Far East Orchard back in the black with Q1 net profit of S$2.6m

MAINBOARD-LISTED real estate player Far East Orchard (FEOR) was back in the black in the first quarter on the recognition of a sale and unrealised foreign exchange gains as the Australian dollar strengthened, according to a business update released on Friday (May 6).

FEOR reported a net profit of S$2.6 million for the 3 months to Mar 31, 2022, compared with a loss of S$0.7 million in the year-ago period. Revenue grew by 7.6 per cent to S$29.7 million.

The results were lifted in part by the recognition of the sale of FEOR’s reversionary interest of about one and a half years in Village Residence Clarke Quay in March, for S$1.8 million.

Separately, FEOR called its purpose-built student accommodation business (PBSA) resilient, and added that its hospitality segment “showed an improvement in performance”, with business strengthening in March despite a soft start to the year during the Omicron virus surge.

The group, which entered the PBSA market in the United Kingdom in 2015, said in its outlook statement that it remains confident in the outlook of this business, as projected growth in the number of international students “will support the strong occupancy levels and rental growth”.

Its PBSA portfolio in the UK had reservations of more than 80 per cent for the upcoming academic year as at end-March 2022, which was higher than the year-ago period, it said.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

FEOR also reported that its hospitality business in Australia “is witnessing a positive trend in domestic bookings”, with a further boost from the recovery in international flights.

Its Australian joint venture opened 3 hotels in the quarter for an added 494 rooms in all; another 2 hotel openings are scheduled for the second half of the year in Australia.

The group’s Singapore hospitality business is also expected to see stronger demand from both corporate and leisure bookings as borders reopen. However, FEOR noted that the major source market of mainland China still remains largely closed to outbound travel.

Group chief executive Alan Tang said in a statement that FEOR “is gearing up to recapture pent-up travel demands” as international borders reopen, and reiterated a strategic focus on strengthening the group’s lodging platform for sustainable long-term growth.

FEOR shares shed S$0.01 or 0.90 per cent to S$1.10 on Friday, before the results.