For the 1HFY2023 ended Dec 31, 2022, Oxley Holdings saw its earnings plunge by 98.8% y-o-y to $277,000 from $23.5 million previously.
The group’s pre-tax profit for the same period stood at $4.6 million, which is down by 83.0% y-o-y. Profit for the period fell by 91% y-o-y to $2.2 million.
The significantly lower profit and earnings were attributable to the lower revenue streams coupled with higher finance costs resulting from rising interest rates, as well as lower mark-to-market fair value gain on derivative financial instruments.
During the 1HFY2023, revenue fell by 13% y-o-y to $438.4 million mainly due to the one-time sale of land parcels in Australia made in the 1HFY2022. The sale earned the group $97.0 million. This was partly offset by the higher revenue contribution from the group’s development projects in Singapore, Malaysia and Cambodia.
Gross profit fell by 11% y-o-y to $65.8 million. However, gross profit margins (GPM) for the 1HFY2023 was higher y-o-y mainly due to generally better margins across all business segments, especially hotel operations. Excluding the gross profits from the sale of Oxley's land parcels in Australia, the gross profit margin for the 1HFY2022 would be 12.8%, lower than the 15.0% in the 1HFY2023.
Other income fell by 68% y-o-y to $691,000 due to lower government grants received.
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Other gains fell by 44% y-o-y to $16.5 million. This was mainly due to the gain on disposal of other assets, fair value gains arising from revaluation of certain investment properties in Singapore, as well as foreign exchange (forex) gain from the translation of US dollar (USD) denominated borrowings on the back of the lower USD against the Singapore dollar (SGD).
Meanwhile, administrative expenses increased by 11% y-o-y to $16.7 million as hotel-related expenses increased on the back of the opening of the group’s hotels to the public after they ceased to be stay-home-notice facilities.
Finance costs rose by 30% y-o-y to $74.2 million mainly due to higher interest rates from loans and borrowings.
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Share of results from joint ventures and associates, net of tax, however, surged by 9.2 times to $14.0 million from $1.5 million in the same period the year before. This was mainly due to higher profit contributions from the joint ventures and associates in Singapore.
As at Dec 31, 2022, the group’s cash and cash equivalents stood at $152.9 million with a gearing ratio of 1.89. Barring any unforeseen circumstances, the group expects its net gearing ratio to improve over the next 12 months when its development projects in Singapore achieve their temporary occupation permits (TOPs) this year.
The group’s total unbilled contract value stood at $1.4 billion as at Dec 31, 2022.
In its outlook statement, Oxley says it has “taken steps to restructure its core operations and reposition the assets to improve their performance and returns” with an expected “sharp downturn” in global growth. That said, it remains “cautiously optimistic” for the year ahead.
“The uncertainties in the global economy and Russia-Ukraine conflict, coupled with rising interest rates have resulted in subdued investments across the globe. This dampens overall economic prospects. Oxley sees opportunities but we will take cautious steps and continue to strengthen the group’s financial position with the disposal of non-core assets to focus on the development projects in the developed markets,” says Ching Chiat Kwong, executive chairman and CEO of Oxley.
Shares in Oxley closed flat at 14.5 cents on Feb 1.