BANYAN Tree's net profit sank 87 per cent year on year to S$535,000 for the first quarter ended March 31, 2016, dragged down in part by higher foreign exchange losses.
The quarter saw a foreign exchange loss of S$2.7 million in Q1 FY16 as opposed to foreign exchange gain of S$1.8 million in Q1 FY15.
In addition, lower operating profit from fee-based segment, lower other income, higher depreciation expense and higher finance costs were recorded.
Revenue rose 2 per cent to S$99.81 million mainly due to higher revenue from the property sales segment.
Earnings per share were 0.07 cent, versus 0.53 cent a year ago.
"The global economy remains weak and uncertain," Banyan Tree said. "For 2Q16, hotel forward bookings for Thailand have also improved but is currently weak for hotels outside of Thailand. Overall forward bookings for owned hotels is currently 9 per cent below the same period last year.
"Our design and project management business where we derived fees from owners in new development projects will continue to slow down in view of the economic slowdown in China."
It added that property sales momentum was "encouraging" given the weak global economy. Deposits for 39 units with total sales value of S$27 million were received in Q1 FY16 as compared to 33 units of S$17.5 million in Q1 FY15. Unrecognised revenue is S$79 million as at March 31, 2016, with approximately half to be progressively recognised in FY16.
"Against this backdrop, and coupled with 2Q16 and 3Q16 being normally low season periods, the performance for the next two quarters are likely to be below 1Q16," Banyan Tree added.