Frasers Property reports lower earnings in 1HFY2024 on UK impairment
Frasers Property has reported earnings of $57.4 million for its 1HFY2024, down 74.6% year-on-year. The company attributes the lower bottom line to fair value losses and impairment booked on certain UK commercial properties amounting to $115.3 million. On the other hand, it booked fair value gains on some of its industrial and logistics assets in other markets in Europe and Australia, which enjoyed higher rental.
Revenue was down 20.4% in the same half year ended March to $1.55 billion. Meanwhile, its PBIT was down 15.7% year-on-year to $577.6 million. “Continual market headwinds have created ongoing challenges for us, which are reflected in these results,” says CEO Panote Sirivadhanabhakdi.
To cope with the challenges, Frasers Property is looking at ways to build up its recurring income stream. It is also actively recycling its assets, with a total of $1.1 billion recorded in 1HFY2024. As at March 31, it has a portfolio of $48.9 billion in assets under management. The company notes that 87% of its property assets are in recurring income asset classes, while 86% of its PBIT was generated from these assets. As at March 31, its NAV per share was $2.44.
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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 attributes this to lower residential sales in Singapore and Thailand, as well as higher financing costs.
Frasers Property has a diverse portfolio of assets in various markets and has been actively building up its recurring income stream. Despite facing market headwinds, the company remains focused on its long-term strategy and has continued to recycle assets. As a result, it has a strong portfolio of assets under management and a solid NAV per share.
In order to further strengthen its recurring income stream, Frasers Property has recently announced its partnership with SP Group to install close to 4,500 sqm of solar panels across its retail and commercial properties. This initiative will not only reduce the company’s carbon footprint but also generate additional revenue through the sale of excess energy to the grid.
In addition, Frasers Property has been actively bidding for new projects, with a sole consortium with other giant developers winning the bid for the Jurong Lake District master developer site. This demonstrates the company’s continued commitment to expanding its portfolio and creating value for its shareholders.
Despite the challenging business environment, Frasers Property remains confident in its long-term prospects. With a strong portfolio of assets, a focus on growing its recurring income stream, and a commitment to sustainability, the company is well-positioned to weather any market fluctuations and deliver long-term value for its shareholders.