FPT’s 2Q Profit Jumps over 100 Folds from GOLD’s Performance and Lower Expenses

Frasers Property (Thailand) Public Company Limited (FPT) has reported its 2Q20 consolidated financial statement ending March 31, 2020, through the Stock Exchange of Thailand as follows;

FPT reported a net profit of 838 million baht in the second quarter of 2020, increased 1,009% from the same period of last year mainly due to the consolidated performance from GOLD and the decrease in total expenses of of Baht 464 million or 10%YoY to recorded at Baht 4,180 million .

FPT stated that 2Q20 total revenue recorded at THB 5,090 million, an increase of 10.43% QoQ. Recurring income growth of 1.85% YoY together with a THB 414 million gain from sales of land and divestment of FTREIT units provided earnings uplift and further unlocked the portfolio value

Impact to industrial property and commercial business remains limited given the long-term lease nature of tenants which provides certain degree of revenue visibility

 

Mr. Sopon Racharaksa, President of Frasers Property Thailand, said, “For the second quarter of fiscal year 2020, FPT registered total revenue at THB 5,090 million, an increase of 10.43% QoQ, but a slight dip of 7.60 % YoY amidst challenges arising from the COVID-19 outbreak and Thailand’s slowing domestic economy. Gain from sales of land and investment monetization of THB 414 million however provided an uplift to our earnings performance. We continue to remain prudent in our cost control with SG&A down by 6.75 %, leading to a recorded 2Q/2020 net profit of THB 851 million or a healthy increase of 9.42 % YoY”.

On 12 May 2020, the Board of Directors resolved to approve the capital increase by means of Right Offering (R/O) under the general mandate up to 15% of paid-up capital at THB 10.60 per share. Mr. Sopon remarked, “The additional capital will provide funding for planned CAPEX and give us additional bullets for bargain investments in this market”. Subscription will take place by the end of June 2020.

 

The industrial property business reported the 2Q20 revenue performance of THB 443 million, stabled YoY and QoQ, with gains from divestment of small FTREIT units as well as sales of land in the EEC area to Midea Group, a leading global home appliance provider based in China. As of 31 March 2020, cumulative net add softened to 52 K sqm due to the expiry of short-term leases, as well as social distancing measures that halted marketing activities. Impact to key tenants in the automotive and electronics sectors which accounted for 32% of total tenant mix remain limited at this juncture. Overall portfolio occupancy was well maintained at 80% this quarter, thanks to strong take-up of ready-built factories with occupancy at a five-year record high of 76% from 73% in 2Q/2019. We see ongoing demand from smart electronics and automotive, medical, plastic, metal and machinery sectors.

 

Residential property business booked 2Q20 revenue of THB 3,557 million, stabled QoQ but slipped by 19.08% YoY as a result of slowdown in residential property market following LTV and COVID-19 lockdown measures. As of 31 March 2020, Golden Land had a total pre-sales value of THB 7,398 million from 61 active projects, with a THB 2,875 million backlog awaiting to be transferred. Golden Land has delayed launches of new projects, with sales and marketing activities expected to pick up after COVID-19 when overall buying sentiment returns.

 

Commercial property business posted a healthy revenue growth of 5.08% YoY to THB 248 million, as the high quality commercial portfolio under Golden Land continues to perform strongly with an upside in pricing for prime grade A office in Central Business District locations. The retail sector of Samyan Mitrown saw a decline in footfall in March after the COVID-19 outbreak which was then escalated to closure of retail malls in April pursuant to the city lockdown. To provide rental relief for retail tenants, Golden Land launched ‘That’s what friends are for’ rescue package to waive the rent of selected tenants whose stores were closed under the emergency decree. The hospitality sector was also impacted by the travel ban and as a result, hospitality revenue dropped to THB 113 million, a dip of 21.74% QoQ and 26.32% YoY.

 

“We will continue to closely monitor the COVID-19 situation and to ensure that operations are carried out in a safe, effective and responsive manner. Precautionary safety measures have been put in place for the well-being for our customers and staff. These include temperature screening for all visitors to our sites, disinfectant spraying, distribution of sanitisers as well as implementing work-from-home policy for staff. With our diversified portfolio, we are confident of riding out this challenging period and will be ready to capture new opportunities when they arise,” Mr. Sopon concluded.