Far East Orchard reverses out of the red with H1 earnings of S$8 million

REAL estate group Far East Orchard has posted earnings of S$8 million for the first half ended June, improving from a net loss of S$1.9 million recorded in the year-ago period.

Revenue rose 15.9 per cent to S$63.7 million in H1, from S$54.9 million a year ago.

This was mainly due to stronger operating performance from the hospitality segment as borders opened and global travel picked up in the second quarter, the group said in a bourse filing on Wednesday (Aug 10).

In Singapore, the group said its hospitality business also continued to be supported by government isolation contracts in H1. It added that this is expected to extend to the end of 2022.

Meanwhile, its purpose-built student accommodation (PBSA) segment also contributed higher revenue on the back of a higher occupancy rate of 85 per cent for the academic year started September 2021.

“We have seen encouraging results in the second quarter as international travel recovery picked up. However, as optimism builds, we remain cautious and are prepared to tackle the increased global macro-economic challenges and uncertainties that could affect our business,” said Alan Tang, group CEO of Far East Orchard.

Moving forward, the group said it is launching 2 Australian hospitality brands – Vibe Hotels and Adina – in Singapore in the second half of 2022.

The former 88-key Regency House was rebranded to Adina Serviced Apartments Singapore Orchard in July, while the 256-key Elizabeth Hotel will be rebranded to Vibe Hotel Singapore Orchard in the last quarter of 2022.

Far East Orchard said the move, which was a collaboration between hospitality arm Far East Hospitality and joint venture entity Toga-Far East Hotels, is in line with efforts to diversify its source markets and attract Australian inbound tourists.

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Shares of Far East Orchard closed flat at S$1.06 on Wednesday.