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Perennial posts Q3 net loss of S$9.9m on higher costs, absence of one-off gain
HIGHER finance costs and the absence of a one-off gain dampened results for real estate developer Perennial Real Estate Holdings for its third quarter ended Sept 30.
It fell into the red, posting a net loss of S$9.9 million, from net profit of S$48.3 million in the preceding year.
Revenue jumped 74 per cent to S$38.8 million from the previous year, largely due to the improved contributions from Perennial International Health and Medical Hub (PIHMH) in Chengdu and Capitol Singapore, which included the sale of a unit in Eden Residences Singapore.
Cost of sales was at S$26.6 million, up nearly 90 per cent from the year-ago quarter, as it included the property cost of the unit sold during the quarter.
Meanwhile, finance costs rose 4.8 per cent to S$31.1 million due to higher interest rates. The group drew additional loans to fund new investments and interest expenses of PIHMH which were expensed off following the completion of the project.
Earnings before interest and tax fell 91.2 per cent to S$21.8 million due to the absence of a fair-value gain of two plots on BeijingTongzhou Phase 1.
Perennial made a loss per share of 0.6 Singapore cent, from earnings per share of 2.90 cents in the previous year.
In its outlook, the group said that the revamping of Capitol Singapore and PIHMH is progressing well and their operating performance is expected to improve by next year.
However, if the US-China trade war is not resolved and the global economic outlook remains weak, these would have a bearing on the group's operating performance, Perennial warned.
Meanwhile, total committed occupancy at Capitol Singapore reached 91.5 per cent, with a number of new tenants commencing operations in the quarter.
In China, PIHMH - now operational - is expected to improve its performance as its anchor tenant, Gleneagles Chengdu Hospital, had its soft opening on Oct 26.