Rachael Boon

Beverage firm Fraser and Neave (F&N) posted improved third-quar-ter results owing to a higher stake in a Vietnamese dairy firm.

Net profit soared 59.9 per cent to $60.7 million for the three months to June 30 before exceptional

items, the firm reported yesterday. If exceptional items were in-

cluded, net profit rocketed to $1.26 billion from $38.6 million in the same period a year earlier.

The firm said the increase came mostly from its higher stake – now 18.74 per cent – in Vietnam Dairy Products Joint Stock Co (Vinamilk).

That also boosted dividend in-

come and led to more earnings from the dairies segment, as profit from Vinamilk was recognised for the first time, starting from April 16.

Quarterly revenue slid 8.6 per cent to $483 million.

F&N reported the food and bever-age division had earnings grow 44 per cent to $85.2 million. It added that revenue reported for the bever-age segment alone was 17.1 per cent lower compared with last year.

“Despite healthy sales volumes in Singapore due to the Hari Raya fes-tivities, pricing pressures from com-petitors resulted in a decrease in sales revenue.

“In Malaysia, weak consumer sen-timent amid higher inflation and subdued Hari Raya sales led to the decrease in revenue,” said F&N.

However, the beverage seg-ment’s turnover was helped by con-tribution from a vending business acquired in July last year, and the distribution of third-party brands.

“Revenue for the Singapore beer business also increased as a result of strong growth momentum in all distribution channels,” F&N added.

In the dairies segment, revenue dipped 3.3 per cent to $276.1 mil-lion compared with the same pe-riod a year ago.

Turnover in Singapore and Malaysia decreased owing to “weaker consumer sentiment and competitive price pressure”, said the firm.

It added that the drop was partly offset by better export sales, and sales in the Myanmar market, seen as gaining traction.

F&N said: “In the markets where the group operates in, consumer sentiments in the food and bever-age segment are expected to re-main subdued against a backdrop of continuing cost and pricing pres-sure.”

However, it is optimistic about the beverage segment in Vietnam and Myanmar, and “will continue its investments in new markets while seeking new opportunities in the food segment”.

Quarterly earnings per share was 4.2 cents, compared with 2.6 cents a year earlier, before exceptional items. Net asset value per share was $1.98 as at June 30, compared with $1.97 as at Sept 30.

F&N shares fell five cents to $2.34 yesterday before the results were re-leased.

rachaelb@sph.com.sg

F&N said revenue reported for the beverage segment alone was 17.1 per cent lower compared with last year. “Despite healthy sales volumes in Singapore due to the Hari Raya festivities, pricing pressures from competitors resulted in a decrease in sales revenue.” PHOTO: BLOOMBERG

Q3 earnings up 60% as Vinamilk profit from Vietnam is recognised for first time

AT A GLANCE

Q2 NET INTEREST INCOME AND HIRING CHARGES:S$42.6 million (+25.3 per cent)

Q2 NET PROFIT:S$20.9 million (+89.1%)

AT A GLANCE

Q3 REVENUE:$483 million (-8.6%)

Q3 NET PROFIT:$60.7 million (+59.9%)

AT A GLANCE

Q2 REVENUE:$17.9 million (-25.9%)

Q2 NET PROFIT:$17.1 million (comparisons not meaningful)

AT A GLANCE

Q2 REVENUE:US$19.1 million (-0.3%)

Q2 NET PROPERTY INCOME:US$12.8 million (+3.7%)

Q2 DISTRIBUTION PER UNIT:1.58 US cents (+7.5%)

Ann Williams

Manulife US Real Estate Invest-ment Trust, the first pure-play US office Reit listed in Asia, an-nounced yesterday a distribution per unit (DPU) of 1.58 US cents for the second quarter ended June, 7.5 per cent higher than it projected.

The Reit, which gained its Singa-pore listing in May last year, recorded net property income of US$12.8 million (S$17.4 million), which was 3.7 per cent above pro-jection, while gross revenue at US$19.1 million was 0.3 per cent be-low projection due to lower recov-eries income.

This was partially offset by higher rental and other income, mainly arising from rental escala-tions and higher carpark income.

For the first half-year, it achieved DPU of 3.23 US cents, 8 per cent higher than projected, on net property income of US$25.6

million and revenue of US$39.7 mil-lion. As at June 30, the Reit’s portfo-lio valuation grew 2.8 per cent over the half-year to US$857.5 million.

With a high occupancy rate of 95.9 per cent based on committed leases, weighted average lease ex-piry of 5.3 years and limited per-centage of leases expiring in 2017, the Reit manager said it expects the portfolio to deliver a stable per-formance.

Market conditions continue to be generally favourable in the three markets that Manulife US Reit has invested in, with minimal new supply and rising market rents, it said.

“During this period, we an-nounced our maiden acquisition of 500 Plaza located in New Jer-sey,” said Manulife US Real Estate Management chief executive Jill Smith.

“This acquisition demonstrates growth and scalability, and will start to contribute from the third quarter of 2017 onwards.”

Separately, the Reit said it had en-tered into a loan agreement with Wells Fargo Bank, National Associ-ation, for an aggregate principal amount of up to US$51.6 million, se-cured partly by a first mortgage on the 500 Plaza property.

Manulife Reit units yesterday rose half a cent to 92.5 US cents.

ann@sph.com.sg

Perennial Real Estate Holdings reported yesterday that its second-quarter net profit jumped to $17.1 mil-lion from $594,000 a year ago on a fair value gain of $16.6 million.

This gain came from the revaluation of Xi’an North High Speed Railway Integrated Development Plot 4. The property was reclassified as an “invest-ment property” after a strategic review to hold it for long-term investment and to lease the various com-ponents within the integrated development for rental. Talks are currently underway to lease out the hotel component, said the company.

Revenue for the three months to end-June fell 25.9 per cent to $17.9 million, largely due to lower project management fees as well as the absence of revenue from TripleOne Somerset as a result of the deconsoli-dation following the divestment of a 20.2 per cent equity stake on March 31.

This was partially offset by a one-off divestment fee received in respect of TripleOne Somerset.

No dividend was declared for the quarter.In Singapore, Perennial said major enhancement

works are progressing at TripleOne Somerset and AXA Tower. It added that total strata sales to-date at TripleOne Somerset increased to about $21.6 mil-lion, with a number of strata office units transacted at an average price of about $2,788 per sq ft (psf).

Total strata sales at AXA Tower amounted to about $41 million, with a number of strata office units transacted at an average price of about $2,559 psf. Units on the low-zone and mid-zone were trans-acted at about $2,450 psf and close to $3,000 psf re-spectively.

Perennial and Chinese developer Yanlord Land Group have made a bid for century-old Singapore property group United Engineers Ltd (UEL). Last month, it acquired OCBC’s 33.5 per cent stake in UEL, triggering a mandatory general offer for the company that will close on Aug 29. The consortium also acquired a 10 per cent stake in UEL subsidiary, WBL Corporation.

Earnings per share rose to 1.03 cents for the quar-ter compared with 0.04 cent a year earlier. Net asset value declined to $1.622 from $1.631 as at Dec 31.

Marissa Lee

Finance firm Hong Leong Finance has posted a net profit of $20.9 mil-lion for the second quarter, up 89.1 per cent from the same period a year earlier.

Net interest income and hiring charges in the three months to June 30 came in at $42.6 million, up 25.3 per cent from the same period last year.

A combination of lower deposits base and lower applicable interest rates resulted in interest expense falling 30.2 per cent from a year ago to $31 million in the second quarter, which made up for the 6.1 per cent drop in total interest income and hiring charges to $73.7 million.

Fee and commission income rose 30.8 per cent to $4 million from both lending and non-lend-ing products.

Staff costs dropped by 6.4 per

cent to $14.8 million owing to lower provision for bonus.

Earnings per share was 18.78 cents, up from 9.95 cents in the sec-ond quarter last year, while net asset value per share was $3.85 as at June 30, from $3.82 as at Dec 31 last year.

An interim dividend of four cents per share will be paid on Sept 12, up on the three-cent interim dividend paid last year.

Net loan assets, including hire purchase receivables (net of al-

lowances), stood at $9.56 billion as at June 30, up 0.4 per cent from $9.52 billion as at Dec 31 last year, but a fall of 4.8 per cent from $10 billion as at June 30 last year.

The group said that “uncertain-ties and volatility which prevailed in 2016 continued into the first half of 2017”, and against this backdrop the Singapore economy is ex-pected to “grow slowly”.

The pace of change in the finan-cial industry has quickened, it added.

“Profit margins are squeezed in nearly all industries including ours, and fintechs can help through inno-vation to improve processes and re-duce operating costs,” the group said, adding that it is seeking ways to collaborate with financial tech-nology companies to improve and simplify processes while meeting demands for a technologi-cally-driven customer experience.

marilee@sph.com.sg

Manulife US Reit’s DPU 7.5% above projection

Perennial’s Q2 profit jumps on fair value gain

Hong Leong Finance’s Q2 earnings surge 89%

F&N’s profit gets boost from higher Viet stake

| WEDNESDAY, AUGUST 9, 2017 | THE STRAITS TIMES | BUSINESS C3