SINGAPORE (May 28): Property developer Pan Hong Holdings reported earnings of RMB24.6 million ($5.2 million) for the FY18 ended March, representing a 60.8% decline from its FY17 earnings of RMB62.7 million a year ago on lower revenue and margins, as well as higher administrative expenses.

A final dividend of 1.5 cent has been proposed.

Revenue for the full year fell 45.4% to RMB386.8 million from RMB708.9 million a year ago due to lower handover of units for Phase 1 of Pan Hong Run Yuan and Phase 2 of Huzhou Hua Cui Ting Yuan as compared to a year ago.

In line with the lower revenue, cost of sales fell to RMB331.2 million from RMB578.2 million in FY17 due to the handover of fewer residential units.

Gross profit margin, however, fell four percentage points to 14.4% in FY18 from a year ago due to higher handover of commercial and others units over the period under review.

Administrative expenses grew 27.5% to RMB18.8 million in FY18 from RMB14.7million a year ago, mainly due to legal and professional fees and related expenses incurred for the distributing and appealing for compensation for Pan Hong’s Taihu Meixi Land construction project, which the group said was hindered due to the discovery of cultural buildings.

In its outlook, Pan Hong notes a gradual improvement in China’s property market although it foresees an inevitable negative impact on the real estate industry due to government measures to avoid the formation of a housing bubble and cut excess supply.

The group nevertheless adopts a positive long-term macro prospective, and says its key strategies will continue to lie in focusing on pre-sales and quickening its pace of property development through possible acquisitions of land parcels in second- to third-tier cities, as well as the potential expansion of its portfolio.

Shares in Pan Hong closed 1.1 cent higher at 9.9 cents on Friday.

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