Frasers Property profits fall 12.1% to $233.84m in H1

This is due to lower contributions from projects and low results from hospitality properties.

Frasers Property Limited’s (FPL) net attributable profit plunged 12.1% YoY to $233.84m in H1 FY2020 from $265.99m in 2019, according to an SGX filing. Meanwhile, revenue inched up 5.7% YoY to $2.13b from $2.02b over the same period.

Profits before fair value change, taxation, and exceptional items (PBIT) also jumped 18.9% YoY to $790.15 from $664.31.

The increases in revenue and PBIT were attributable to the settlements of development projects in China, maiden contributions from PGIM Real Estate AsiaRetail Fund Limited’s portfolio, and the consolidation upon the step-up acquisition of Golden Land Property Development Public Company.

However, these gains were countered by lower contributions from development projects in Australia and poorer operating results from hospitality properties due to the COVID-19 outbreak.

Meanwhile, revenue and PBIT from its Singapore operations inched up 7.9% and 32.6% to $406.23m and $262.82m, respectively, mainly due to maiden contributions from PGIM ARF.

Frasers Property’s portfolio of commercial properties registered a 90% occupancy rate in H1 FY2020, and its private condo project Seaside Residences is on schedule for completion in H2. Integration work is also in progress following the acquisition of AsiaMalls Management.

On the retail front, the sale of Central Park Retail for $160m has been settled and Shell Cove Retail, Stage 3, has been sold to a third party for $4.8m. On the hospitality side, the company is actively exploring alternative uses of its rooms to mitigate the impact of lower customer traffic amid the COVID-19 pandemic.

According to FPL’s CEO, Panote Sirivadhanabhakdi, the results reflected the initial impact of the COVID-19 pandemic on the group’s financial performance, prompting the precautionary decision to temporarily suspend interim dividend.

In addition, effective from 1 May, the group’s CEO will take a 25% reduction in his base salary, whilst other members of senior management and board of directors will take base salary reductions of up to 10%.

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