Pacific Star's Q2 net loss widens to S$6.63 million; board still thinks it can continue as going concern

CATALIST-LISTED property developer Pacific Star Development sank further into the red in the second quarter, as the whammy of swelling finance costs and its share of an associate's loss ate into dwindling gross profit, according to results released on Friday night.

Net loss widened to S$6.63 million for the three months to Dec 31, 2019, from S$3.32 million before, as revenue came in 18.5 per cent lower, at S$2.12 million, on the back of lower net selling prices, even though the same number of sales agreements were recognised.

The group clocked a loss per share of 1.33 Singapore cents, widening from 0.76 Singapore cent before, while it had a net liability of 0.65 Singapore cent a share, against net asset value of 1.87 Singapore cents a share as at June 30, 2019.

For the six months, net loss jumped to S$12.8 million, against S$4.45 million previously, while group turnover was halved to S$2.12 million, from S$4.78 million, as no revenue or cost of sales were recorded in the first quarter.

While Pacific Star had a net liability position of S$3.26 million as at end-2019, the board said in its statements that it believed the group could continue as a going concern as it should be able to meet its short-term obligations when they fall due, if there are no unforeseen circumstances.

The group said that it is in talks to sell unsold units in Towers 1 and 2 of Puteri Cove Residences in Malaysia, as well as engaging with potential bulk buyers who could snap up 10 to 20 units at a go, and reviewing an offer for the collective sale of Tower 3.

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Meanwhile, the group is also trying to refinance The Posh Twelve in Bangkok, a project that is held through a joint venture and associate. If the lenders agree, the refinancing could let the group recoup up to US$7.6 million in capital and loans repatriation, it said.

Still, the group flagged the over-supply of unsold completed condominiums in both Iskandar Puteri and Bangkok, which it noted have depressed the mood among buyers.

Construction has also stopped at The Posh Twelve amid a dispute with the contractor over payments and progress, although Pacific Star said that it hopes to resolve the matter.

Pacific Star is now working on cash collection and new sale and purchase agreements for Puteri Cove Residences units, and is also "actively pushing sales to foreign buyers in overseas cities in Korea, China and Hong Kong via a network of agents" for its projects, it said.

No dividend was recommended for the period as there were no profits, the board added.