SINGAPORE (May 15): Mainboard-listed dormitory operator Centurion Corporation saw its revenue inch 13% up to $35.5 million in 1Q20 ended March, from $31.3 million a year ago.
The workers accommodation business segment grew 15% y-o-y in revenue to $22.8 million following the increased capacity at its purpose-built workers’ accommodation (PBWA) facility at Westlite Juniper in Singapore which commenced operations in 3Q19.
At this level, PBWA operations accounted for 64% of total revenue inflows, the company reported in a regulatory filing on May 14.
Meanwhile, revenue in the student accommodation segment also got a 13% lift y-o-y to $12.4 million namely from higher occupancy at its purpose-built student accommodation (PBSA) dwell Archer House in the UK and dwell East End Adelaide, Australia.
PBSA accommodations amounted to a 35% contribution to overall revenue for the quarter.
While the numbers are looking up, the company has flagged concerns of rising operating costs amid the Covid-19 pandemic.
Its PBWA at Westlite Toh Guan, for instance, came into the forefront on April 5 when it became a gazetted isolation site for migrant workers following a high incidence of Covid-19 infections there.
See: Centurion's Westlite Toh Guan dorm sees surge in Covid-19 cases
This also resulted in redevelopment plans there being held off.
“While the financial occupancy of our workers’ portfolio has not been impacted thus far, there are disruptions to the operations due to Covid-19 and operating costs are expected to increase,” noted CEO Kong Chee Min in the company’s 1Q20 business update.
Similarly, its PBSA facilities, particularly in the UK have been experiencing declining occupancy since April as several international students have returned home for virtual lessons.
As such, the company had announced in April that it will allow students residing at its UK PBSAs to terminate their remaining leases early for the ongoing academic year. This is expected to cost £3 million (S$5.3 million) and £5 million (S$8.8 million), depending on the take up rate.
See: Centurion's Covid-19 bug intensifies as it allows UK students to terminate their leases early with an expected £5m revenue loss
Kong foresees this lower demand and rent-waiver requests at PBSAs to continue if universities do not resume on-campus education.
“To mitigate this effect, we have worked with banks for support on loan repayment moratoria, strengthening cash flow management and cost controls,” he says.
As the Covid-19 pandemic shakes up Centurion’s core operations, Kong stresses that future expansion plans have been “put on hold across markets and will only be revisited and recalibrated when markets return to normalcy”.
As at 1.06pm, shares at Centurion were up 5 cents or 1.37% to 37 cents.
