Far East Orchard (O10) H2 2023 earnings summary

Executive summary

• FY2023 net profit rose to S$66.1 million, mainly on S$58.3 million of fair value gains on investment properties, primarily in the UK PBSA portfolio.

• Revenue increased 30.3% YoY to S$183.6 million, supported by stronger Hospitality performance and stable PBSA income.

Financial highlights

• Operating profit rose 7.2% YoY to S$57.9 million; profit after income tax was S$66.1 million versus S$21.5 million in FY2022.

• Profit attributable to equity holders was S$66.0 million versus S$21.9 million; expenses rose 22.1% to S$84.7 million amid inflation, higher staff costs and finance expenses.

• Fair value gains on investment properties were S$58.3 million, up from S$2.6 million in FY2022; gains were mainly from the UK PBSA portfolio.

Outlook and guidance

• Around 600 hospitality rooms are expected to open in 2024 across Australia, Germany and Singapore.

• Hospitality outlook is cautiously optimistic; international tourism is expected to recover to pre-pandemic levels in 2024, subject to economic and geopolitical risks.

• UK PBSA demand and rental growth are expected to remain strong in 2024; the portfolio will be expanded through potential strategic opportunities.