Real estate management services group LHN Limited has reported earnings of $45.8 million for the FY2022 ended Sept 30, 63.3% higher than the earnings of $28.1 million in the year before.
The earnings surge was mainly attributed to higher profitability in the group’s space optimisation business – commercial properties and residential co-living properties.
Basic earnings per share (EPS) for the FY2022 stood at 11.21 cents.
During the 2HFY2022, the group’s earnings increased by 2.9% y-o-y to $13.6 million, compared to the 117.4% y-o-y surge in its earnings of $32.2 million for the 1HFY2022.
LHN Limited’s revenue for the FY2022 fell by 7.6% y-o-y mainly due to the lower revenue from its facilities management business and partly offset by the higher revenue from its space optimisation business.
The group’s other revenues for its industrial business increased, but offset by the dip in its commercial business. LHN’s residential segment also saw its revenue increase on a y-o-y basis thanks to its co-living properties and offset by the decrease in 85 SOHO and the lack of income from its dormitory set up and retrofit business.
During the FY2022, LHN Limited’s gross profit fell by 11.3% y-o-y to $59.0 million. This was mainly due to the decrease in the group’s dormitory business under the facilities management business and partly offset by the increase from the co-living business of the residential properties.
Other gains/losses – net and other income fell by 21.1% y-o-y to $11.8 million in the FY2022 mainly due to the write-off of the leasehold building at 7 Gul Avenue under the logistics services business. The lower net and other income was also lower due to the impairment loss on property, plant and equipment under the space optimisation business, as well as the decrease in net rental rebates from governments and landlords and lower grants from the jobs support scheme.
During the year, LHN Limited’s share of results of associates and joint ventures surged nearly 4.5 times y-o-y to $16.5 million from $3.7 million mainly due to the increase in share of net fair value gain on investment properties; and the increase in operating profit from the group’s joint ventures.
LHN Limited also reported a fair value gain on investment properties of around $12.3 million in the FY2022 compared to the fair value loss of $11.6 million in FY2021.
As at Sept 30, cash and cash equivalents stood at $39.7 million.
A final dividend of 1.0 cent has been declared for the year-end, unchanged from last year’s. The proposed final dividend will be paid on Feb 21, 2023.
Looking ahead, the group says it expects to see rising rental rates for its residential co-living segment in the FY2023, with the recent property cooling measures driving demand towards alternative residencies such as co-living properties.
It also expects its space optimisation business to “focus on the continued growth” of the co-living business in the FY2023. The group adds that it will continue to seek more external facilities management contracts for its facilities management business.
“With upcoming acquisitions and expanded offerings planned for FY2023, the group has confidence in achieving healthy results across our three main business segments in the year ahead. We hope to achieve continued success by leveraging on our established expertise in these areas,” says Kelvin Lim, LHN Limited’s executive chairman and group managing director.
“On the sustainability front, it’s an honour to see our long-year efforts in corporate governance recognised in FY2022, which is a great motivation for us to uphold our standard of excellence. We will also continue to develop more effective initiatives in our everyday operations to create long term positive impacts to our stakeholders, communities and the environment we operate in coming years,” he adds.
As at 3.39pm, shares in LHN Limited are trading 0.5 cent lower or 1.64% down at 30 cents.