Fragrance Q3 revenue sinks but profit soars on fair value gain
This is largely due to permission to change the use of land to hotel in an investment property
Singapore
PROPERTY developer Fragrance Group posted a net profit of S$98.4 million for the third quarter, about 41 times the S$2.4 million profit a year ago.
This was despite revenue tumbling 64.6 per cent amid a sharp decline in contribution from the property development segment.
The improved earnings for the three months ended Sept 30 came on the back of S$110.9 million in other operating income, compared to other operating loss of S$104,000 a year ago.
This was largely thanks to a fair value gain on Fragrance's investment property located on Lot 01958P MK01. Fragrance had obtained provisional permission for a hotel development on the site, and the change of use substantially increased the property's underlying land value, which was accounted as a fair value gain of some S$117 million in Q3.
Earnings per share stood at 1.46 Singapore cents for the quarter, up from 0.03 cent a year ago.
Group revenue sank 64.6 per cent to S$15.8 million from S$44.7 million in the corresponding period last year. This was mainly due to an 89.8 per cent decline in contribution from the property development segment to S$3.3 million, from S$32.4 million a year ago.
Two new development projects in Singapore, Jervois Treasures and Urban Treasures, are in their early stages with no revenue contribution to-date, Fragrance said.
Hotel operations at ibis Styles Hobart in Australia and The Imperial Hotel in the UK contributed S$5.5 million in revenue during the quarter, largely steady from a year ago.
Meanwhile, revenue from the commercial investment segment fell 6.2 per cent to S$5.6 million, as Tower 15's redevelopment plans are in progress. However, overall occupancy improvement for the group's commercial investment properties.
Fragrance also said on Thursday that it recently contracted to sell a commercial property at 168 Changi Road for S$28.8 million, and the sale is expected to be completed in the fourth quarter. The Business Times had on Nov 2 reported on the deal, and the buyer of the five-storey freehold building is understood to be Pergas Investment Holdings, which offers financial shariah advisory and consultancy, among other things.
Fragrance shares closed at 12.9 Singapore cents on Friday, up 0.3 cent or 2.4 per cent.
