Far East Orchard (O10) Q3 2023 TU earnings summary

Executive summary

• 9M FY23 revenue rose 36.7% YoY to S$134.1m as hospitality recovered; higher operating and financing costs and the absence of prior-period one-off gains kept profit after tax flat at S$7.0m.

• Hospitality and UK PBSA remained resilient, with hotel performance improving and student housing occupancy at 99%.

Financial highlights

• Revenue was S$134.1m versus S$98.1m, up 36.7% YoY; operating profit was S$40.9m versus S$37.6m, up 8.8%.

• Profit after income tax was S$7.0m, flat YoY; profit attributable to equity holders rose 18.8% to S$7.6m from S$6.4m.

• Excluding a one-off prior-period gain from lease-liability derecognition, 9M FY23 profit after tax would have been S$7.6m higher YoY.

Outlook and guidance

• Cautiously optimistic about a full return of international tourism in 2024, while inflation, oil prices and geopolitical tensions may affect travel behaviour and costs.

• UK PBSA demand and supply imbalance is expected to support rental growth and development opportunities; target is 5,000 beds by 2025.

• Focus remains on revenue growth, prudent cost management and strategic opportunities for sustainable long-term growth.