Centurion posts higher Q1 revenue but expects Covid-19 to push up operating costs

CENTURION Corp on Thursday posted higher first-quarter revenues on the year for its key student and worker accommodation businesses, but flagged that there have been disruptions due to Covid-19 and that operating costs are set to rise. 

The group's purpose-built workers' accommodation business saw revenue rise 15 per cent year on year to S$22.8 million, accounting for 64 per cent of overall revenue for the quarter ended March 31. 

Likewise, revenue for the student accommodation business went up 13 per cent year on year to S$12.4 million, accounting for 35 per cent of overall revenue for the quarter. 

"While the financial occupancy of our workers portfolio has not been impacted thus far, there are disruptions to the operations due to Covid-19 and operating costs are expected to increase," said chief executive Kong Chee Min in a business update. 

The student portfolio has also encountered lower demand and rent-waiver requests, which may continue if universities do not resume on-campus education. Centurion said it may also receive requests to defer rental from customers in financial distress.

In its main market of Singapore, Centurion recently held off redevelopment plans for its workers' dormitory in Toh Guan after the site was declared a Covid-19 cluster. 

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Last month, it  said it will allow those residing at its UK student accommodation the option to terminate their remaining lease early for the current academic year. The group anticipates a reduction in revenue of between £3 million (S$5.3 million) and £5 million (S$8.8 milion) for the period, depending on the number of residents taking up the offer. 

Centurion has therefore worked with banks for support on loan-repayment moratoria. In addition, "future expansion plans have to be put on hold across markets and will only be revisited and recalibrated when markets return to normalcy," Mr Kong said.