SINGAPORE (Feb 13): Roxy-Pacific announced 4Q17 earnings dropped 39% to $7.27 million, compared to $11.9 million in 4Q16.
Revenue was 53% lower at $43.3 million from $92.1 million last year, due to lower contribution from the property development and property investment segments.
Revenue from the group’s property development segment dropped 62% to $29.8 million, largely due to lower revenue recognition from Jade Residences, Whitehaven, LIV on Wilkie and an absence of revenue recognition from LIV on Sophia following the completion of these projects in 4Q16 and early 2017.
Revenue from the property investment segment was 52% lower at $1.6 million, mainly due to sale of investment property in 59 Goulburn Street in October 2017.
The group’s hotel ownership segment however saw an increase of 7% to $12.0 million during the quarter, mainly due to contribution from newly acquired hotel in Osaka, Japan (below).
Roxy-Pacific announced in August 2017 that it had bought Tenmabashi Grand Hotel Osaka for ¥3 billion ($36.8 million). (Credit: Roxy-Pacific Holdings)
Cost of sales was 57% down at $31.4 million compared to $73.0 million a year ago.
Hence, gross profit for 4Q17 stood at $11.9 million, 41% lower than $20.1 million recorded in 4Q16.
Other operating income increased by 76% to $3.54 million from $2.01 million last year, mainly due to higher fair value gain on investment property recorded for 59 Goulburn Street in 2Q17 and higher realised and unrealised foreign exchange gain, but was partially offset by fair value loss on shop units in Roxy Square recorded in 2Q17.
Distribution and selling expenses were 66% higher at $1.59 million, compared to $0.95 million a year ago, mainly due to construction of showflats for The Navian and the group’s upcoming project at Grange Road, as well as selling expense incurred for sale of completed units in Sunnyvale.
Share of results of associates was 36% lower at $5.22 million from $8.13 million in the previous year, mainly due to lower revenue recognition from Eon Shenton.
The group has proposed a final cash dividend of 0.771 cents per share, which will be paid out on April 27.
Teo Hong Lim, executive chairman and CEO of Roxy-Pacific says, “Over the last couple of years, we’ve progressively accumulated predominantly freehold sites at attractive prices amidst the property downturn. Now that prices and sales volumes are picking up, we are well positioned to ride on this turnaround with six property launches planned for this year. We’ll continue to prudently strengthen our land bank while focusing on execution to ensure sustainable long-term growth.”
This story, written by Samantha Chiew for The Edge Singapore, first appeared on Feb 13.