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Frasers Centrepoint Limited’s Latest Earnings: What Investors Should Know

Yesterday, Frasers Centrepoint Ltd (SGX: TQ5) released its third-quarter earnings for the financial year ending 31 September 2017 (FY16/17) . The reporting period was from 1 April 2017 to 30 June 2017.

Frasers Centrepoint Limited is a real-estate owner and developer with total assets of around $25 billion, as of 30 June 2017. 

It divides its business into four main segments: Singapore SBU (strategic business unit), Australia SBU, hospitality SBU and international business. 

Frasers Centrepoint Limited is also the sponsor and manager of Frasers Centrepoint Trust (SGX: J69U), Frasers Commercial Trust (SGX: ND8U), Frasers Logistics and Industrial Trust (SGX: BUOU) and Frasers Hospitality Trust (SGX: ACV).

You can catch the previous quarter’s earnings here .

Financial highlights

Here’s a quick rundown of its financial figures for the second fiscal quarter:

1. Revenue more than doubled to S$1.4 billion, compared to a year ago.

2. Profit before interest, fair value change, taxation and exceptional items (that’s a mouthful!) was S$356.6 million, up 113.8% compared to a year ago.

3. Profit for the period was S$71.2 million, up 52% year-on-year. The previous year included a S$77.1 gain on fair value change.

4. Earnings per share was 6.21 cents, up from the 5.27 cents recorded in FY15/16’s third-quarter.

5. Frasers Centrepoint Limited had S$645.8 million in operating cash flow and spent S$179 million in development expenditure. The real-estate outfit generated free cash flow of S$466.8 million.

6. As of 30 June 2017, the company had S$1.51 billion in cash and equivalents and S$8.6 billion in debt. This is a slight improvement from S$1.55 billion in cash and equivalents and S$8.04 billion in debt it recorded in FY15/16’s second quarter.

Fraser Centrepoint Limited benefited from strong performances in its Australia SBU and international business. The real estate outfit generated positive free cash flow and remains in a net debt position.

Operational highlights

Among the key highlights:

1. Fraser Centrepoint Limited completed the S$495 million transaction for a 86.56% stake in Geneba Properties. The acquisition has logistics and industrial assets in Germany and the Netherlands. The trust has also offered a one-time cash offer for the remaining stake.

2. The firm also announced the sale of seven Australian industrial properties to Frasers Logistics and Industrial Trust for A$169 million.

The group’s chief executive Panote Sirivadhanabhakdi said:

“Our results continue to validate our longstanding strategy of growing our asset portfolio across select geographies and property segments, with the aim of achieving sustainable earnings, while capturing opportunities across property cycles. Our recent acquisitions of substantial stakes in TICON and Geneba were made in Thailand and Europe respectively, where the Group already has a presence; industrial and logistics is also a segment in which we have extensive capabilities in Australia.

These investments not only allow us to grow our overseas and recurring income sources, they also enable the Group to create a ‘network effect’ and grow alongside our customers as we now have a portfolio of logistics assets with scale across multiple geographies. We remain focused on exploring opportunities that allow the Group to harness our multi-sector expertise for further growth.”

Foolish summary

At its closing price of $1.90 on Monday, Fraser Centrepoint Limited traded at a dividend yield of 4.5%.   

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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 Chin Hui Leong owns units in Frasers Centrepoint Trust.