SINGAPORE (Feb 9): REIT management company ARA Asset Management posted 28% lower earnings of $18.5 million in 4Q, from $25.6 million a year ago.
Excluding certain one-off items, ARA Asset’s adjusted net profit in 4Q improved by 4% at $21.0 million, compared to $20.1 million a year ago.
This brings full year ARA Asset’s earnings to $88.7 million in FY2016, an increase of 14% from earnings of $78.1 million a year ago.
Adjusted net profit for FY2016 was $92.1 million, 13% higher than the $81.4 million recorded in FY2015.
Revenue in the quarter dipped by 1% to $45.5 million as a 10% increase in management fees to $37.9 million was offset by lower acquisition, divestment and performance fees as well as finance income.
For FY2016, ARA Asset saw revenue increase 13% to $176.8 million, from $156.0 million a year ago.
Total expenses in 4Q surged 45% to $23.9 million, from $16.5 million a year ago.
This was mainly attributed to higher finance costs primarily due to a net loss of $4.7 million on fair valuation / disposal of financial assets during the quarter, compared to a net gain of $2.7 million recorded in 2Q15.
Administrative expenses also increased 13% to $13.1 million during the quarter, while other expenses in 4Q rose to $4.3 million from $2.7 million a year ago mainly due to higher professional fees.
The group’s share of profit of associates and joint ventures, net of tax, rose 25% to $1.4 million in 4Q, mainly due to higher income contribution from Cache Property Management.
ARA Asset’s total assets under management stood at about $35.6 billion as at Dec 31, 2016.
As at Dec 31, 2016, cash and cash equivalents stood at $109.1 million.
In Nov 2016, ARA Asset had announced a joint proposal by a consortium led by group founder and chief executive officer John Lim to privatise the company in a takeover offer at $1.78 per scheme share.
(See Confirmed: John Lim-led consortium to buy out ARA Asset Management in $1.8 bil deal)
“The proposed privatisation will not only deliver immediate value to shareholders but also provides ARA with an increased access to a deeper and more efficient capital to further scale its growth over the long term,” Lim says.
ARA Asset Management closed flat at $1.71 on Thursday.
