Frasers Property full-year earnings up 12.4% to S$871.4 million on easing of Covid-19 restrictions

FRASERS Property on Friday (Nov 11) posted a 12.4 per cent increase in net profit to S$871.4 million for the full year ended Sep 30, helped in part by the resumption of international travel and residential projects in Singapore and Thailand.

Revenue for the full year rose 3 per cent to S$3.88 billion, according to the company’s interim financial statement.

Net profit for the six months ended Sep 30 saw a more dramatic improvement of 40.4 per cent year on year to S$741.8 million, despite a 0.2 per cent dip in revenue to S$2.19 billion.

The resumption of international travel and the easing of Covid-19 restrictions in the last six months have helped improve occupancy and room rates.

The hospitality segment saw revenue jump 62 per cent to S$636 million for the full year, with the most significant contribution coming from the United Kingdom.

At the same time, contributions from residential projects in Singapore and Thailand rose during the period, although they were partially offset by lower contributions from residential projects in the UK, Vietnam and China, the mainboard-listed company said.

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In Singapore, revenue was supported by lower rental rebates, higher atrium income, carpark income and turnover rent from the easing of Covid-19 measures, helping to offset the absence of contributions from Anchorpoint and Yew Tee Point, which were divested last year.

Revenue from Singapore commercial properties remained consistent, but that from residential properties increased by S$382 million to S$622 million, mainly due to the higher average selling price and sales volume from Riviere, Frasers Property said.

Meanwhile, there was a 62.5 per cent drop in “other income” to S$31.5 million for the full year. Frasers Property said this was because the various Covid-19-related government grants it received in the prior year ceased this year upon the lifting of restrictions. There was also a foreign exchange loss of S$8 million from the translation of monetary items.

Its share of earnings from joint ventures and associates fell 35 per cent to S$108 million, mainly due to a lower share of profits from development projects in China, said Frasers Property. This was partially mitigated by a higher share of profits from industrial projects in Australia.

Frasers Property also made a net gain of S$134 million from the disposal of a hospitality property in Australia.

Full-year earnings per share (EPS) was 22.2 Singapore cents, down from 22.6 cents in FY2021.

EPS in H2 was 18.9 cents, 39 per cent higher than the same period last year.

Net asset value per share for the group stood at S$2.64, compared with S$2.44 in the previous financial year.

The company has proposed a first and final dividend of three cents per share, higher than the two cents per share it declared in FY2021.

Looking ahead, Frasers Property said the recovery of the hospitality sector, while progressing, may be bumpy due to strong headwinds.

Still, it is “cautiously optimistic” about the long-term growth potential of the hospitality sector, it said, adding that it takes a “long-term view” of the returns from its investments.

It also said its suburban retail portfolio in Singapore has been benefiting from a boost in tenants’ sales and shopper traffic with the resumption of atrium activities, now that Singapore has transitioned to an endemic Covid-19 environment.

On the residential front, Frasers Property said it continues to adopt a “prudent” approach with a strategic focus on markets with “robust underlying demand”.

It sold over 9,800 residential units in FY2022 and continued to “selectively replenish” its residential land bank, including a residential site in Queensland that can yield around 2,150 lots, it said.

While rising interest rates, inflation and the volatility of foreign currency are expected to weigh on the group’s business, Frasers Property said “opportunities from structural shifts exist, particularly from evolving expectations for integrated live, work and play spaces”.

Frasers Property shares closed at S$0.885 on Friday, up S$0.015 or 1.7 per cent.