SINGAPORE, 8 AUGUST 2019
Frasers Property Limited (“Frasers Property”, and together with its subsidiaries, the “Group”) today announced its financial results for its third quarter and nine months ended 30 June 2019 (“3Q FY19” and “9M FY19”, respectively).
FINANCIAL HIGHLIGHTS
3Q FY19 (S$ ‘mil) |
3Q FY18 (S$ ‘mil) (restated2) |
Inc/(Dec) (%) |
9M FY19 (S$ ‘mil) |
9M FY18 (S$ ‘mil) (restated2)
|
Inc/(Dec) (%) |
|
Revenue |
638.8 |
1,361.7 |
(53.1) |
2,656.4 |
2,951.4 |
(10.0) |
PBIT1 |
268.8 |
359.3 |
(25.2) |
906.4 |
870.7 |
4.1 |
APBFE3 |
74.0 |
167.3 |
(55.8) |
313.9 |
353.6 |
(11.2) |
Fair Value Change |
246.6 |
30.3 |
N/M |
273.4 |
38.8 |
N/M |
Exceptional Items |
13.3 |
1.0 |
N/M |
12.6 |
- |
N/M |
Attributable Profit |
333.9 |
198.6 |
68.2 |
599.9 |
392.4 |
52.9 |
Mr Panote Sirivadhanabhakdi, Group Chief Executive Officer of Frasers Property, commented, “Our large base of recurring income sources continues to provide a good foundation to our earnings and helped to offset the inherent effects of lumpy development income contribution. In addition, our earnings in 9M FY19 benefitted from maiden contributions from our investment in PGIM Real Estate AsiaRetail Fund Limited (“PGIM ARF”).”
“Over the past few months, as part of our active portfolio management efforts, we have entered into a partnership with a strategic long-term investor in Frasers Tower, invested in PGIM ARF, and divested stabilised investment properties to the Group’s REITs. Effective portfolio management will remain our focus as we work to deliver long-term value for our stakeholders.”
KEY HIGHLIGHTS IN YEAR-TO-DATE FY19
Frasers Property continues to actively manage its balance sheet to optimise capital productivity. In June 2019, it raised S$442.7 million4 via an issuance of units in Aquamarine Star Trust, which holds Frasers Tower, to a long-term strategic investor. Following the issuance of units, Frasers Property and the strategic
investor each holds a 50% stake in Frasers Tower. More recently in July 2019, Frasers Property completed the divestment of its one-third stake5 in Waterway Point to Frasers Centrepoint Trust for S$240.5 million6 and announced the proposed divestment of 12 logistics and industrial properties in Germany and Australia to Frasers Logistics and Industrial Trust for S$481.8 million7.
The Group continues to diversify its funding sources. In July 2019, the Group secured its fifth green loan following the receipt of a A$750 million term loan comprising a A$500 million five-year green loan tranche and a A$250 million five-year tranche. The green loan tranche is the first green loan in Singapore linked to the BCA Green Mark8, incentivising sustainable practices through a pricing structure which offers interest cost savings if the two green properties it funds maintain the requisite green standards. In addition, Frasers Property issued a fourth series of perpetual securities, comprising a S$400 million tranche in April 2019 and a S$200 million tranche in July 2019, both of which have a 4.98% per annum distribution rate. In July 2019, the Group announced its intention to redeem the S$600 million 4.88% subordinated perpetual securities that was issued in September 2014.
The Group strengthened its presence in Singapore and Australia via several acquisitions in 3Q FY19. In Singapore, it acquired a ~53.7%9 stake in PGIM ARF, which owns five retail properties near suburban MRT stations in Singapore, one office property in Singapore, and four retail properties in Malaysia. In Australia, Frasers Property Australia (“FPA”) acquired 56 hectares of industrial land across three sites with an estimated total gross development value (“GDV”) of S$493 million10 and a residential site in Hardy’s Road, Victoria, that can yield approximately 1,545 land units with an estimated total GDV of S$458 million10.
LOOKING AHEAD
Frasers Property Singapore previewed its private residential development project Rivière in June 2019. 3211 units were sold during the preview, and the team remains focused on marketing the project. Meanwhile, Seaside Residences’ healthy sales momentum continued, with 90%11 of the project’s units sold as at 30 June 2019. On the retail front, the team will explore opportunities to collaborate and share experiences to enhance its mall offerings and better serve its communities.
On the residential front in Australia, 670 units12 were sold while 1,410 units12 were completed during the reporting period. Another 890 units12 are expected to be completed over the rest of the financial year. On the commercial & industrial (“C&I”) and retail development front, FPA completed and delivered nine assets, comprising two industrial assets and one retail asset with a combined GDV of S$54 million13 sold to third parties, as well as five industrial assets with an investment value of S$135 million13,14 and one industrial asset expansion with an investment value of S$5 million13,14 to be retained on the Group’s balance sheet. FPA is currently developing 14 new assets, comprising one commercial asset, two industrial assets and four retail assets with a combined GDV of S$506 million10 to be sold, as well as seven C&I assets with an investment value of S$254 million10,14 to be retained.
On the hospitality front, roll-out of the new and customised revenue management system to facilitate better yield management across all Frasers Hospitality properties will continue to be driven at both corporate and cluster levels. In addition, the Group will implement marketing strategies to ramp up occupancies at its newly-opened properties – Fraser Suites Hamburg, Germany; Fraser Residence Orchard, Singapore; and Capri by Fraser, China Square, Singapore. As at 30 June 2019, the Group has equity interests in and/or manages over 17,000 units and has around 4,000 units in the pipeline.
1 Profit before interest, fair value change, taxation, and exceptional items
2 The 3Q FY18 and 9M FY18 results have been restated to account for the retrospective adjustments on the adoption of the new
financial reporting framework, Singapore Financial Reporting Standards (International) framework and new/revised SFRS(I) as
detailed in Item 5 of the Group’s 3Q FY19 Financial Statements and Dividend Announcement
3 Attributable profit before fair value change and exceptional items
4 Subject to post-closing adjustments and based on 50% of Aquamarine Star Trust’s adjusted net asset value immediately after closing
on an agreed property value of S$1.96 billion
5 Comprising 331⁄3% of the total issued units of Sapphire Star Trust and 331⁄3% of the issued share capital of FC Retail Trustee Pte.
Ltd.
6 Based on Frasers Centrepoint Trust’s announcement on the Singapore Exchange Securities Trading Limited (“SGX-ST”) on
completion of its acquisition of Waterway Point dated 11 July 2019
7 Based on S$/A$ : 0.9500 and €1/S$ : 1.5400 exchange rates as at 12 June 2019
8 The BCA Green Mark is a Singapore green building rating system to evaluate a building for its environmental impact and performance
9 Refer to FPL’s announcement on the SGX-ST on its increase in shareholding in PGIM ARF dated 2 July 2019
10 Based on the exchange rate of S$/A$ : 0.9429 as at 30 June 2019
11 Including options signed
12 Includes 100% of joint arrangements – joint operation and joint venture – and project development agreements
13 Based on the average exchange rate of S$/A$ : 0.9645 over 9M FY19
14 Based on book carrying value in the Group’s investment property portfolio