REAL estate group Far East Orchard posted earnings of S$8.2 million for the first half ended June, up 2.1 per cent year on year from S$8 million last year, on the back of a tourism recovery. 

Revenue surged by 42.7 per cent to S$90.9 million in H1, from S$63.7 million in the year-ago period. 

In a bourse filing on Tuesday (Aug 8), the group attributed its revenue growth to the hospitality business, which increased 70.7 per cent year on year to S$62.3 million as international travel continued to recover post-pandemic, driving higher occupancies and room rates. 

It also came from a lower base in the first quarter of FY2022, when the business was impacted by omicron-triggered restrictions and borders. 

Meanwhile, business from its purpose-built student accommodation business inched up by 6.4 per cent to S$23.7 million in the half year – fuelled by a slowdown in the supply pipeline and rise in student numbers. 

Total expenses grew by 21.6 per cent to S$37.8 million in H1, from S$31 million in the corresponding period last year. This was mainly due to higher finance costs stemming from rising interest rates and higher operating expenses incurred on the hospitality operations as revenue ramped up. 

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The expenses were partially offset by lower marketing costs in H1, the real estate group added. 

As the tourism sector continues to recover, Far East Orchard remains “cautiously confident” for the rest of its 2023 financial year. 

“With the macroeconomic uncertainties ahead of us, we expect the operating environment to remain challenging,” said Alan Tang, chief executive officer of Far East Orchard. 

“Nonetheless, we will continue to focus on revenue growth to counter the inflation across our businesses while driving operational efficiencies and managing costs.”

Shares of Far East Orchard closed 1 per cent or S$0.01 lower at S$1.02 on Tuesday, prior to the announcement.