FAR East Orchard’s net profit more than doubled to S$18.2 million for the first half of 2024, from S$8.2 million in the year-ago period.
The group’s purpose-built student housing accommodation (PBSA) segment grew by 22.8 per cent during this period, bringing total revenue for H1 to S$97.3 million, Far East Orchard said on Tuesday (Aug 13). This was 7.1 per cent higher than the S$90.9 million recorded in the first half of 2023.
The group benefited from rental growth across most of its PBSA portfolio, underpinned by faltering supply and high demand from students for housing, Far East Orchard said.
In April, the group acquired a 49 per cent stake in Homes For Students, which has enhanced Far East Orchard’s operating capabilities and strengthened its position in the PBSA sector.
Far East Orchard said: “The hospitality business segment, which contributed a majority of S$62.4 million to revenue, continued to provide stable contributions with a slight uplift from the group’s leased portfolio in Japan.”
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
For the second half of 2024, the group noted that with the volatile macroeconomic climate and mounting geopolitical tensions, travel recovery will face headwinds with the slowdown in discretionary travel spending.
Nevertheless, it remains cautiously optimistic about the mid-term outlook of international travel demand.
The group’s pipeline of hotel openings includes Quincy House Singapore and The Eve Hotel Sydney, which are expected to open in Q4.
Meanwhile, student numbers in the United Kingdom are at record highs, with a current shortfall of 580,000 beds in the country.
“With the limitations in PBSA supply, it is the group’s view that the UK PBSA sector remains favourable with its structural supply-demand gap, and the group continues to explore suitable opportunities in the UK to address the imbalance in student beds,” Far East Orchard said.
Earnings per share in H1 stood at 3.74 Singapore cents, up from 1.73 Singapore cents a year ago. No dividend was declared for the half year, unchanged from before.
Shares of Far East Orchard ended flat at S$1 on Wednesday.
