First Sponsor posts 15% rise in Q3 profit

First Sponsor marked a 15 per cent rise in net profit for the third quarter ended Sept 30 to S$17.1 million, thanks to stronger performance in both its property business and property financing business segments.

Group revenue during the quarter jumped 31.6 per cent to S$72 million during the quarter, on the back of higher revenue from the sale of properties, rental income from investment properties, hotel operations and revenue from property financing.

First Sponsor chief executive Neo Teck Pheng noted the group's strategy to enhance its recurring income base has started to take shape.

"Both the property holding and property financing business segments have grown significantly, broadening our recurrent income base which resulted in less volatility in our earnings," he said.

"The two Dutch property acquisitions in the first half of the year and the significant growth in the average property financing loan book are the key contributing factors to the good performance of the two business segments."

Its rental income from investment properties surged to S$3.6 million from S$400,000 a year ago as it recognised contributions from recently acquired office building Zuiderhof I and hotel property Arena Towers located in Amsterdam.

Revenue from the sale of properties in the third quarter grew 20.6 per cent year on year to S$58 million, as the group recognised revenue from the sale of residential and commercial units of the Millennium Waterfront project, where the keys were handed over to the purchasers from December 2014.

First Sponsor also saw a 65.2 per cent year-on-year surge in revenue from property financing to S$9.4 million in the third quarter, thanks to more interest income generated from secured entrusted loans to third parties given an enlarged loan portfolio.

As of Sept 30, the group has S$660.5 million of cash, monetary loan receivables and unutilised committed credit facilities.

With a low gearing ratio of 16.7 per cent and conservative interest cover of over 40 times, the group said it is ready to gear up for its continuing expansion in the Netherlands and China.