Currency gains boost Yoma's Q3 earnings

Singapore

RIDING on currency translation gains, Yoma Strategic Holdings' net profit for its fiscal third quarter ended Dec 31, 2014 (Q3 FY2015) surged 49.8 per cent year-on-year to S$7.8 million.

Net profit for the first nine months of the fiscal year thus more than doubled to S$19.9 million from $9.5 million.

Unrealised translation gains of monetary assets denominated in the US dollars translated to currency gains of S$3.21 million, resulting in net "other gains" climbing to S$3.8 million from S$886,000 a year earlier.

But revenue for the quarter fell 17.2 per cent to S$25 million due to the lower revenue recognition from Star City. In Q3 FY2014, revenue was buoyed by the sale of Star City Zone B land development rights (LDRs). This was partially mitigated by stronger sales recorded in Pun Hlaing Golf Estate (PHGE), rental income from PHGE and Star City, as well as higher contributions from its non-real estate businesses, Yoma said.

Still the largest revenue driver of the group, the real estate division, contributed S$20.8 million or 83.1 per cent of the group's third-quarter revenue, thanks to the launch of new residential projects and rental portfolio gaining traction.

Gross profit margin improved to 48.7 per cent in the quarter, up from 44.3 per cent in the year-ago period, due to sales of higher-margin PHGE LDRs and residences.

Yoma's chief executive Andrew Rickards said that he expects revenue from Star City "to improve in the next quarter as we recognise the fees for managing the construction of Star City Zone C". The latter will be launched on Feb 14.

Star City Zone B is now at the tail-end of its sales cycle. The group has sold 927 units and received booking deposits for an additional 46 units out of 1,043 units at Star City Zone B since its launch in April 2013.

In the third quarter, revenue from Yoma's "Balloons Over Bagan" tourism business, which runs from October to March every year, accounted for 13.8 per cent of its revenue and recorded a 67.8 per cent year-on-year jump to S$3.4 million on the back of the growing tourism market in Myanmar.

"Positive momentum from our non-real estate segment is expected to continue in the next quarter driven by another robust peak season of our Balloons Over Bagan tourism business, as well as the completion of more telecommunication towers," Mr Rickards said.

Yoma also announced on Monday that its one-for-three rights issue is 46 per cent over-subscribed. With each new rights share priced at 38 cents, the rights issue has raised some S$164.4 million.

The net proceeds of S$163.9 million will be used to purchase the Landmark Development site, additional LDRs in Pun Hlaing Golf Estate and the New Holland Tractor business, it said.

The 432.5 million rights shares are expected to be listed and quoted on the Singapore Exchange mainboard with effect from Tuesday morning.

Yoma shares edged up 0.96 per cent to 52.5 Singapore cents on Monday.