SINGAPORE (Feb 28): Hiap Hoe reported 4Q17 earnings increased by 141.4% to $68.0 million compared to $28.2 million in 4Q16.
This brings FY17 earnings to $80.5 million, 77.1% higher than $45.4 million recorded in FY16.
Revenue for the quarter saw a significant increase to $174.8 million from $19.2 million a year ago, mainly due to an increase in revenue from all the group’s business segments.
Artist's impression of interiors at Marina Tower Melbourne (Credit: Hiap Hoe)
Revenue from development properties of $147.4 million which was absent in the previous year was related to the sale of units at Marina Tower, Melbourne of which the property had obtained the final phase of Practical Completion in Oct 2017.
Rental revenue increased by 9.2% y-o-y to $7.06 million, backed by higher occupancies.
Revenue from hotel operations increased by 67.6% y-o-y to $18.1 million, attributed to the hotel operations at Four Points by Sheraton, Melbourne and the Holiday Inn Express Trafford City, Manchester, which commenced operations this year.
The group’s leisure business saw revenue increase by 19.4% y-o-y to $2.21 million, due to the addition of two new bowling centres.
Other income dropped 96.2% to $1.10 million compared to $28.6 million last year.
During the quarter, the group recorded $43.0 million in gain from bargain purchase arising from acquisition, which was absent in the previous year.
The group also incurred $105.0 million in losses from changes in development properties, which was absent in FY16.
Other expenses doubled to $18.6 million from $9.20 million last year, mainly due to selling expenses for Marina Tower and higher upkeep expenses for the group’s properties, as well as professional fees and stamp duty in relation to the acquisition of Golden Bay Realty.
Finance cost increased by 76.8% to $3.04 million from $1.72 million a year ago, partly attributed to the new borrowings obtained for the acquisition of a subsidiary and the finance cost on Marina Tower.
The group has recommended a final cash dividend of 1 cent per share.
Looking forward, the group will continue to grow its recurring income bas and seize opportunities to expand its portfolio of properties locally and overseas.
Meanwhile, the group expects the newly acquired Orchard Towers units to contribute positively to its rental income in the next 12 months. It also expects the hotel sector to remain competitive with the increased supply of hotel rooms, especially in Singapore.
This story, written by Samantha Chiew for The Edge Singapore, first appeared on March 1.