Fragrance's Q2 net profit dives 75.9%

ALONG with fewer ongoing development projects, Fragrance Group reported a 75.9 per cent slump in net profit for the second quarter ended June 30 to S$3.65 million.

Revenue took a hit, slipping 66.9 per cent from a year ago to S$30.67 million, with the property development segment accounting for 85.5 per cent of group revenue.

Construction for residential project City Gate, where the group has a 50 per cent stake, started in the second quarter. The project made its maiden revenue contribution during the quarter as development revenue here is recognised on percentage-of-completion basis.

Other Singapore projects that contributed to the revenue were Urban Vista and Kensington Square.

Fragrance said it will progressively recognise revenue from sales of about S$321 million from City Gate. Meanwhile, it has obtained the temporary occupation permit for Kensington Square in August 2016.

As for its projects in Australia, Fragrance Group will only recognise the sales on construction completion.

As of Aug 11, sales of residential units in Premier Tower in Melbourne, whose residential component is about 70 per cent sold, amount to S$392 million.

Fragrance had in 2014 announced its plans on the proposed spin-off of its property business in Australia as a listing on Singapore's Catalist board.

This proposed restructuring was intended to streamline the group's business activities and improve net tangible assets.

But this plan is put on hold until market conditions improved, Fragrance said.

No dividend was declared for the second quarter; last year, the group reported interim dividend of 0.15 Singapore cent per share.