First Sponsor Group posts 18% increase in full-year net profit to S$121m

PROPERTY developer First Sponsor Group reported S$121 million in net profit for the full year ended Dec 31, 2021, up 17.7 per cent from S$103 million in the year-ago period, the company said in a bourse filing after market hours on Friday (Feb 11).

The company, which is engaged primarily in business in China, announced a second interim cash dividend of 2.35 Singapore cents for FY2021, in lieu of a final dividend. This brings the total dividend declared for the year to 3.45 Singapore cents.

Revenue for the year was up 189 per cent to S$589 million, led by strong growth from sale of properties.

Revenue from this particular segment increased by 628 per cent or S$358 million to S$415 million, due mainly to the first handover of 6 residential apartment blocks of The Pinnacle in Dongguan, as well as the handover of loft units in the Millennium Waterfront project in Chengdu.

Revenue from hotel operations climbed 27.8 per cent to S$42 million, mainly due to a pick-up in performance of hotels in China and Europe as Covid-19-related travel restrictions eased. Rental income from investment properties went up 47.1 per cent to S$13 million. Revenue from property financing was up 13.1 per cent to S$119 million.

Administrative expenses went up 25.8 per cent to S$36.1 million mainly due to higher staff costs, while selling expenses were up 74.2 per cent to S$10.2 million.

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The group achieved a lower overall gross profit margin of 41 per cent in FY2021, compared to 84.3 per cent in FY2020. It attributed this to a change in sales mix, with the lower-yielding property development business contributing a larger share of total revenue in the current year.

Earnings per share for the full year stood at 13.26 Singapore cents, compared with 11.97 Singapore cents in FY2020.

Group chief executive officer Neo Teck Pheng said First Sponsor's property development business segment will remain active in the coming year, with the group expecting to launch new pre-sales for 5 projects in China.

The property financing business in China achieved a record full-year average loan book of 2.7 billion yuan (S$571 million) for FY2021. With an improving credit liquidity situation in the country, however, the challenge for the group would be to maintain a similar average loan balance in FY2022, Neo said.

In the Netherlands, the group has entered into agreements with main contractors for the Dreeftoren Amsterdam redevelopment project, for which construction is expected to begin in the first quarter of 2022.

The group remains optimistic about the recovery of Europe's hospitality business in the mid to long term, Neo said. He added that it is discussing with business partners to increase its current 31.4 per cent equity interest in the Dutch QBN hotel portfolio.

First Sponsor's shares ended Friday down 0.75 per cent or S$0.01 at S$1.33.