Far East Consortium (35) H2 2024 earnings summary

Executive summary

• Revenue grew 57.5% year-over-year to HK$10.2 billion, driven by strong property development, hotel performance, and recurring income streams.

• Adjusted cash profit increased 35.5% to HK$780 million; net profit attributable to shareholders rose 31.3% to HK$226 million.

• Property development revenue surged 91.6% to HK$6.8 billion, with major settlements in Australia, UK, Singapore, and Malaysia.

• Strategic asset disposals and debt repayments improved liquidity and reduced gearing.

• Cumulative pre-sale value and unbooked contracted sales reached HK$11.5 billion, supporting future cash flow visibility.

Financial highlights

• Gross profit margin improved to 31% (from 31% prior year), with property development margin up from 19% to 25.5%.

• Gross profit increased by HK$1.2 billion to HK$3.2 billion; adjusted gross profit before depreciation up 61.4% YoY to HK$3.15 billion.

• Recurring income grew 17% to HK$3.2 billion; hotel revenue rose 31.2% YoY to HK$2.0 billion, supported by new openings and improved occupancy.

• Finance costs nearly doubled to HK$1.2 billion due to higher interest rates.

• Earnings per share rose 28.1% to HK8.2 cents; full-year dividend maintained at HK14.0 cents per share.

Outlook and guidance

• Pipeline of HK$65 billion ensures long-term growth over the next 6-8 years.

• Project completions in FY2025 expected to deliver HK$6 billion in revenue; launches planned for The Pavilia Forest (Hong Kong) and 640 Bourke Street (Melbourne).

• Eight new hotels to open in the next 24 months, expanding recurring income streams.

• Focus remains on early project completion, debt reduction, and monetizing non-core assets.

• Dividend policy maintained at 30-40% payout, with potential for increases as more projects complete.