[SINGAPORE] Higher contributions from residential projects in Singapore, as well as a one-off reversal of tax provisions, pulled up Frasers Property’s first-half earnings – but the group said it will continue zeroing in on optimising capital efficiency.
Speaking at an earnings briefing on Friday (May 9) morning, Frasers group chief executive Panote Sirivadhanabhakdi said: “The most important priority now is building the right cash flow and maintaining the right costing… Our disciplined approach to optimise capital efficiency will allow us to continue to create, sustain and unlock value.”
In the latest half-year ended Mar 31, 2025, the group posted a 147.6 per cent jump in profit to S$142.2 million, from S$57.4 million in the year-earlier period.
This came as revenue rose 2.7 per cent to S$1.6 billion, from S$1.5 billion in the same period last year.
Earnings per share rose to S$0.035, from S$0.009 in the previous corresponding period.
No interim dividend was declared for the period, unchanged from the previous year.
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The surge in profit was largely due to a one-off reversal of tax expenses amounting to S$6.1 million, said Frasers.
Excluding the reversal, which is subsequent to finalisation, the group’s profit was down 13 per cent year on year. This was mainly from a 14 per cent increase in net interest expense to S$281.5 million.
Revenue also rose from the absence of an impairment on a UK commercial property, as well as higher contributions from residential projects in Singapore, such as its 158-unit Sky Eden@Bedok condominium and 777-unit Toa Payoh project, The Orie. In the half-year, Frasers sold 692 homes in Singapore, with S$0.4 billion in unrecognised revenue from 849 contracts on hand.
At the same time, Frasers said it maintains a “robust non-residential development pipeline”, focusing on industrial and logistics assets across developed and emerging markets.
For instance, the group has 10 assets under development in Australia and Europe, with six to be completed in FY2025, another three in FY2026 and one in FY2027. In total, the 10 span 2.6 million square metres.
Panote highlighted that revenue generated from Frasers’ residential developments ensure earning and cash flow visibility, while its “strong build-to-core pipeline” of non-residential assets support the resilience of its recurring income base.
“(This) robust portfolio asset management will drive returns and sustainable value (for shareholders) over the long term,” said the chief executive. “The important part is for us to build up the performance of the company, back to where it has to be. It’s not just about a quality portfolio, it’s about quality earnings.”
As at Mar 31, 2025, Frasers’ net asset value per share was down 2.9 per cent to S$2.38. Net interest cover fell to 2.1 times, while net gearing ratio inched up to 88.5 per cent.
Meanwhile, fixed rate debt, including those that were hedged, fell to 70.3 per cent. Its average weighted debt maturity was 2.6 years, with a 4 per cent blended cost of debt.
Frasers group chief financial officer Loo Choo Leong highlighted that even though almost all figures on the balance sheet were in the red, they were still “within acceptable levels”.
Net debt over property assets stood at 44 per cent. Since the group’s balance sheet was currently made up of more investment property assets, including its real estate investment trusts, Loo said this was “still a decent enough level” from a loan-to-value perspective.
He added that it was also a “timing issue”, since some of Frasers’ capital partnerships that are already in place had yet to go through.
When asked about a potential privatisation – similar to some of its peers, and given that Frasers appeared undervalued – Panote said shareholder decisions were beyond him.
But he emphasised that Frasers will remain vigilant and proactive in assessing the health of its business and financial position. This includes ensuring it has the right operating model, and an “enterprise mindset” to sustain value creation.
“We are closely monitoring the evolving macroeconomic conditions, and we are confident that Frasers Property is well-placed to navigate across the challenging times,” he said.
Shares of Frasers Property were trading down S$0.01 or 1.2 per cent to S$0.80 on Friday at 11 am.
