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First Sponsor Q3 profit jumps 30.3% on pre-sales of China projects, hotel addition

MAINBOARD-LISTED First Sponsor Group posted a 30.3 per cent surge in net profit to S$33.3 million for the third quarter ended Sept 30, from S$25.6 million in the year-ago period, it said in a bourse filing on Friday morning.

The property developer and financing group said it recorded strong pre-sales for several Chinese projects while its Dutch portfolio was boosted by the acquisition of the 193-room Hampton by Hilton hotel in Utrecht in the Netherlands. 

For its property financing segment, it has fully recovered a 170 million yuan (S$32.8 millio) defaulted loan principal.

Revenue dropped 16.6 per cent to S$44.6 million from S$53.5 million due to lower revenue from sale of properties and property financing, and rental income from investment properties.

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But share of after-tax results of associates and joint ventures jumped to S$15.1 million in the third quarter from S$1.1 million a year ago. 

Earnings per share (EPS) was four Singapore cents, up 8.4 per cent from 3.69 cents a year ago.

No dividend was declared, same as the year before.

The group’s Star of East River and Emerald of the Orient projects in Dongguan continue to generate good cash flows through strong pre-sales performance, said First Sponsor.

"The residential units of The Pinnacle and Wanjiang Victory Land projects in Dongguan are expected to be launched for pre-sales in late 2019/early 2020 and late 2020 respectively," it added.

Meanwhile, the Hampton by Hilton hotel was added to its Dutch property holding portfolio, and the 144-room Crowne Plaza hotel within the same building is expected to commence trading in April 2020.

Neo Teck Pheng, group chief executive officer of First Sponsor, said this is the 19th quarterly growth out of 22 quarters of results reporting since the group’s IPO (initial public offering) in July 2014.

"Following the group’s maiden entry into Australia in late 2018, it is keen to increase its business footprint in the key cities of Australia which may be by way of equity participation in, and financing of, property development projects," Mr Neo said.

"Given the ongoing tightening of the credit market in Australia, the group is upbeat that it will be able to expand its Australia property financing portfolio and/or participate in property holding opportunities for prime real estate properties or developments under the current favourable macroeconomic conditions.

"Armed with a strong balance sheet, the group is ready to capitalise on good business opportunities in the Netherlands, Germany, China and Australia for further growth and expansion."

First Sponsor shares were unchanged at S$1.30 as at 10.25am.