Profits Plunge At Roxy Pacific

Roxy-Pacific Holdings Ltd (SGX: E8Z) is a property group that was listed on the Singapore Exchange in 2008.

The Group is mainly engaged in the development and sale of residential and commercial properties. It also owns three hospitality assets and three investment properties.

In its latest first-quarter results:

  1. Revenue for the quarter came in at S$102.9 million, down 48% from last year.
  2. Profit after tax dropped 76% to S$10.9 million from S$46.3 million.
  3. Earnings per share (EPS) followed suit, sinking 79% to 0.83 Singapore cents for the quarter.
  4. Cash flow from operations stood at a negative S$104 million, and capital expenditure was S$0.6 million, resulting in a negative cash flow of S$104.6 million. This is a significant decrease from a year earlier, when it was a positive S$117.6 million (Operating cash flow of S$118.1 million and capital expenditure of S$0.5 million).
  5. Net Asset Value (NAV) increased 2.6% from S$0.383 to S$0.393.
  6. As at 31 March 2016, Roxy Pacific had S$883.5 million in debt and cash and cash equivalents of S$259.2 million. That resulted in a net debt of S$624.3 million. This is an increase from the net debt position of S$462.2 million seen in first quarter 2015 (Cash and equivalents of S$359.1 million and debt of S$821.3 million).

In summary, Roxy Pacific saw its revenues, profit and free cash flow slip during the quarter. In addition, the company’s balance sheet weakened year on year, as net debt increased. The only positive was the increase in NAV seen during the quarter.

Operational Highlights

Property Development revenue decreased 52%, due to absence of revenue recognition from the completion of Centropod @ Changi, which was completed in the first quarter of 2015. This was the main reason for the drop in revenue and profit for this segment.

Despite the drop the segment had revenue recognition from three residential properties for the quarter. Also the company has S$341.8 million in pre-sale revenues that will be recognised progressively from second quarter 2016 to 2020.

Revenue from the hospitality assets increased 7% year on year, on the back of contribution from Noku, Kyoto, which commenced operation in November 2015.

Also Grand Mercure Roxy Hotel (“GMRH”) maintained an average occupancy rate (AOR) of 89.1%, an average room rate (ARR) of S$163.90 and revenue per available room (RevPar) of and $146.0 in 1Q2016, compared to 1Q2015 (AOR: 87.2%, ARR: $172.5 and RevPar: $150.4).


Roxy Pacific mentioned in its earnings reports that it expects to perform satisfactorily for the rest of 2016, barring any unforeseen circumstances.

Foolish take away

Revenue from the Property Investment segment remained consistent with the comparable quarter in 2015, generating revenue of $3.0 million in the first quarter of 2016.

The company’s share closed at S$0.49 last evening and is trading at a Price to Book (P/B) of 1.26.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Esjay does not own shares in Roxy Pacific Holding Ltd.