Net profit up 73% due to purchase of Aussie property firms and 6 hotels
PROPERTY company Frasers Centrepoint lifted earnings in the second quarter, thanks to contributions from recent acquisitions.
Net profit came in at $143 million, 73 per cent up on the same three months last year, while revenue remained unchanged at $442 million.
The acquisition of Australian property firm Australand in August last year has made Australia the largest contributor by bringing in 40 per cent of Frasers's total revenue.
This, coupled with the acquisition of six hotels by Frasers Centrepoint Trust, boosted turnover, although this was partly offset by lower contributions from developments in Frasers Property Australia and Britain.
Frasers Property Australia and Australand together make up Frasers Australand. Earnings per share for the quarter was 4.57 cents in the three months to March 31, up from 3.49 cents in the same period last year, while net asset value per share was $2.20, down two cents from Sept 30 last year.
Frasers Centrepoint group chief executive Lim Ee Seng said in a statement yesterday: "Frasers' performance in the first half demonstrates the benefits of our acquisition of Australand, and reflects our strategy of increasing recurring income."
Frasers Centrepoint is embarking on capital recyling projects to ensure more stable performances from quarter to quarter.
"Contributions from the group's development properties can be lumpy," said Mr Lim, referring to how different properties have different completion dates.
This means some quarters may show a surge in revenue when many projects are completed at the same time.
There is a need "to balance the lumpy contributions from development properties", added Mr Lim.
This has led Australand to enter a deal to sell an office building in Melbourne to Frasers Commercial Trust.
Frasers said this will unlock value for the group and also provide Frasers Commercial Trust unitholders, including Frasers, with higher distributions per unit.
The group's most recent development in Singapore is the 920-unit North Park Residences, with close to 80 per cent of the launched units sold. Its Valley Point Shopping Centre also recently underwent upgrading and construction works.
An interim dividend of 2.4 cents a share was declared, the same as the previous corresponding period. Frasers Centrepoint shares closed up 1.5 cents at $1.835 yesterday.
The Straits Times/ Money Published on Saturday, 9 May 2015
By Rachael Tan email@example.com
Acquisitions boost Frasers' Q2 earnings