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Roxy-Pacific Holdings Ltd Boost Earnings In First Quarter By 27% Year On Year

roxy pacificRoxy-Pacific Holdings (SGX: E8Z) announced its first quarter earnings yesterday.  The company, perhaps better known as the owner of the Grand Mercure Roxy Hotel in Singapore, is a property development and investment company. Its property interest spans Singapore, Malaysia, Hong Kong and Australia. A few of other well-known projects includes the Jade Residences and Whitehaven in Singapore.
Operating Results

Roxy Pacific recorded revenue of S$ 79.5million, 48% higher than last year. Gross margin remained at about the same at  32% for the quarter. The group received a 58% revenue boost from its property development business, recording S$67.1million in sales, contributing 84% of total revenue. The Property investment business contributed S$12.4million to the group, growing by 10% from last year.  This was mainly attributed to improvements in the occupancy rate from 79.2% to 90.1% of the Singapore hotel. Revenue per available room (RevPar) also improved 11% to S171.8 for the quarter. The company ended the quarter with a net profit of S$ 15million, up 27% from last year. Its earnings per share grew nearly 30% to 1.27 cents per share after adjusting for the bonus issue in 2013.

The group’s borrowing stands at around S$ 848million. However, it has a relatively good financing rate on its borrowing of around 2% for both its fixed and floating debt. 2014 also marks the year when Roxy-Pacific made its first entry into the Australian market by acquiring a commercial property in Sydney.

Going Forward

The management indicated that the cooling measures from the Singapore government have affected the overall property market sentiment in Singapore. For its hotel business, the number of hotels projected to be completed this year was lower than expected, which might bode well for its Singapore-based hotel.

Foolish Summary

Roxy-Pacific still has a stable stream of income coming till 2017 as it has pre-sale revenue of more than S$ 1.0billion currently. The company closed on 2nd May 2014 at S$ 0.575 per share. It is trading at a P/E ratio of 7.1 times and has a dividend yield of about 3.3%.