YANGZIJIANG Financial Holding posted a net profit of S$39.3 million for the six months ended Dec 31, 2023, up 53.3 per cent from earnings of S$25.6 million in the year-ago period.
This came as its dividend income shot up to S$6.3 million, from just about S$110,000 a year earlier.
The mainboard-listed investment manager, which was spun off from Yangzijiang Shipbuilding, attributed the dramatic rise in dividend income to its private equity funds that invested in China.
Apart from dividend income, the group pointed out that it also derived “significant” income from maritime private equity funds, noting that it “closely mirrors” annual figures at S$23 million.
However, interest income from its debt investments business – a substantial income source for the group – fell 10 per cent in the half-year, to S$118.3 million. The group attributed this to a lower average balance of debt investments over the period.
That said, interest income from its cash management activities grew 3 per cent, rising to S$17.5 million, from S$17 million in the year-ago period, due to a higher average cash balance and improved returns.
Overall, revenue for H2 FY2023 rose 12.8 per cent year on year, to S$142.3 million.
Earnings per share stood at 1.08 Singapore cents for the half-year, up from 0.68 cents a year ago.
The board has proposed a final cash dividend of 2.2 Singapore cents per ordinary share, higher than the 1.8 cents per share declared for FY2022.
Vincent Toe, chief executive officer of Yangzijiang Financial, said the 22 per cent increase in dividend per share came as a “reward” for shareholders amid the group’s improved performance in FY2023 despite challenging market conditions.
“Our improved performance reflects our higher risk-adjusted returns and various initiatives to increase the group’s assets under management,” he said, pointing out that the group has strong risk control and corporate governance policies in place.
“This crystallises the road map for the group to transit to our next phase of growth,” he added.
For the full year, the group’s net profit rose 24.6 per cent to S$201.8 million, from S$162 million in FY2022. Total income grew 16 per cent to S$348.4 million, from S$300.4 million before.
Notably, the group spent 125 per cent more on compensating its employees in the year, spending S$8.1 million, up from S$3.6 million in FY2022.
The group said this was due to its “strategic expansion” efforts, adding that it had raised its Singapore headcount to support its growing business operations.
The group also made a foray into maritime fund investments, which added significantly to expenses. Operating costs of the new maritime fund assets came in at S$9.2 million for FY2023.
Meanwhile, its net foreign exchange gains fell to S$8.4 million in the year, from S$42.4 million a year earlier. This came amid the slowing trend of the US dollar’s appreciation against the Chinese yuan over the year.
As at Dec 31, 2023, the group had S$4 billion of assets under management (AUM).
Moving forward, the group said it will remain focused on its diversification efforts.
It also said it has set a new long-term target to further reduce its China debt or credit exposure to less than 30 per cent of total AUM. The ratio stood at 40 per cent as at the end of 2023, it noted.
Yangzijiang Financial hit its previous target of having China debt or credit exposure be less than 50 per cent of total AUM ahead of schedule, in the third quarter of 2023.
Regarding its debt investments in China, the group said it will proactively take measures to mitigate the impact of exposures to the Chinese real estate market. It added that it has minimised the granting of new loans that are exposed to the sector.
It will “diligently” manage its non-performing loans through avenues including loan restructuring and legal remedies, it said.
The group also intends to optimise potential returns from its maritime fund, which “remains key”. In doing so, it will continue to collaborate with professionals and institutions on a global scale to play a “dual role”, both as a facilitator and strategic investor, it said.
Shares of Yangzijiang Financial closed down 1.5 per cent at S$0.335 on Wednesday prior to the results announcement.
