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Thakral posts 91% fall in H1 profit to S$241,000

PROPERTY investor Thakral Corp saw its earnings fall 91 per cent to S$241,000 for the six months ended June, as its topline shrank from Covid-19 related closures and lockdowns.

Including non-controlling interests, the mainboard-listed company posted a H1 net profit of S$2.4 million, lifted by a S$3.5 million one-off gain from the sale of Thakral Building in Osaka, Japan.

Thakral’s H1 revenue fell 15 per cent to S$43 million. Contributions from the real-estate investment division stood at S$10.9 million, 15.7 per cent down from a year ago.

The H1 revenue of the firm’s lifestyle division fell 14 per cent to S$32.2 million, while posting a segment loss of S$2.8 million, narrowed down from S$3.9 million a year ago. The lifestyle division will cut its cost structure to return to profitability, Thakral said.

Thakral has real-estate investments in Australia, China, Singapore and Japan. Its investments in Japan include commercial buildings and business hotels, while those in Australia include lifestyle resorts under the GemLife brand, targeted for those aged 50 and up.

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Despite the tough conditions, Thakral said that GemLife has achieved a higher sales of houses, which shows “its resilience not only to the volatility of the broader residential property market in Australia, but also to the current pandemic”.

Sales and settlements at the Bribie Island, Woodend, Highfields, Maroochy Quays and Pacific Paradise projects are also progressing well, it added; 370 houses at these projects are now occupied.

Looking ahead, GemLife has acquired land for four new projects, bringing the total number to 10 resorts, with options for further acquisition of various new sites to achieve its pipeline goal of 4,000 homes.

Thakral is taking a more conservative approach in Japan. While its office properties remained resilient, its hotel investments incurred rental arrears from all of three operators. To conserve cash, all non-essential capital expenditure at properties in Osaka are on hold, with renovations in H2 being undertaken only if they lead to improved leasing terms.

Independent chairman Natarajan Subramaniam said: “In spite of the weak economic forecast, the investment division maintains an optimistic view of its investments in Australia and Japan as these two markets are relatively stable and well-positioned to ride out the economic vagaries posed by the ongoing pandemic.”

Shares of Thakral closed at S$0.415 on Thursday, up 1.22 per cent, before the results announcement.

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