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Frasers Property Ltd’s Latest Earnings: Surge In Revenue And Profits

Frasers Property Ltd (SGX: TQ5) reported its first-quarter earnings for the fiscal year ending 30 September 2019 on Tuesday evening.

Frasers Property is a multi-national company that owns, develops and manages a diverse portfolio of properties. The properties are geographically spread out over 80 cities across Asia, Australia, Europe, the Middle East, and Africa. At the end of September 2018, Frasers Property had total assets worth approximately S$33 billion.

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  1. Revenue increased by 44.7% year on year to S$1.08 billion.
  2. Profit (before fair value changes and exceptional item) rose 87% to S$507.2 million. If we include fair value changes and exceptional items, attributable profits would have risen by 76.1% to S$145.6 million from S$82.7 million. Fraser Property noted that the increase in earnings was boosted by recurring income sources from UK and Singapore and development profits from project completions in Australia and China.
  3. Consequently, earnings per share (after fair value changes and exceptional item) ticked up 67.5% to 4.74 cents.
  4. The property owner generated an operating cash flow of S$362.2 million, while capital expenditure came in at S$6.9 million. The combination of higher operating cash flow and lower capital expenditure resulted in an FCF of S$355.3 million. The FCF was higher compared to the sample period in the previous year when FCF came in at negative S$178.7 million (based on an operating cash flow of negative S$165.2 million and a capex of S$13.5 million).
  5. As of 31 December 2018, Frasers Property’s net debt position stood at S$12.2 billion (borrowings stood at S$15.1 billion and cash and bank deposits were S$2.89 billion) which was slightly lower sequentially when net debt position came in at S$12.3 billion (borrowings of S$14.9 billion and) cash and its bank balances were S$2.6 billion).
  6. Net asset value for Fraser Property came in at S$2.56 per share at the end of the quarter, remaining flat sequentially.

The Road Ahead

Mr. Panote Sirivadhanabhakdi, Group Chief Executive Officer of Frasers Property, commented on its recent quarter:

“We continued to reap the benefits of having a balanced portfolio of development projects and investment properties this quarter. Earnings were boosted by sales and settlements of our residential development projects in Australia and China, as well as an enlarged base of recurring income assets following our acquisition of six business parks in the United Kingdom last year. In addition, maiden contributions from our Frasers Tower office building and the south wing of our Northpoint City shopping mall in Singapore gave our results a lift.”

“Over the course of the coming year, we will be working on new residential property launches in Singapore and Australia, as well as enhancing the operating performance of the Group’s investment properties through asset value creation and enhancement. Strengthening our network of platforms remains a key focus as well. Following TICON’s annual general meeting on 25 January 2019, during which its shareholders approved the rebranding of TICON and its subsidiaries, TICON is now renamed Frasers Property Thailand. This is a significant moment for the Group. Having all our people behind a single brand and sharing one set of core values fosters stronger bonds, and we look forward to enhanced synergies arising from the Group’s scale and network.”

Units of Fraser Property closed trading on Tuesday at S$1.69, sporting a price-to-book ratio of 0.66 and a dividend yield of 5.1%.

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Motley Fool Singapore writer, Esjay contributed to this article.

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 owns shares in Frasers Property Ltd. The Motley Fool Singapore director, David Kuo, does not own shares in Fraser’s Property Ltd.