Roxy-Pacific sinks into red with S$32.3m H2 loss; property and hotel revenues hit

PROPERTY player Roxy-Pacific Holdings posted a S$32.3 million net loss for H2 ended December, reversing a S$30 million net profit from a year ago, the mainboard-listed company announced on Friday after the market close.

Its net loss for the full year stood at S$29.5 million, mainly due to impairment charges on its hotel assets and properties held by its overseas associated companies, as well as additional tax expenses incurred for its divested investment in Hong Kong.

But it expects to be profitable in FY2021, "barring any unforeseen circumstances". The impairment charges for FY2020 were non-cash items. Roxy-Pacific said that its cashflow from operations remained strong at S$84.4 million in FY2020.

Revenue for H2 fell 74 per cent to S$80.4 million; for FY2020, it dropped 55 per cent S$198.4 million. This was due to lower contributions from both the property development and hotel ownership segments.

For property development, full-year revenue fell to S$165.8 million, from S$385.9 million in FY2019, due to the absence of revenue recognition from The Hensley and The Navian, as well as West End Glebe.

Lower profit margins for some projects in Singapore as well as unexpected project cost escalation for Octavia Killara also ate into the FY2020 gross profit margin for property development, which fell nine percentage points to 10 per cent.

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As at end-2020, Roxy-Pacific had a total balance attributable pre-sale revenue of S$539.4 million, the profits of which will be progressively recognised from the start of FY2021 to FY2023.

Meanwhile, Roxy-Pacific's hotel operations were affected by the Covid-19 border control measures which impacted the tourism industry. Revenue from the segment fell 50 per cent to S$25.2 million in FY2020.

Revenue from the property investment segment remained relatively stable at S$7.4 million in FY2020, supported by rental income from Roxy Square and NZI Centre. Meanwhile, other operating income increased 129 per cent to S$16.4 million in FY2020, lifted partly by government grants for the Jobs Support Scheme.

Roxy-Pacific said of its results: "Despite all the challenges, the group will continue to monitor the evolving pandemic situation and adjust and react proactively with appropriate countermeasures to minimise financial impact for (FY2021)."

Shares of Roxy-Pacific closed flat at S$0.35 on Friday.