Roxy-Pacific's Q3 net profit crashes 34% to $8.8m

Higher unrealised forex gain lowered other operating income to $0.3m.

Property and hospitality group Roxy-Pacific Holdings reported a decline in its earnings for the past quarter ending in September, with net profit sliding 34% down to $8.8m from $13.3m.

According to the group's announcement, this was mainly due to the slump in its other operating income, which saw an 88% decrease from $2.8m to $332,000. This was because of the higher unrealised foreign exchange gain from revaluation of bank borrowings and fair value gain arising from change of owner-use property to investment property held for rental income in 3Q2015.

The decline in earnings is amidst its revenue growth of 4%, climbing up from $87.6m to $90.9 in the past quarter.

"Revenue from the Property Development segment, which made up 83% of the Group’s turnover in 3Q2016, increased 5% to $76.2 million in 3Q2016 from $72.8 million in 3Q2015. The increase was largely attributable to higher revenue recognition from Trilive, LIV on Sophia and LIV on Wilkie, partially offset by lower revenue recognition from Jade Residences and Whitehaven," the group said.

However, revenue from hotel ownership segment, which contributed 13% to Rocy-Pacific's turnover, slipped 2% to $11.5m while revenue from the property investment segment, which constituted the balance of 4% of the Group’s turnover, maintained at $3.2 million.

Meanwhile, the group noted that its distribution and selling expenses increased by $0.8 million to $1.3 million in 3Q2016 from $0.5 million in 3Q2015 mainly due to marketing and showflat expenses relating to the sales launch of Straits Mansions, Octavia and The Hensley.

"Administrative expenses decreased by $0.7 million to $3.2 million in 3Q2016 from $3.9 million in 3Q2015 mainly due to lower provision for directors’ incentive in 3Q2016," the group cited.

It furthered," Other operating expenses decreased by $2.8 million to $3.3 million in 3Q2016 from $6.1 million in 3Q2015 mainly due to lower fair value loss on cross currency interest rate swap, partially offset by higher depreciation expenses in 3Q2016."

More so, the group's depreciation expense increased from $0.7 million in 3Q2015 to $1.4 million in 3Q2016 mainly due to depreciation of new additions following completion of refurbishment works for the Group’s head office in Singapore and for the Noku Kyoto hotel in 3Q2015 and 4Q2015, respectively.

Consequently, its finance cost increased by $0.7 million to $4.2 million in 3Q2016 from $3.5 million in 3Q2015 mainly due to MTN Series Notes issued in July 2015 and working capital loans obtained to fund new investment in 117 Clarence Street and the resort property in Maldives.

"The Group’s share of results from associates after tax for 3Q2016 increased 13% to $4.0 million compared to $3.6 million in 3Q2015 mainly due to higher profits recognised from Eon Shenton, partially offset by the absence of profit recognition from Millage and Natura@Hillview due to Temporary Occupancy Permits (“TOP”) obtained in May 2016 and Sep 2015 respectively," Rocy-Pacific stated.