Far East Orchard's full-year net profit rises to S$28.1m on fair-value gains

[SINGAPORE] Far East Orchard's net profit for the financial year ended Dec 31, 2021 rose to S$28.1 million, from S$1.5 million the previous year, primarily on the back of fair-value gains on investment properties.

Excluding the S$44.8 million in fair value and other gains, the group would have been in a net-loss position for FY2021.

Earnings per share worked out to 6.12 Singapore cents, higher than the 0.35 cent of the previous year.

Revenue dipped 4.8 per cent to S$106.8 million for the full year from S$112.2 million the year before.

The decline was mainly due to the impact of the pandemic on the group's hospitality business, as well as the lockdowns and border closures which have impeded tourism. This was partially mitigated by the demand for accommodation facilities for isolation purposes, and from companies looking to house foreign workers in Singapore, said the group in a statement on Thursday (Nov 24).

Contributions from its purpose-built student accommodation (PBSA) business also helped offset some of the losses from the hospitality segment.

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Despite the ongoing Covid-19 impact on the business and the uncertainty of the recovery, the company said that it remains committed to delivering sustainable shareholder value. The board has therefore recommended a first and final dividend of 3 Singapore cents for FY2021, unchanged from the previous year.

Far East Orchard expects the group's financial performance to remain under pressure as the travel and tourism sector remains subdued.

However, the PBSA sector remains resilient, given that the UK has reduced the number of travel restrictions which could potentially attract more international students.

Group chief executive of Far East Orchard, Alan Tang said in a press statement: “In the face of a challenging environment, our team actively took steps to mitigate the headwinds posed by Covid-19. The hospitality sector continues to be weighed down by changing Covid-19 restrictions. However, we will continue to persevere with our current momentum and stand ready to steer our business through these times.”

Shares of Far East Orchard ended Thursday S$0.05 or 4.4 per cent lower at S$1.10.