Centurion Corporation H2 earnings down 12% to S$38.5 million 

CENTURION Corporation : OU8 0% on Tuesday (Feb 28) reported a net profit of S$38.5 million for the second half of the year ended December 2022, down 12 per cent from earnings of S$43.9 million in the corresponding period in 2021. 

Revenue for the period was up 15 per cent at S$89.9 million from S$78.3 million, which the group attributed to the stronger demand for workers and student accommodation across all geographies during the second half of the year amid the lifting of Covid-19-related restrictions.

However, bottomline figures were bogged down by a reduction of Covid-related grants, higher admin and distribution, as well as finance expenses.

The group also booked a lower net fair-value gain of S$9.4 million in H2, versus a gain of S$11.4 million in the same period in the prior year. The fair-value gain was a reflection of market conditions, said Centurion.

For the full year, earnings were up 36 per cent at S$71.4 million, while revenue came in 26 per cent higher at S$180.5 million. 

The group’s portfolio of purpose-built student accommodation (PBSA) assets in Australia, as well as its purpose-built workers’ accommodation (PBWA) assets in Singapore and Malaysia, have seen a “healthy recovery in financial occupancy” in H2 compared to the same period in 2021, the group said. 

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The group’s PBSA segment in Australia saw a growth in financial occupancy to 86 per cent in H2, from 25 per cent in H2 2021. The financial occupancy for the Singapore PBWA segment – which consists of five purpose-built dormitories and four quick-build dormitories – had also fully recovered to pre-pandemic levels during the second half as more migrant workers had to be brought in to Singapore to complete projects which had been delayed or deferred due to the pandemic. 

Over in Malaysia, purpose-built dormitories’ occupancy also rose to 89 per cent from 77 per cent amid the easing of border restrictions and gradual increases in numbers of migrant workers returning to the country from Q3 last year. 

Centurion’s PBSAs in the UK also registered a higher occupancy rate of 91 per cent in H2 versus 82 per cent in the same period in 2021 with higher rental rates, although a weaker British pound moderated revenue contributions of this segment. 

The board of directors has recommended a final dividend of S$0.005 per share for FY2022, unchanged from the final dividend for 2021. The dividend, which is subject to shareholder approval at the annual general meeting on Apr 27, will be paid out on May 31. 

Looking ahead, the company noted that macroeconomic headwinds remain amid inflationary pressures, rising interest rates and geopolitical tensions, even as the global recovery from the Covid-19 pandemic continues. 

“Inflationary pressures and rising interest rates will add to operating costs and financing expenses, which the group expects will be offset by positive rental rate reversions across its markets,” said Centurion. 

The company added that it will continue to pursue the strategic review of its specialised accommodation portfolio, as part of its efforts to effectively execute capital recycling and capital reallocation towards higher-yielding markets and assets. 

Shares of Centurion rose 1.4 per cent or S$0.005 to close at S$0.37 on Tuesday.