Oxley Holdings posts 90% slide in Q2 net profit of S$3.56m

MAINBOARD-LISTED developer Oxley Holdings saw its second-quarter earnings decimated by a sharp decrease in other gains, on the absence of a fair-value gain as an investment property in Dublin was revalued, according to unaudited results released on Monday.

The group's Q2 net profit plummeted by 89.9 per cent year-on-year to S$3.56 million for the three months to Dec 31, 2019.

That was even as turnover fell by 12.5 per cent to S$311.2 million on lower contributions from a project in Britain, despite the higher revenue from projects in Singapore and Dublin, as well as contributions from a new Australian subsidiary.

Besides the 59.8 per cent decrease in other gains from S$51.5 million to S$20.7 million, the bottom line also took a hit from administrative expenses tripling to S$22.6 million.

The spike in administrative costs was attributed to both higher consultancy fees for the overseas projects, as well as the inclusion of expenses from the Australian unit.

Oxley consolidated its stake in Perth-based property firm Pindan Group for zero consideration in October 2019, as part of a settlement for a claim over missed performance targets.

Earnings per share dipped to 0.09 Singapore cent for the quarter, down from 0.87 cent before, while net asset value stood at 34.05 Singapore cents a share, compared with 33.94 cents as at June 30, 2019.

Meanwhile, net profit for the half-year fell by more than half from S$34.2 million to S$15.7 million, even as revenue rose by 13 per cent to S$594 million.

Oxley noted in its outlook statement that real estate sales in 2020 are "expected to be weighed down by oncoming supply and build-up of unsold inventory", even as it's not clear what impact the novel coronavirus outbreak will have on the market.

The outbreak is expected to cause greater fluctuation in foreign currencies, but could put downward pressure on interest rates and lower the group's cost of borrowings, it added.

The group had secured S$8 billion in sales for its development portfolio as at end-January 2020, with S$3.02 billion of that coming from projects in Singapore, the board disclosed.

It also had S$3.3 billion in unbilled contracts, with some S$2.3 billion attributable to projects here.

The board has declared an interim dividend of 0.32 Singapore cent a share, unchanged from the same period the year before, with the books closure and payout date yet to be announced.

Oxley shares shed half a Singapore cent or 1.45 per cent to S$0.34 on Monday before the results were announced.