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Oxley's Q3 profit falls 33% but CEO bullish on project pipeline

OXLEY Holdings' net profit for the third quarter ended March 31 slid 33 per cent to S$30.56 million compared to the third quarter last year.

Group revenue fell 38 per cent to S$238.84 million during the quarter from a year ago, as it did not have any major project completions similar to the Oxley Tower in the year ago period.

The homegrown developer said that revenue during the quarter ended March 31 this year stemmed from the recognition of revenue upon the handover of certain plots in The Royal Wharf Phase 1A and 1B (based on completion of construction method), rental income from investment properties and revenue from hotel operations.

For the nine months ended March 31, the group reported a 17 per cent drop in net profit to S$147.33 million and a 15 per cent drop in revenue to S$955.6 million, as there was no major project completion similar to Oxley Tower in the year ago period.

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During this period, it recognised revenue from the handover of certain plots in The Royal Wharf Phase 1A and 1B, revenue from sold units at two mixed-residential projects in Singapore, Floraville/Floraview/Floravista and The Rise @ Oxley-Residences based on their construction progress and rental income from investment properties and service income from hotel operations.

The group's 50 per cent joint-venture project, The Bridge, in Cambodia, has been accounted for as share of profit from associates and joint ventures. It generated attributable revenue of S$375.3 million during the nine months ended March 31.

Had this revenue been consolidated as the group's operating revenue, revenue for the nine months would have been S$1.33 billion, 19 per cent higher than the year-ago period.

Oxley said it has substantial earnings visibility going forward arising from S$1.6 billion of unbilled contract that will be billed progressively. Its remaining gross development value (GDV) of S$19 billion includes significant amount of land bank.

Of these, Singapore's development portfolio as at March 31 accounted for S$146 million of unbilled progress billings and a GDV of S$5 billion from some 3,900 residential units.

Earlier this month, Oxley launched the first of these projects, The Verandah Residences, and sold 129 of the project's total 170 units during the first weekend of sales.

The launches of other major projects, including projects at the former Rio Casa and Serangoon Ville sites, are scheduled in the next few months, it said. These launches are expected to enhance Oxley's revenue stream for the next few years.

"The launch of The Verandah Residences set off a strong start for our Singapore projects to be launched in the upcoming months," said Ching Chiat Kwong, executive chairman and CEO of Oxley Holdings. "With Chevron House added to our investment portfolio, our assets base continued to strengthen."

Oxley had in March completed the acquisition of Chevron House, a Grade-A office building in Raffles Place.

The office space and retail space are 98 per cent and 100 per cent rented out respectively, providing a healthy yield and stable, recurring income stream. The asset enhancement initiative is expected to increase the net lettable area by at least 20 per cent, thus enhancing yield, the group said.