SINGAPORE (Apr 29): Thakral Corporation reported 1Q19 earnings of $2 million, down 42% from a year ago.
Thakral has an investment division that invests in real estate and develop and manage retirement resorts in Australia under the GemLife brand.
The other is a lifestyle division that focuses on marketing and distributing brands in the beauty, wellness and lifestyle categories.
Thakral says the weaker bottomline was mainly due to the absence of income in 1Q19 from the investment division’s projects – Fortitude Valley, Newstead and Progress Road – that had been completed during in the financial year.
Earnings in 1Q19 also included $0.2 million share of profit from associates and joint-venture entities on the group’s Japanese property investments under TJP and the group’s GemLife joint venture for the development and management of retirement resorts in Australia.
Revenue for 1Q19 of $25.9 million, 36% lower mainly due to the continued slowdown in sales to $18.5 million from the lifestyle division's principal market of China.
This was exacerbated by the Chinese government’s announcement in early March about the revision of VAT rates from April which led to customers holding off purchases in expectation of price reductions.
Sales from the investment division was also 22.1% lower at $7.4 million, mainly due to the lack of contribution from completed projects.
Consolidated gross profit consequently declined by 20% to $10.3 million for the current quarter from $12.9 million previously.
Profit from operations of $3.8 million for the quarter was 43% lower than $6.8 million achieved in the previous corresponding quarter as profits from projects that closed in the previous corresponding quarter have not been replaced by new projects.
Natarajan Subramaniam, independent non-executive chairman and lead independent director of Thakral, says, “With Australia’s residential and commercial real estate segments remaining soft, the Group’s Investment Division will concentrate on growing the GemLife retirement living business. Demand for retirement housing remains robust amid the property downtrend in Australia. The Group’s investments in Singapore and Japan are likely to continue to realise good returns for us as shown in our first quarter results.”
Shares in Thakral closed 3.5 cents lower at 52 cents on Monday.
