SINGAPORE (Aug 7): Perennial Real Estate Holdings reported revenue for 2Q19 ended June surged 52.4% to $27.6 million from $18.1 million. However earnings fell 74.9% to $2.2 million from $8.6 million on the back of higher finance costs.
Revenue growth for Perennial was driven mostly from Capitol Singapore and Perennial International Health and Medical Hub (PIHMH), as well as higher fee income from its management businesses. China remains the biggest revenue contributor with $13 million or 46.9% of revenue compared to Singapore, which contributed $9.9 million or 36% of revenue.
Finance costs for 2Q19 surged 54.1% to $31.8 million from $20.6 million due to higher interest rate and increased borrowings as additional loans were taken to fund investments. Also interest expenses previously capitalised on from the PIHMH were expensed off on the completion of the project.
This resulted in earnings per share of 0.13 cent per share for 2Q19, down 75% from 0.52 cent per share a year ago.
Looking ahead, Perennial is seeing a good take up strata sales of office units in its 111 Somerset project in Singapore and intends to build on its momentum. Capitol Singapore’s retail repositioning is also on track and expected to be completed by 3Q19.
"With Capitol Singapore and PIHMH securing over 90% committed occupancy to date, their contributions to the revenue line are expected to grow as more tenants commence operations over time," says Perennial.
In China, Perennial’s assets in Qingyang and Foshan has been performing consistently well, while its health and medical hub performance is expected to ramp up with the scheduled opening of Gleneagles Chengdu hospital in 3Q2019.
The company is also looking to grow its footprint near high speed railway stations through sourcing for more sites for injection into the healthcare joint venture.
As at 11.14am, shares in Perennial are up 1.5 cents at 60 cents.
