Centurion Q1 net profit falls 13.7% to S$7.9m on higher costs, expenses

FIRST-quarter net profit for student and worker dormitory operator Centurion Corporation dropped 13.7 per cent to S$7.9 million from the year-ago period, due to higher cost of sales, administrative and finance expenses. For the three months ended March 31, revenue expanded 3.9 per cent to S$31.3 million from the year-ago period, due to revenue contributions from dwell Princess Street in the United Kingdom which was acquired towards the second half of fiscal 2018, as well as rental rate increases from the group's UK assets. 

Occupancy and rents for the company's existing portfolio of worker and student accommodation assets have continued to remain stable, it said on Friday.

But the higher costs were because of startup expenses incurred for the group's new operating assets dwell East End Adelaide, dwell Dongdaemun and Westlite Bukit Minyak. There were also higher finance and administrative expenses due to higher interest rates as compared to the year-ago period, as well as higher interest expense on additional borrowings to fund the new assets.

Earnings per share slid to 0.94 Singapore cent from 1.09 cents in the previous year.

The group said in a statement: "Moving forward, the group will continue to selectively explore opportunities to grow its accommodation business in existing and new markets, while simultaneously exploring further growth opportunities through asset-light strategies. While the group remains focused on specialised accommodation assets within the purpose-built student accommodation assets and purpose-built worker accommodation asset sectors which generate stable, recurring income streams, it will also consider opportunities to invest in new specialised accommodation types."

Separately, the group on Friday also announced that its managing director of the accommodation business Tony Bin has resigned after eight years in the role. Mr Bin is the brother-in-law of Centurion controlling shareholder David Loh.

Centurion shares closed at S$0.42 on Friday, up 0.5 Singapore cent or 1.21 per cent before the announcements were made.