First Sponsor (ADN) H2 2023 earnings summary

Executive summary

• FY2023 attributable profit fell 90.5% YoY to S$12.5m, its lowest level since the 2014 IPO; European property operating income rose 9.5% to €46.7m.

• 2H2023 attributable profit fell 96.8% YoY to S$1.9m, mainly on lower PRC development handovers and margins, and lower FX gains net of derivative fair-value losses.

• Recommended final tax-exempt dividend of 3.1 Singapore cents/share; if approved, FY2023 dividends total 4.2 cents/share, up 10.5% YoY.

Financial highlights

• FY2023 revenue was S$282.9m, down 33.8% YoY; 2H2023 revenue was S$147.0m, down 52.9%.

• FY2023 gross profit fell 36.0% to S$131.9m and PBT fell 85.8% to S$27.7m; attributable profit was S$12.5m versus S$131.3m in FY2022.

• Basic EPS was 1.29 cents and diluted EPS was 1.08 cents in FY2023, down 90.9% and 89.1%, respectively.

• Lower development and financing gross profit, FX movements, higher finance costs and weaker associate/JV results weighed on earnings; lower impairments partly offset declines.

Outlook and guidance

• A substantial number of PRC projects can begin handing over at least part of their developments in FY2024; improved buyer confidence could support additional sales recognition.

• PRC projects are being marketed through a longer-term approach to preserve operating margins rather than substantially reduce selling prices.

• PRC property financing is expected to contract further in FY2024 amid cautious new lending and loans falling due.

• Puccini Milan and Prins Hendrikkade Amsterdam redevelopments are expected to start in FY2024 and complete in FY2025; Dreeftoren office and residential components are due in 2Q2025 and 2Q2026.

• CTC Sydney is expected to complete in FY2027; renovated Bilderberg hotels are expected to contribute full-year income from FY2024.