Frasers Property's Q3 profit up by 8.6%, anchored by recurring income

Thu, Aug 09, 2018


RECURRING income from investment properties continued to anchor Frasers Property's operating results as it posted a net profit of S$198.1 million for the third quarter, up 8.6 per cent from a year ago.

Revenue fell 2.7 per cent to S$1.36 billion, but it continued to be supported by maiden contributions from the industrial and logistics parks in continental Europe and business parks in the UK.

Earnings per share were 6.53 Singapore cents after fair value change and exceptional items, up from 6.26 cents a year ago.

No dividend was declared for the period.

Commenting on the results, Panote Sirivadhanabhakdi, Group CEO of Frasers Property, said: "Our strategy of strengthening our recurring income base continues to feature prominently in our results."

He added that maiden contributions from the group's industrial and logistics parks in continental Europe and business parks in the UK helped to "anchor operating results and provided stability against the inherent lumpiness of development income".

In Singapore, the group achieved "solid" pre-sales for existing launches, said the group. With Parc Life executive condominium 97 per cent sold and Seaside Residences condominium over 84 per cent sold, the group is left with around 150 unsold units in its inventory.

"Planning for a residential development on Jiak Kim Street that can yield around 500 units is in progress, with the project expected to be launched in the first half of 2019," said Frasers Property.

The group's portfolio of retail malls continues to be "resilient", recording rising occupancy rates and positive rental reversions.

In the commercial space, pre-lease commitments of around 80 per cent for Frasers Tower has been achieved and tenants are in the process of fitting out at the building following its completion in May 2018.

In the residential segment in Australia, the group released 1,250 units for sale in 9M FY18 and plans to release over 600 more in the remaining quarter.

The group said that it is on track to complete around 3,000 units by the end of FY18, having completed 1,955 units in 9M FY18.

In the commercial and industrial and retail development space, the team is working on delivering 10 facilities spanning 131,000 square metres in aggregate, of which six of the facilities - with an investment value on delivery of approximately S$229 million - will be retained as part of the group's investment properties portfolio.

Looking ahead, the group will "maintain its efforts to build on its development activities in a measured manner" in its two biggest markets, Singapore and Australia.

In key markets in Europe and the rest of Asia, the group will continue to explore prospects to "deepen its presence by leveraging on its core expertise".

Frasers Property shares on Wednesday closed unchanged at S$1.70. The results were announced after market close.