First Sponsor H2 net profit jumps more than 40 times to S$81.1 million

KEY POINTS

H2 FY2024

• Revenue: S$144.7 million (-1.6%)
• Net profit: S$81.1 million (4,168%)
• Final dividend: S$0.0355

PROPERTY player First Sponsor posted an improvement of more than 40 times in its bottom line to S$81.1 million for the second half of FY2024 ended December, the mainboard-listed company announced in its financial results on Tuesday (Feb 25).

The jump from S$1.9 million was due mainly to the maiden profit contribution from NSI – its Dutch-listed associated company dealing in commercial property – higher fair-value gain and net gain on settlement from the group’s financial derivative portfolio, as well as higher fair-value gain from investment properties.

But revenue declined 1.6 per cent year on year to S$144.7 million, as revenue from property financing and sale of development properties slid.

Notably, some costs spiked.

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Administrative expenses rose 25.4 per cent, mainly due to an increase in staff costs and professional fees. Net finance costs soared 36.4 per cent amid rising interest rates and higher average borrowings.

The board has recommended a final dividend of S$0.0355 per share for FY2024. If approved, the total dividend declared for the financial year, including the interim dividend of S$0.011, will be S$0.0465 per share, up 10.7 per cent from FY2023’s S$0.042.

For FY2024, revenue grew 12.2 per cent year on year to S$317.6 million, while net profit of S$93 million was around 7.4 times that of FY2023’s S$12.5 million.

SEE ALSO

First Sponsor to increase stake in Netherlands’ NSI for 18.9 million euros

Total borrowings edged up 3.3 per cent at S$1.3 billion as at end-December 2024, after additional loans were taken out to fund the various development projects in China, Europe and Australia.

As at Dec 31, 2024, the group’s net gearing ratio was 0.47 times – slightly lower than the 0.52 times as at Dec 31, 2023.

Any further cuts in interest rates in the European Union, China and Australia – where the group operates – would help to lower financing costs, and could improve valuations due to the lower discount rate.

The group has substantially hedged all its foreign currency exposure arising from its overseas assets.

Meanwhile, both the Puccini Milan hotel and Prins Hendrikkade Amsterdam are expected to complete their redevelopments in FY2025.

The Dreeftoren Amsterdam office and residential developments are expected to be completed in the third quarter of 2025 and Q4 2026, respectively, with both to begin operations in FY2026.

This will be followed by the Sydney House Hotel/Galleria in FY2027, and the Meerparc Amsterdam redevelopment in FY2028.

First Sponsor closed 0.9 per cent or S$0.01 lower at S$1.08 on Tuesday, before the financial results were made public.