Home-grown property developer Oxley Holdings has reported earnings of $23.5 million for the 1HFY2022 ended December, 3% higher than earnings of $22.7 million.
This came despite the decline in revenue for the 1HFY2022 and net profit after tax (NPAT).
During the period, revenue fell 13% y-o-y to $506.4 million due to lower revenue contribution from Oxley’s Royal Wharf project in the UK. This was partly offset by higher revenue from the development projects in Singapore and sale of land parcels in Australia.
Cost of sales fell 12% y-o-y to $432.8 million.
Accordingly, gross profit declined 19% y-o-y to $73.6 million.
1HFY2022 NPAT of $23.4 million was 18% lower y-o-y primarily due to flow-through of lower revenue and gross profit and partially offset by absence of a loss from discontinued operations of $14.9 million in 1HFY2021.
See also: Trump wins Republican nomination, setting up rematch with Biden
Interest income was up 26% y-o-y to $6.0 million.
1HFY2022 earnings per share (EPS) stood at 0.55 cents on a diluted basis, up from the EPS of 0.54 cents in the 1HFY2021, due to the loss per share of 0.36 cents from discontinued operations.
During 1HFY2021, the group generated positive cash flows of $266.5 million from operating activities arising mainly from collection of sale proceeds from the Singapore development projects as the construction progresses, completion and delivery of overseas development projects to the buyers, and sale of land parcels in Australia.
As at Jan 25, Oxley has a total unbilled contract value of $1.8 billion, of which $1.5 billion was attributable to the projects in Singapore. The remaining $0.3 billion was attributable to overseas projects.
According to the group, 97% of its Singapore residential units has been sold, which means it is less likely to be significantly affected by the property cooling measures introduced in December 2021, where the additional buyers’ stamp duty (ABSD) was increased.
The remaining units, which make up 3% of Oxley’s Singapore portfolio, are in the mid-mass market segment that are attractive to the first-time buyers, says the group.
Also in Singapore, Oxley’s Novotel and Mercure Hotels on Stevens have been signed up as Stay-Home Notice (SHN) dedicated facilities from the onset of the Covid-19 outbreak and have been generating positive operating cash flows.
For overseas markets, the Royal Wharf township development project in London is fully completed and has been 100% sold. Construction of the 100% sold Dublin Landings project has been completed, with the last residential block delivered to the buyer before the end of 1HFY2022.
All retail, residential and office units were completed at The Peak project in Cambodia and 91% of the project has been sold. Construction of the Shangri-La Hotel at The Peak is on-going and expected to be completed in early 2023 while The Palms project will be completed and delivered to the buyers in 2022.
As at end-December, cash and cash equivalents stood at $165.6 million.
For more stories about where money flows, click here for Capital Section
In its outlook statement, Oxley says it intends to focus its property development activities in developed countries that generate relatively higher profit margin as its Singapore development projects have been substantially sold.
Oxley is currently focusing on its Riverscape project in the UK and Connolly Station project in Ireland.
Riverscape’s total gross development value (GDV) is estimated to be around $685 million, while Connolly Station’s GDV is estimated to be around $1.4 billion.
“Despite a challenging 2021 that witnessed a series of road bumps from Covid-19 virus outbreaks, the group achieved significant milestones including temporary occupation permits (TOP)s for three Singapore residential developments, completing constructions of The Peak (except for ShangriLa Hotel component of the development) and Dublin Landings projects, and commencing construction of new Riverscape and Connolly Station projects in the developed markets. Between January 2021 and January 2022, the group secured new sales of approximately $1.3 billion,” says Ching Chiat Kwong, Oxley’s executive chairman and CEO.
“Prospects of the hospitality sector are expected to brighten as more countries transition to endemic living with Covid-19 and gradually easing their borders. Though [the] US Federal Reserve is hiking rates, Singapore interest rates are likely to lag in the rise due to monetary policy by the Monetary Authority of Singapore. The mid-mass market offerings by the group are likely to remain affordable to the buyers, supported by a steadily recovering global economy,” he adds.
“As the world enters the third year of the pandemic, Oxley will continue to pro-actively manage the evolving situation to complete and sell the ongoing projects promptly to generate positive cash flows for the group.”
As at 10.47am, shares in Oxley are trading 0.1 cent higher or 0.55% up at 18.4 cents.
Photo: Oxley
