SINGAPORE (Aug 8): Fragrance Group has reported a near-doubling of 2Q earnings to $6.8 million from $3.8 million a year ago due to higher revenue.  

This brings the property developer’s earnings for 1H18 to a total of $15.3 million, up 66.8% from 1H17 earnings of $9.2 million previously.

Revenue for 2Q18 surged 62.5% to $56.8 million from $35 million a year ago on account of higher contributions from the group’s City Gate development project in Singapore; rental revenue from commercial properties; and full quarter hotel operations income from ibis Styles Hobart, which commenced operations in Australia during July last year.

The hospitality investment segment also booked a full quarter of revenue derived mainly from the group’s four hotel properties in the UK.

Gross profit margin however fell to 37.5% compared to 41.6% in 2Q17, mainly due to lower margins from the City Gate project, which Fragrance has a 50% interest in.

Finance costs grew 32.2% to $5.2 million from $4 million due to additional loans drawn down, the issuance of new debt notes, as well as higher average interest rates across floating rate borrowings over the quarter.

These were however partially offset by the capitalisation of $2.9 million of interest expenses for development projects in Australia and the UK.

Going forward, Fragrance says it expects property market sentiments in Singapore to be affect by the recent implementation of cooling measures. The group however expects to receive healthy cashflow from the commercial units of the City Gate mixed development project once completed.

Fragrance is also anticipating a stable stream of revenue from ibis Style Hobart hotel in Tasmania, as well as stable income from its investment properties in the UK, over the course of FY18.

Shares in Fragrance closed flat at 14 cents on Wednesday.