Frasers Property reports lower earnings in 1HFY2024 on UK impairment
ANALYSIS: These three GLS sites could revive developers’ interest Norwood Grand Condo
Frasers Property has reported earnings of $57.4 million for its 1HFY2024, down 74.6% y-o-y, due to lower residential sales in Singapore and Thailand, higher financing costs, and fair value losses and impairment on UK commercial properties.
In the same half year ended March, the company recorded revenue of $1.55 billion, a 20.4% decrease from the previous year. However, Frasers Property also booked fair value gains on industrial and logistics assets in other markets, which saw higher rental income.
To cope with the challenging market conditions, the company is actively looking for ways to build up its recurring income stream. It is also focusing on recycling its assets, with a total of $1.1 billion recorded in 1HFY2024. As of March 31, Frasers Property has a portfolio of $48.9 billion in assets under management.
CEO Panote Sirivadhanabhakdi says, “Continual market headwinds have created ongoing challenges for us, which are reflected in these results.” As at March 31, 87% of the company’s property assets are in recurring income asset classes, while 86% of its PBIT was generated from these assets. Its NAV per share stands at $2.44.
In contrast, Frasers Property shares closed at 80 cents on May 10, unchanged for the day but down 11.11% year to date. The company remains optimistic about its future prospects, with plans to install close to 4,500 sqm of solar panels across its retail and commercial properties in partnership with SP Group.
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However, the business environment remains volatile, even with signs of inflationary pressure easing in its 1QFY2024 update. The company is also eyeing three GLS sites that could potentially revive developers’ interest. With a strong portfolio and continued efforts to build up its recurring income, Frasers Property is well-positioned to navigate through the current market headwinds.