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Aspial Q3 net profit soars to S$18.7m, declares 0.25 cent dividend

PROPERTY developer and jeweller Aspial Corp has made a net profit of S$18.7 million in the third quarter, up from S$70,000 in the same period a year earlier, boosted by revenue from development projects in Singapore and Melbourne. 

Revenue in the three months ended Sept 30 rose 217.2 per cent to S$347 million. Earnings per share was 0.97 Singapore cent from 0.004 cent in the third quarter last year.

Aspial has declared an interim dividend of 0.25 Singapore cent per share. No dividend was declared in the same period last year.

For the nine months ended Sept 30, Aspial made a net profit of S$32.3 million, reversing from a net loss of S$135,000 in the first three quarters last year.

Year-to-date revenue surged 117 per cent to S$771.7 million, led by a 284.6 per cent jump in real estate revenue to S$525.8 million. This was due mainly to the progress recognition of sales from the CityGate project on Beach Road, as well as revenue from the settlement and handover of completed residential units for the Avant and Australia 108 skyscraper projects in Melbourne.

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Revenue from financial services rose 14 per cent to S$158.5 million in the nine months to Sept 30, on higher interest income from pawnbroking and secured lending, and higher sales from the retail and trading of jewellery and branded merchandise.

Revenue from the jewellery business rose 15.8 per cent to S$98.1 million, lifted by the maiden recognition of sales from the Niessing brand and increase in sales from the gold bullion business.

Aspial said that the real estate business is expected to contribute significantly to the group's revenue and profitability up to 2020, as it has locked in about S$680 million of unbilled contracts from Australia 108.

It is aiming to complete the third phase of Australia 108 by the end of this year. The sixth and final stage will be completed in 2020. To date, the construction of Australia 108 has progressed to Level 69 out of 101 levels. 

The group also expects the profit margin of the subsequent phases of the Australia 108 project to be higher than the earlier ones as the average sales per square metre rate for higher floors are better than those for the lower ones. 

The Avant project was completed in August. As the CityGate project is near completion, its revenue contribution in the fourth quarter will be reduced, Aspial said. It continues to record sales for the remaining commercial units albeit at a slower pace.

In the next 12 months, Aspial said it will continue with the sale of the Nova City project in Cairns that is 54 per cent sold based on 101 units launched. The group may also launch the Albert Street project in Brisbane, subject to prevailing market conditions in the city, it said.

In Penang, Aspial has completed the refurbishment, upgrading and building works of some properties and will continue with the construction of some of the remaining properties. Aspial has six hotels (comprising 46 keys with a total of 85 rooms) in operation in Georgetown and plans to open its seventh hotel.

Aspial had total loans and borrowings of S$707.3 million as at Sept 30, S$278.1 million lower than at the end of June, due to the settlement of completed units in Avant and Australia 108 projects. 

About S$363.7 million of the total loans and borrowings are property development-related loans, while the balance of S$343.6 million are mainly working capital or mortgage loans for the other business, as well as investments in properties and securities.

As at Sept 30, Aspial has outstanding term notes and bonds of S$643.8 million (including S$70 million that was issued by Maxi-Cash Financial Services), down S$17 million over the last quarter due to open-market purchases of bonds by the group.

Aspial expects to improve its debt and cash profile in the next three months as it looks to receive up to S$228 million of proceeds from the settlement and handover of units for Avant and Australia 108. It also expects to obtain the Temporary Occupation Permit for the CityGate project by end-2018, at which point it will repay all CityGate development loans.

The company said it intends to use part of the cash proceeds to purchase some of its outstanding term notes and bonds due in 2019 and 2020, prior to their maturity. 

Net asset value per share was 17.64 Singapore cents as at Sept 30, from 17.40 cents as at Dec 31 last year.

Aspial shares fell half a Singapore cent or 2.08 per cent to S$0.235 on Wednesday before results were announced after market close.

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