MIXED property developer First Sponsor Group : ADN 0% on Tuesday (Feb 20) booked a net profit slide of 96.8 per cent to S$1.9 million for the second half ended Dec 31, 2023, from S$59.9 million a year earlier.

The results come as the group’s top line for the period fell 52.9 per cent year on year to S$147 million, from S$312.2 million.

This in turn was the result of lower revenue from the sale of properties and property financing, though it was partially offset by revenue increases from hotel operations and rental of investment properties.

In particular, revenue from the sale of properties plunged 90.1 per cent to S$18.2 million in H2 FY2023. This was driven by the absence of significant inventory handover from The Pinnacle project in Dongguan in China’s Guangdong province.

First Sponsor said that the project is mostly sold and completed; only two small office-home office (Soho) units and three retail units were handed over in H2 FY2023.

In the year-ago period, 168 residential, 45 Soho and two retail units, as well as 111 car park lots, were handed over, it added.

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Despite the falls, the group, which has operations in China and the Netherlands, said its overall gross margin for the period remained fairly consistent at 45.2 per cent, a slight rise from 44.8 per cent a year earlier.

First Sponsor’s H2 earnings per share stood at S$0.0019, down from S$0.0649 in H2 FY2022.

The group declared a final dividend of S$0.031 per share for FY2023, higher than the FY2022 final dividend of S$0.027 per share.

The FY2023 final dividend will be paid on May 27, subject to shareholder approval at the group’s annual general meeting.

With an interim dividend of S$0.011 per share in H1 FY2023, the total dividend for FY2023 is S$0.042 per share.

For the full year ended Dec 31, 2023, First Sponsor recorded a net profit of S$12.5 million, down 90.5 per cent from S$131.3 million in FY2022.

Full-year revenue slid 33.8 per cent year on year to S$282.9 million, from S$427.5 million.

The group attributed this to an 82 per cent fall in revenue from sale of properties, arising from a lack of significant inventory handover.

First Sponsor noted that property market sentiments in China worsened in the latest half-year, with even weaker buying confidence dampening pre-sales for its projects.

“Despite slow pre-sales, the group does not intend to significantly compromise on the selling prices of these projects, but will instead adopt a longer-term view as appropriate, continuing to sell them with an operating profit margin,” it said.

The group noted that a “substantial number” of these projects would be able to commence at least a partial handover in FY2024, and that if buying confidence returned, it would be able to accommodate additional sales.

Meanwhile, in the Netherlands, the group’s Dreeftoren redevelopment project in Amsterdam will be delayed by six months. This is a result of the project’s facade contractor filing for bankruptcy last September.

“The targeted completion dates have been revised to Q2 2025 and Q2 2026 for the office and residential tower, respectively,” said First Sponsor.

The counter ended unchanged on Tuesday at S$1.19, before the release of the results.