profit fell 74.6 per cent to S$57.4 million in the six months, down from S$225.8 million in the previous corresponding period.
The company said the drop in attributable profit was largely due to the non-cash unrealised fair-value losses and impairment on “certain commercial properties” in the UK of around S$115 million amid weak business sentiment there.
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It also noted similar fair-value losses on commercial properties in Australia, partially offset by net fair-value gains from industrial and logistics properties in the country, as well as continental Europe.
These losses were also partially offset by higher contributions from residential settlements in China and Australia, and gain on disposal of 49.9 per cent of a wholly owned subsidiary to a third-party capital partner.
For its Singapore segment, overall revenue decreased 63 per cent to S$266 million, while profit before interest and tax (PBIT) fell 39 per cent to S$202 million.
Singapore residential properties’ revenue dropped 93 per cent to S$34 million, while PBIT tumbled 94 per cent to S$8 million, due to the absence of contributions from the 455-unit prime condominium Riviere, which obtained its Temporary Occupation Permit in January.
Meanwhile, revenue from its Singapore commercial properties “remained consistent”, while PBIT dropped 14 per cent to S$19 million on a lower share of profits from Frasers Tower.
Over in Thailand, revenue fell 13 per cent to S$234 million, while PBIT slipped 25 per cent to S$61 million due to a lower level of residential settlements, though this was offset by improved performance from investment properties.
Panote Sirivadhanabhakdi, group chief executive officer of Frasers Property, said: “Continual market headwinds have created ongoing challenges for us, which are reflected in these results.”
He said that in order to add market resilience, the company will focus on the disciplined and consistent unlocking of value, increasing development exposure over the medium to long term, and strengthening the resilience of the group’s income streams.
He added that the group had executed capital recycling transactions totalling S$1.1 billion in the six months.
Shares of Frasers Property closed flat at S$0.80 on Friday, before the update.
