Latest Earnings From Perennial Real Estate Holdings Limited: Preparing itself For The Future

Perennial Real Estate Holdings Limited (SGX: 40S) had released its fiscal first-quarter earnings (for the three months ended 31 March 2016) last Friday.

As a brief background for some context, Perennial is a real estate owner, developer, and manager that focuses on China, Singapore, Malaysia, and Ghana.

With that, let’s dig into the earnings.

Financial highlights

The following’s a quick summary of some of the latest financial figures from Perennial:

  1. Gross revenue for the quarter came in at S$29.5 million, up 9% from the same quarter a year ago.
  2. But, profit attributable to owners came in at S$8.5 million for the quarter, up a staggering 148%.
  3. Earnings per share (EPS) followed suit, nearly doubling from 0.27 cents in the first-quarter of 2015 to 0.51 cents.
  4. The company ended the reporting quarter with a net asset value per unit of S$1.632.
  5. For the year ending 31 March 2016, Perennial had S$131.8 million in cash and equivalents and S$2.22 billion in total debt, resulting in a net debt position of S$2.09 billion. Perennial’s balance sheet had weakened compared to the previous sequential quarter when it had S$162 million in cash and S$2.01 billion in debt
  6. Free cash flow (FCF) came in at S$48.3 million (Operating cash flow of S$48.3 million and capital expenditure of just S$15,000). This is higher than a year ago when FCF stood at a negative S$10 million (operating cash flow of a negative S$9.5 million and capex of S$0.5 million).

Operational highlights

The growth in revenue came mainly from higher project management fee and higher revenue recorded by Perennial Qingyang Mall in Chengdu.

Earnings before interest and taxes increased largely on the back of contributions from operating assets in Singapore and China, income from fee-based management businesses, a fair value gain from Chengdu Plot D2, and the share of results of AXA Tower which was acquired in April 2015.

Lastly, Perennial’s bottom-line had benefitted from a revaluation gain of S$7.5 million on the Chengdu East High Speed Railway Integrated Development Plot D2.

What’s happening next

In Singapore, Perennial’s TripleOne Somerset and AXA Tower properties have received all the relevant regulatory approvals for planned asset enhancement works which are expected to start in the second-quarter of 2016. Perennial estimates that the upgrades to TripleOne Somerset will cost less than S$150 million.

In China, the company’s hard at work building the Chengdu East HSR Integrated Development, Xi’an North HSR Integrated Development and Beijing Tongzhou Integrated Development.

Within the Chengdu East HSR Integrated Development, construction for Perennial International Health and Medical Hub is expected to be completed in the fourth-quarter of 2016 with parts of the property ready to commence operations in the first-quarter of 2017. Construction works for the initial phase of Chengdu Plot D2 within the same integrated development is expected to be done by end-2016.

At close on Friday, Perennial was trading at a price of S$0.92, representing a price-to-book value of 0.56.

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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 any companies mentioned.