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First Sponsor's H1 net profit jumps nearly 50% to S$58.1m

FIRST Sponsor Group on Thursday posted a 49.4 per cent rise in net profit to S$58.1 million for the six months ended June 30, from S$38.9 million a year ago. 

The property group achieved a higher overall gross margin of 80.7 per cent in H1, compared to 69.2 per cent a year ago. It said this was due mainly to a change in sales mix, as the higher-yielding property financing business contributed a larger share of the total revenue in the current period.

In addition, carpark sales were recognised at a 100 per cent gross profit margin, since the carpark lots were carried at zero book costs, it added.

Earnings per share stood at 6.9 Singapore cents for the half year, up from 5.35 cents a year ago.

Revenue for H1 fell 16.5 per cent to S$104.1 million, from S$124.8 million a year ago. This was due to a decline in revenue from the sale of properties (S$28.6 million), hotel operations (S$13.2 million) and rental of investment properties (S$2.2 million).

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The drop was partially offset by a S$23.3 million increase in revenue from property financing, First Sponsor said.

An interim cash dividend of 1.1 Singapore cents per share was declared for the half year, unchanged from a year ago. The dividend will be paid on Oct 1, after books close on Sept 17. 

First Sponsor group chief executive officer Neo Teck Pheng said the company will undertake a one-for-four bonus issue of free warrants to "reward shareholders for their continuing support and participation".

Each warrant is exercisable into one new share at S$1.08 each.

He said the group is "cautiously optimistic" that the Covid-19 pandemic may bring "new opportunities, whether during or in the aftermath of the crisis".

"With a strong balance sheet, undrawn committed long-term debt facilities and potential equity infusion from the exercise of outstanding warrants as well as warrants to be issued pursuant to the aforesaid bonus issue, the group is well equipped financially to enable it to take advantage of such opportunities when they arise," Mr Neo added.

Shares of First Sponsor were trading flat at S$1.12 as at 9.20am on Thursday, after the results were announced.

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