Conglomerate Fraser and Neave’s (F&N) earnings for the second quarter rose sharply, lifted by better results across all business segments, especially from its property arm.
The company has posted a net profit of $235.9 million for Q2, more than three times higher compared to the $64.3 million on the previous year. Revenue also increased 21 percent to $1.37 billion compared with the same period last year.
The company’s sole property unit – Frasers Centrepoint – has contributed 53 percent to its total profit before interest, taxation, fair value adjustments and exceptionals (PBIT) in the second quarter. Its PBIT was nearly double compared last year, which was largely due to higher margins from pre-sold development projects higher rentals and occupancies at its investment properties and higher profit recognition from new project sales.
Frasers Centrepoint soft launched its Flamingo Valley at Siglap Road on May 14, where it only sold 20 of the 120 released units at an average price of $1,200 psf. The official launch of the project is expected in the next few weeks.
F&N’s food and beverage (F&B) unit also posted a good result, with PBIT up 27 percent in Q2 compared with the previous year. Beer and soft drinks sales were particularly strong, with the soft drinks demand increasing during the celebration of the Chinese New Year.
Its printing and publishing division managed to collect positive PBIT in the second quarter, recovering from a loss in the same period last year.
The company’s attributable to shareholders was also fuelled by a $44.5-million exceptionals and a fair value gain in investment properties worth $21.2 million. Excluding these items, F&N’s net profit was $170.3 million, up 89 percent from the previous year.
For H2 this year, revenue of the company grew 19 percent to $2.83 billion from a year ago. Net profit after exceptionals and fair value adjustments reached $374.4 million, more than doubled than last year’s $153.2 million.
The board has already declared an interim dividend of five cents per share payable on June 25.
The company is optimistic about prospects, and expects to have higher yearly results in terms of profit before fair value adjustments.
On the property side, more launches are expected in the coming days. Aside from Flamingo Valley, its property unit will also launch Waterfront Gold in June, with an average selling price of $850 psf.