PROPERTY investment company Far East Orchard on Thursday (Nov 7) reported a net profit of S$16.9 million for the nine months ended Sep 30, more than double the S$7.6 million in the corresponding year-ago period.
The increase in profit was due to a strong first-half operating performance, despite higher financing expenses, said the group.
Revenue for the three quarters stood at S$140.1 million, climbing 4.5 per cent from S$134.1 million year on year.
Operating profit also rose, expanding 16.4 per cent to S$47.6 million from S$40.9 million.
The group noted that the increase in operating profit was due to the strong H1 results, making up for a lower Q3 contribution from the purpose-built student accommodation business segment.
In H1 FY2024, Far East Orchard’s purpose-built student accommodation segment fuelled growth, resulting in profit of S$18.2 million.
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However, contribution from this area is seasonally lower in Q3 due to the six-week summer break in the United Kingdom, where the group has 13 assets with nearly 3,700 beds.
As at Sep 30, the group’s portfolio of purpose-built student accommodation assets in the United Kingdom had a portfolio occupancy rate of 91 per cent for the 2024/2025 academic year that commenced in September.
This was less than the 99 per cent occupancy rate achieved a year ago, due to marginally lower international student acceptances.
“Nonetheless, academic year 2024/2025 achieved strong rental growth,” said Far East Orchard.
The hospitality business segment, meanwhile, maintained stable contributions, propped up by “buoyant” performance in the Japan and Europe markets.
Group chief executive Alan Tang expects growth from purpose-built rental reversions and global travel recovery to “flatten” on post-Covid normalisation and market uncertainties.
“We remain focused on executing our strategic initiatives to enhance our business resilience as we navigate the challenges ahead,” he said.
Far East Orchard shares closed flat at S$1.03 on Thursday, before the business update.
