Roxy-Pacific Holdings Ltd’s Latest Earnings: What’s Behind The 57% Surge in Net Income?

Roxy-Pacific Holdings Ltd (SGX: E8Z) just released its fiscal second-quarter earnings on Friday.

For a quick background, the company is a property group that was listed on Singapore’s stock market in 2008. Its main business is in the development and sale of residential and commercial properties and the ownership of real estate.

With that, let’s jump into Roxy-Pacific’s latest earnings.

Financial highlights

The following are some of Roxy-Pacific’s latest financial figures:

  1. Revenue for the quarter came in at S$98.4 million, up 5% from a year ago.
  2. Profit after tax, however, surged by 57% to S$20.6 million, underpinned by a “S$13.4 million increase in other operating income due to higher fair value gain on investment property and a 22% rise in share of results from associates of S$3.6 million.”
  3. Consequently, earnings per share (EPS) soared by 53% to 1.67 Singapore cents in the reporting quarter.
  4. As at 30 June 2016, Roxy Pacific had S$897.4 million in total debt and cash and cash equivalents of S$247.7 million. This is a decline from the total debt of S$765.9 million and S$261.8 million in cash & fixed deposits reported a year ago.
  5. Roxy-Pacific’s net asset value (NAV) per share had increased slightly, up by 6.8% from S$0.369 on 30 June 2015 to S$0.394.

In summary, Roxy-Pacific saw growth in both its top- and bottom-line. But, the growth seems to have come at the expense of its balance sheet strength given that the net debt position in June 2016 had increased markedly from June 2015.

Operational highlights and the road ahead

Roxy-Pacific has three business segments, namely Property Development, Hotel Ownership, and Property Investment.

Property Development revenue in the reporting quarter rose by 5% on the back of higher revenue recognition from three projects – Trilive, LIV on Sophia and LIV on Wilkie – that offset lower revenue from the Jade Residence and Whitehaven projects.

Revenue from Hotel Ownership was up 11% year-on-year to S$11.9 million. Contributions from Noku Kyoto Hotel, which was launched in November 2015, had helped.

Lastly, the Property Investment segment saw its revenue decline from S$3.2 million in the second-quarter of 2015 to S$3.0 million in the reporting quarter.

Looking ahead, Roxy-Pacific’s directors “expect the Group to be profitable in 2016.”

The company’s shares closed at a price of S$0.46 each last Friday and are trading at a price to book (P/B) of 1.2.

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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 James Yeo doesn’t own shares in any companies mentioned.