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ARA Asset Management's Q2 earnings up 18% on higher fees

Tuesday, August 2, 2016 - 18:01
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ARA Asset Management on Tuesday posted a 9 per cent increase in revenue to S$40.3 million for its second quarter ended June 30, 2016.

ARA Asset Management on Tuesday posted a 9 per cent increase in revenue to S$40.3 million for its second quarter ended June 30, 2016.

Net profit attributable to shareholders also rose 18 per cent to S$19.3 million, while earnings per share rose to 1.94 Singapore cent, up from 1.9 cent a year ago.

Its better performance was due to the higher recurrent management fees that it received in the quarter. This increased 6 per cent to S$33.6 million, thanks to higher Reit management fees and portfolio management fees.

Higher Reit management fees were a result of better asset performance which raised the valuations of the property portfolios after renovations. The quarter also saw fee contribution from Suntec Reit's acquisition of three floors of office space at Suntec Tower Two and Cache Logistics Trust's acquisition of three Australian properties in Q4 2015.

Higher portfolio management fees came from ARA China Investment Partners' acquisition of two commercial properties in China in September and December 2015, as well as the launch of the Harmony III and the Harmony V funds in August and December 2015 respectively, along with contribution from the Peninsula Investment Partners.

ARA is a real estate fund management company that manages six Reits publicly listed in three countries, and three privately held Reits in South Korea. It also manages private real estate funds and provides property management services and convention and exhibition services.

It has also declared an interim dividend of S$0.023 per share, on a par with a year ago. This will be paid on Aug 23; the books will close on August 11.

The stock rose half a cent on Tuesday's stock market to close at S$1.32.