Bonvests Holdings Q1 net profit flat on higher fair value loss

MAINBOARD-LISTED Bonvests Holdings Ltd on Monday reported a flat net profit for the first three months of the year, even as its revenue grew year on year.

First-quarter net profit was down 0.4 per cent year on year to S$7.8 million, weighed down by higher finance costs and higher fair value loss.

Earnings per share was 1.946 Singapore cents.

Revenue for the quarter came in at S$59 million, up 15.9 per cent, due mainly to higher revenue from its property - rental, industrial and hotel - divisions. But this was partly offset by lower revenue from the investment division.

Finance costs for the period ended March 31, 2016 went up to S$1.6 million from S$0.6 million a year ago, due mainly to higher borrowings and higher interest rates.

Earnings was dragged by the investment division which recorded a segment loss of S$0.96 million for the quarter from the S$0.09 million loss a year ago, due mainly to higher fair value loss in Q1 2016 on the market value of quoted equities.

Revenue for the investment division also fell 58.8 per cent to S$0.007 million, due mainly to absence of sale of securities and interest income.

The group's property - rental division recorded a 7 per cent rise in profit to S$4.9 million on the back of higher rental revenue, while profit from its hotel division rose 28.8 per cent to S$5.4 million.

Its industrial division recorded a profit of S$2.9 million in Q1, up 26.7 per cent from the corresponding period in 2015, largely due to the increase in revenue and income from government grant.

In its outlook, the group said the property rental markets in Singapore and Tunis are expected to remain stable in the near term.

The acquisition of the commercial properties in Perth, Australia, was completed on Feb 24, 2016, and is expected to contribute to rental income, it noted, adding that the market conditions in the countries in which the hotel division operates are expected to remain challenging.

"Construction has commenced for the group's hotel in Bintan, the second hotel in the Maldives and the hotel in Douz, Tunisia. The industrial division will continue to be prudent in its costs management and will optimise its resources due to competitive market conditions."

The group added that the performance of the investment division "will continue to be affected by volatility of the various stock markets".