SINGAPORE (Aug 3): Perennial Real Estate Holdings reported 2Q18 earnings of $8.6 million for 2Q ended June, halving from the group’s 2Q17 earnings of $17.1 million due to a comparatively lower fair value gain and higher finance costs than a year ago.

Revenue for 2Q grew 1.6% to $18.1 million due to the consolidation of Capitol Singapore’s revenue with effect from May 2018 and improved performance from Perennial Qingyang Mall and Perennial Jihua Mall.

New revenue streams from Perennial International Health and Medical Hub (PIHMH) in Chengdu, which commenced operations in June 2018, also contributed to the overall revenue growth.

Net finance costs grew 82.5% to $18.3 million from $10 million a year ago, mainly due to the consolidation of Capitol’s debt and new loans to fund new investments. 

EBIT for the quarter fell to $41.9 million from $57.1 million in 2Q17, which then included a fair value gain of $45.5 million arising from the revaluation of Xi’an North High Speed Railway Integrated Development Plot 4.

On the other hand, a lower fair value gain of $28.7 million was recognised in 2Q18 from the revaluation of PIHMH.

The latest quarterly results brings Perennial’s earnings for 1H18 to $13.8 million, 75.3% down from 1H17’s earnings of $55.8 million due to the absence of the one-off gain from the group’s partial stake in Triple One Somerset, lower fair value gain and higher finance costs.

“With the opening of PIHMH in Chengdu and the full ownership of Capitol Singapore, our focus is now on optimising these landmark developments to deliver a good stream of annuity income,” says Perennial CEO Pua Seck Guan.

“While we continue to build up our HSR portfolio in China, we will concurrently adopt an active portfolio reconstitution strategy to recycle capital from our Singapore and China assets to maximise capital efficiency,” he adds.

Shares in Perennial closed 1 cent higher at 81 cents on Thursday.