Oxley Holdings posts H1 loss of S$1.1 million on lower revenue, offset by lower finance costs, tower sale

PROPERTY developer Oxley Holdings has posted a loss of S$1.1 million in the first six months of its financial year ended Dec 31, 2023, reversing from a profit of S$277,000 in the previous corresponding period.

In a bourse filing on Thursday (Feb 8), the group put the result largely down to “lower gross profit attributable to lower revenue, and lower share of results from joint ventures and associates”. It noted, however, that this was partially offset by lower finance costs on reduced borrowings.

It reported a 63 per cent decrease in revenue to S$164.4 million, down from S$438.4 million year on year, mainly due to lower revenue recognised from Singapore development projects.

The share of results from joint ventures was 70 per cent lower year on year mainly due to lower contribution of profits from the Riverfront Residences and Affinity at Serangoon projects, as a “substantial share of profit was recognised prior to H1 FY2024”.

However, this was partially offset by higher revenue from the group’s hotel operations, and also the October 2023 sale of a Grade-A office tower in Kuala Lumpur, Malaysia, for around RM406 million (S$114 million).

The group’s finance costs dropped 29 per cent to S$52.8 million from S$74.2 million, mainly due to reduced bank borrowings.

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Net asset value per share for the group fell to S$0.2146 as at Dec 31, 2023, down from S$0.2205 as at Jun 31, 2023. Its gearing ratio improved to 1.4 times from 1.6 times over the same period, as a result of a reduction in group borrowings by S$283 million.

The group cites an optimistic macroeconomic outlook, which includes the possibility of a higher global economic growth rate in the next two years, and a decrease in inflation and interest rates.

It also echoed optimism for global tourism and a robust recovery of Singapore’s international visitor arrivals, which could boost hotel rates and occupancy rates for the group’s hotels.

However, it also cautioned that escalating operation costs and labour shortages could affect the overall performance of the hotel segment.

Ching Chiat Kwong, the executive chairman and chief executive of Oxley Holdings, said: “Barring unforeseen circumstances, we expect profit contributions from ongoing projects in Malaysia and London over the next 12 months, and foresee a rise in Singapore hotel performance amid tourism recovery.”

“While acknowledging potential challenges in the broader economic environment, we will continue to seek opportunities to divest non-core assets. Overall, we are cautiously optimistic on the outlook for 2024,” he added.