SINGAPORE (Nov 9): Frasers Property concluded FY18 with earnings of $1.2 billion, a 15.8% improvement from $1.03 billion on higher revenue and fair value gains on investment properties.

Revenue for the full year grew 7.1% to $4.3 billion from $4 billion in FY17, attributed to the timing of sales settlements of development projects in Singapore and Australia, as well as maiden contributions from the business parks in the UK.

In Singapore, revenue from retail & commercial properties grew 9% to $470 million on the commencement of operations at the newly completed south wing of Northpoint City, coupled with higher occupancies at the north wing following the completion of asset enhancement initiatives.  

Residential properties, too, reported higher revenue due to profit recognition from Parc Life Executive Condominium and Seaside Residences. 

Over FY18, a fair values gain of $387.8 million was recorded compared to a gain of $215.3 million a year ago.

Looking ahead, the group says it expects to launch its development on Jiak Kim Street in 1H19. It notes a resilient portfolio of retail malls in Singapore and increasing traction at Alexandra Technopark.

While Frasers is positive on its development pipeline in Australia, the group says its hospitality business has been experiencing challenging market conditions in the UK on the back of declining consumer sentiments.

A final dividend of 6.2 cents is payable on Feb 20 next year, unchanged from that of FY17. Taken with the interim dividend of 2.4 cents already paid, this brings the total distribution for FY18 to 8.6 cents per share.

Commenting on the latest set of results, Panote Sirivadhanabhakdi, Group CEO of Frasers Property, believes Frasers Property’s diversification into investment properties in developed markets has helped to “smoothen the effects of the inherent lumpiness of development income”.

“The development business is facing multiple headwinds, and heightened geopolitical risks have been presenting various challenges, one of which is to the F&B segment of our MHDV hospitality business in the UK.  In today’s uncertain environment, it is important that we remain nimble and adaptable,” says Sirivadhanabhakdi.

“We will maintain our efforts at optimising the operating performance of our investment properties through asset value creation and enhancement, while concurrently reviewing our investment properties portfolio regularly to identify opportunities to unlock value,” he adds.

Shares in Frasers Property closed 2 cents lower at $1.62 on Thursday.