SINGAPORE (July 25): First Sponsor Group, the property developer in the Netherlands and China, reported 2Q19 earnings of $15.1 million, 24.7% higher than the $12.1 million reported in 2Q18.
Revenue came in 80.1% higher at $79.4 million due mainly to a $34.2 million and $4.1 million increase in revenue from sale of properties and hotel operations respectively.
The increase in revenue from sale of properties in 2Q19 was due mainly to the recognition of revenue from 99 more commercial units in the Millennium Waterfront project in 2Q19 compared to just one unit in 2Q18.
Revenue from property financing and rental income from investment properties by $0.4 million and $0.7 million respectively.
Revenue from hotel operations increased 34.4% to $16.0 million due mainly to a full quarter contribution from the 94.9%-owned Westin Bellevue Dresden Hotel which was acquired in late of March.
Gross profit for the group increased 93.7% to $54 million.
The group recorded a tax expense of $14.7 million on profit before tax of $29.8 million in 2Q19. This included land appreciation tax of $8.3 million and under provision in respect of prior year of $0.3 million.
For 1H, earnings rose 33.1% to $38.9 million.
First Sponsor has declared an interim dividend of 1.1 cents per share.
In its outlook statement, First Sponsor says China home prices and transaction values in 1Q19 have remained steady in the first- and second-tier cities and expects this to continue throughout 2019, save for third- and fourth-tier cities which will face challenges due to limited demand.
The group says it will continue to grow its property financing business in the China and Australia in a prudent manner.
Meanwhile, the Netherlands is planning to encourage developers to build an average of 75,000 houses a year though its feasibility has been put in doubt by rising construction costs and the shortage of construction sites and skilled workers.
Shares in First Sponsor closed at $1.31 on Wednesday.
