LHN full-year net profit up 16.9% to S$28.9m

PROPERTY player LHN Group's net profit rose 16.9 per cent to S$28.9 million for the full-year ended Sept 30, 2021, despite a 9.9 per cent slip in revenue from a year ago.

This was mainly due to an improvement in the profitability of its space optimisation business (industrial and Singapore co-living segment), facilities management business and logistics services business - along with lowered cost of sales and operating expenses, said the group in a press statement last Friday (Nov 26).

It has proposed a final dividend of 1 Singapore cent for FY2021.

Notably, profit before tax for LHN's facilities management business jumped 85.2 per cent to S$18.6 million in FY2021.

The group said this was driven by the expansion of the carpark business arising from the joint venture acquisition of Bukit Timah Shopping Centre carpark in December 2020 and the commencement of operations of 33 new carparks in January 2021, as well as an increase in facilities management services amid the pandemic.

For the space optimisation business, profit before tax was up 25.9 per cent to S$11 million year on year. For FY2022, the group intends to fully operationalise the 4 co-living properties acquired in FY2021 and its Balestier co-living hotel property acquired in Q1 FY2022.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

It also expects a full year of revenue contribution from its 2 newly-acquired industrial joint venture properties, namely at 202 Kallang Bahru and 55 Tuas South Avenue 1.

Although total revenue from the industrial and commercial segments fell by S$17.1 million in FY2021, profitability for industrial segment had increased by S$12.8 million mainly due to the lease expiry of loss-making site at 10 to 40 Tuas in FY2020 and net fair value gains from LHN's joint venture industrial properties.

As for the residential co-living business portfolio, revenue grew by about S$1.8 million or 19.1 per cent in FY2021 and is expected to improve further once the newly-acquired properties become fully operational in FY2022.

Looking ahead, the group is anticipating some headwinds in the path to recovery from Covid-19.

"The recent disruption to the global supply chain including higher construction costs, construction delays as well as rising electricity and operating costs and an uncertain interest rate environment may cause operating costs to increase for the group's business," it said.

On Nov 24, LHN announced its application to the Stock Exchange of Hong Kong to spin off and separately list the shares of LHN Logistics on the Catalist board of the Singapore Exchange. A concurrent application was also made to the Singapore Exchange Securities Trading.

If the proposed spin-off is successful, LHN will continue to hold majority shareholding in LHN Logistics, and the latter will continue to be consolidated with the group.

LHN shares fell 2.5 cents or 6.9 per cent to S$0.34 on Nov 29.