Far East Consortium (35) H1 2025 earnings summary

Executive summary

• Revenue for 1H FY2025 declined 18.7% year-over-year to HK$5.2 billion, mainly due to fewer completed and settled residential property projects.

• Net loss attributable to shareholders was HK$770 million, impacted by higher finance costs, impairments, and fair value losses, compared to a profit of HK$232 million in 1H FY2024.

• Adjusted cash profit (non-GAAP) was HK$139 million, remaining positive despite a 77.5% year-over-year decline.

• Recurring income businesses (hotel, car park, gaming) showed resilience, with recurring revenue up 2.2% to HK$1.6 billion.

• The Group maintained a focus on deleveraging, cost control, and monetising non-core assets to strengthen its financial position.

Financial highlights

• Finance costs totaled HK$497 million, with impairment losses including HK$204 million on the QWB project and HK$270 million from JV property development.

• Adjusted gross profit before depreciation fell 25.1% to HK$1.6 billion, with a margin of 31.2% (down from 33.9% YoY).

• Interim dividend per share was HK$0.01, down from HK$0.04 in the prior year.

• Adjusted net asset value per share was HK$10.81 as at 30 September 2024.

• Liquidity position was HK$4.5 billion, with HK$5.4 billion in unencumbered hotel assets and unsold inventory.

Outlook and guidance

• Active residential development pipeline GDV of HK$65.9 billion supports revenue growth for 6–8 years without urgent land replenishment.

• Focus remains on cost control, debt reduction, and monetisation of non-core assets to maintain a healthy balance sheet.

• Several major projects nearing completion are expected to boost cash flow and reduce leverage.

• Anticipates positive impact from new hotel openings, asset-light expansion, and the Hong Kong Sports Park.

• No specific full-year dividend guidance, but commitment to a sustainable payout ratio.