First Sponsor Q4 profit falls 41.5% in absence of one-off gain; announces rights, bonus issues

DESPITE a big jump in revenue, mainboard-listed First Sponsor Group saw earnings fall 41.5 per cent to S$42.7 million for its fiscal fourth quarter from the year ago period.

The property group, whose key shareholders are City Developments Limited and Tai Tak Estates Sdn Bhd, attributed the drop to the absence of a one off gain of S$97.3 million arising from the partial Star of East River Project divestment in fiscal 2016's fourth quarter.

However, for the three months ended Dec 31, revenue rocketed 660.3 per cent to S$180.3 million year-on-year, it said a pre-market filing on Thursday.

The rise in revenue for the fourth quarter was mainly due to increased contributions from its property development segment with a higher number of residential units from the Chengdu Millennium Waterfront project being handed over in the fourth quarter when compared with the year ago period, it said.

The quarterly bottomline was also boosted by recognition of net penalty interest of 107.9 million yuan (S$22.0 million) upon the successful recovery of defaulted loans of 235.4 million yuan in total and extension of interest bearing loans to the FSMC Group for the acquisition of the Bilderberg Portfolio, the company added.

Full-year net profit was 21.9 per cent lower at S$88.3 million while revenue rose 93.1 per cent to S$384.4 million from the previous year.

Earnings per share (EPS) for the fourth quarter sank to 7.23 Singapore cents from 12.36 Singapore cents from the year ago period. For fiscal 2017, EPS slid to 14.97 Singapore cents from 19.17 Singapore cents in fiscal 2016.

Net asset value per share edged up to 183.13 Singapore cents as at Dec 31, from 177.1 Singapore cents three months ago.

First Sponsor also said on Thursday it will undertake a renounceable 1-for-4 rights issue of 3.98 per cent perpetual convertible capital securities to raise net cash proceeds of approximately S$161.5 million.

It said the fund raising exercise will further strengthen its balance sheet so that the group "can capitalise on any available expansion opportunity." In the last two months, the property group made four acquisitions amounting to approximately S$349.2 million in the Netherlands, Germany and China. The acqusition of Le Meridien Frankfurt in Germany was its first foray into the German real estate market.

First Sponsor also announced a 1-for-10 bonus issue for fiscal 2017 to reward shareholders.

This is on top of a final dividend of 1.2 Singapore cents per share, bringing the dividend for fiscal 2017 to a total of 2.2 Singapore cents per share or a 10 per cent increase from a year ago.

First Sponsor shares were trading up 1.5 per cent at S$1.40 as of 9:40am.