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Bonvests' Q2 profit rises 17.1% as lower expenses offset revenue slowdown

BONVESTS Holdings' second-quarter net profit rose 17.1 per cent to S$7.97 million, or 1.982 Singapore cents per share, as lower operating expenses helped to offset a slowdown in the rental, industrial and hotel businesses.

For the six months ended June 30, net profit slipped 4.9 per cent to S$13.9 million, or 3.46 Singapore cents per share, the diversified property company announced on Tuesday after the market closed.

Revenue shrank 2.7 per cent to S$49.5 million in the second quarter, as property rental income decreased by 11.8 per cent to S$6.2 million due to the absence of properties that had been sold.

Industrial revenue slipped 2.4 per cent to S$17.1 million with fewer contracts secured, while hotel revenue declined by one per cent to S$25.8 million amid weaker performance in Australia and Singapore.

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Bonvests managed to grow operating profit by 10 per cent to S$10.7 million, however, in the absence of a year-ago S$2 million fair-value loss on investment properties.

Looking ahead, Bonvests expects the Singapore rental market to be stable, while "challenging" conditions are foreseen for the hotel division.

Cost management will be a priority for the industrial arm amid competitive market conditions, while the investment division is expected to have muted performance with a smaller portfolio and market volatility.