Fair value loss on its financial derivatives is a result of the strengthening of foreign currencies against the Singapore dollar
[SINGAPORE] First Sponsor expects to post a net loss for its second half and full year ended Dec 31, 2025.
The net loss is mainly due to fair value loss on its financial derivatives as a result of the strengthening of foreign currencies against the Singapore dollar, and net foreign exchange losses, the property player said in a bourse filing on Wednesday (Jan 14).
The company noted that most of its assets are invested overseas and are not Singdollar-denominated, thus it largely hedged its foreign exchange exposure – mainly to the euro, renminbi and Australian dollar.
Based on valuations as at Dec 31, 2025, the company expects to recognise a net unrealised mark-to-market loss of S$58.6 million for the second half and S$56.1 million for FY2025, given the appreciation of the euro, renminbi and Australian dollar against the Singdollar.
It also expects a net foreign exchange loss of S$21.4 million for H2 and S$20 million for FY2025 from the financial derivatives that matured during the underlying periods.
The impact is not mitigated elsewhere in the consolidated income statement as the company has funded its subsidiaries entirely with equity since September 2024, it said.
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Nevertheless, the strengthening of the foreign currencies resulted in a translation gain for its foreign currency-denominated net assets, which substantially offset the accounting loss attributable to the financial derivatives.
This leaves the overall impact to the shareholders’ funds largely intact, the company said.
Meanwhile, amid prolonged challenges in the Chinese real estate market, the company has made provision for impairment losses on certain development properties and expects to record fair value loss on certain investment properties in China.
It will also record a share of loss from some of its Chinese associates and joint ventures due to the impairment of their underlying properties.
First Sponsor said its overall business and financial position remains strong. Net gearing ratio stood at 0.56 times as at Dec 31, 2025, notwithstanding the expected net loss.
Total cash and available undrawn committed bank facilities was in excess of S$500 million as at Dec 31, 2025, while recurring net operating income from its property holding portfolio is likely “more than sufficient” to cover all of its interest expense obligations.
The company expects to release its full results on or around Feb 25, 2026.
Shares of First Sponsor closed flat at S$1.01 on Wednesday, before the announcement.
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