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First Sponsor Q1 profit rises 4.8% to S$24.9m

MAINBOARD-LISTED First Sponsor Group posted a 4.8 per cent rise in net profit to S$24.9 million for its first quarter ended March 31, 2020, from S$23.8 million a year ago.

This comes as the property developer recorded a rise in revenue from property financing, according to its voluntary interim update on Tuesday.

Earnings per share stood at 2.94 Singapore cents for the quarter, down from 3.43 cents a year ago.

Revenue for Q1 rose 1.1 per cent to S$45.8 million, from S$45.3 million a year ago, driven mainly by revenue from property financing.

Property financing revenue rose to S$26.7 million from S$23.5 million a year ago due to a one-off establishment fee from the provision of a A$370 million (S$339.2 million) construction facility to fund the redevelopment of City Tattersalls Club in Sydney.

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No dividend was declared for the quarter, unchanged from a year ago. 

First Sponsor said in its update that it successfully issued five-year S$100 million medium-term notes at a coupon rate of 3.29 per cent per annum during the quarter.

The group completed the refinancing of its committed revolving credit facilities with two banks for a total amount of S$193.3 million in April 2020, with a higher gearing loan covenant which further extended the group's debt maturity profile.

First Sponsor said these committed bank lines with a less restrictive loan covenant, along with a strong balance sheet, will help the group weather the period of uncertainty amid the Covid-19 pandemic, and allow it to capitalise on good business opportunities when they arise.

Operations were temporarily suspended for 13 out of the 16 hotels the group owns and operates. These include Holiday Inn Express Wenjiang Chengdu Hotel, Bilderberg Bellevue Hotel Dresden in Germany and the 11 hotels in the Dutch Bilderberg hotel portfolio.

Crowne Plaza Chengdu Wenjiang Hotel, Hilton Rotterdam and Hampton by Hilton Utrecht Centraal Station remain open with low occupancy rates.

First Sponsor said it would apply to the Dutch and German authorities under relevant wage subsidy programmes to mitigate operating losses of its Dutch and German hospitality operations respectively. 

The group said it has received requests for rental concessions from some tenants of its European property portfolio. It added different business plans have been adopted to help certain tenants, depending on previous business conduct and circumstances. 

On its outlook, the group said the full extent of the Covid-19 crisis' impact on its financial performance for the next few quarters - especially regarding its hospitality operations, cannot be determined at this junction. 

However, the group is "cautiously optimistic" that the novel coronavirus situation may also create new deal opportunities, whether during or in the aftermath of the crisis.

The group said it may raise additional cash by tapping the debt and equity capital markets to allow it to take advantage of such opportunities when they arise.

First Sponsor further disclosed that its proposed final dividend of 1.6 Singapore cents per share for fiscal 2019 will be tabled for approval by shareholders at the group's annual general meeting on May 20.

First Sponsor shares closed flat at S$1.12 on Monday.

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