Aspial profit slides 55.2% on weaker real estate business

Singapore

ASPIAL Corporation posted on Monday a 55.2 per cent drop in net profit to S$12.7 million for the year ended Dec 31, mainly due to lower revenue as a result of weaker performance from its real estate business.

Earnings per share stood at 0.66 Singapore cents for the year, down from 1.46 cents for 2018.

Revenue fell 37.6 per cent to S$560.2 million from S$898.5 million previously due to lower revenue from the group's real estate business.

Revenue from the real estate business fell by S$363.3 million to S$210.9 million, due to the completion of fewer development projects during the year.

The group's financial services business rose by S$14.8 million to S$218.5 million, due to higher interest income and sales from the retailing and trading of jewellery and branded merchandise.

Meanwhile, the group's jewellery business rose slightly to S$139.8 million from S$135.8 million in 2018, boosted by sales from overseas operations but partially offset by lower sales from the group's Singapore operations.

A final cash dividend of 0.25 Singapore cent per share was proposed, unchanged from a year earlier. The record date and payment date will be announced at a later date, the group added.

On its real estate business outlook, the group said it is expecting to realise around A$357 million (S$330.1 million) from the settlement and handover of units for its Australia 108 project in the next 12 months.

The project, which is expected to be completed in the third quarter of this year, will contribute positively to the group's revenue and profitability in fiscal 2020, the group added.

Aspial is also expecting its hotel portfolio in Penang to increase to 350 keys by end 2020, from 72 keys currently across seven hotels in George Town, Penang.

For its jewellery business, Aspial is expecting consumer sentiment to remain weak in Asia in the near future in view of the Covid-19 virus outbreak. It added that it would work on improving the segment's operational effectiveness and efficiency.

The core hotel and serviced residence business of AF Global is also expected to be affected by the virus outbreak due to a slowdown in global travel demand. Aspial said it is putting in place strategies to manage its hospitality assets and mitigate the impact of weaker demand.

The group is also planning to grow its core business of pawnbroking and retailing of new and pre-owned merchandise despite keen competition and increasing operating costs. It added that it will continue to invest in brand building, improving its merchandise range and reviewing the retail network to keep the growth momentum.

Aspial shares closed down 0.2 cent, or 1.25 per cent, to S$0.158 on Tuesday.