LHN Limited records 117.4% y-o-y surge in 1HFY2022 earnings of $32.2 mil on fair value gains

SINGAPORE (EDGEPROP) - Real estate management services group LHN Limited has reported earnings of $32.2 million, 117.4% higher y-o-y for the 1HFY2022 ended March.

See also: Hong Lai Huat back in black for FY2021 with $3.2 mil profit

Basic earnings per share (EPS) for the period stood 113.9% higher y-o-y at 7.87 cents.

During the period, revenue fell 8.2% y-o-y to $59.2 million, due to the y-o-y declines in its commercial business and facilities management business.

The lack of revenue for its dormitory set up & retrofit and lower revenue for one of the group’s residential properties, 85 SOHO, also contributed to the revenue decline.

Revenue from the group’s largest business segment, space optimisation business, contributed 34.8% of the group’s revenue. The segment saw revenue grow some 6.3% y-o-y due to higher revenue contribution from a newly acquired industrial property at 55 Tuas South Avenue 1; increase in revenue contribution from the group’s residential co-living properties in Singapore at the 1557 Keppel Road mixed used development and 320 Balestier Road, a newly acquired residential property in FY2021; and higher occupancy rates for its residential co-living properties in Singapore.

Gross profit for the 1HFY2022 fell by 11.3% y-o-y to $31.2 million.

Other income increased by 67.38% y-o-y to $10.0 million mainly due to the increase in gains from subleases of approximately $3.5 million and increase in governments grants of approximately $0.4 million.

Other operating expenses fell 57.9% y-o-y to $0.9 million mainly due to the decrease in impairment losses on receivables of approximately $0.8 million under the space optimisation business and the absence of lease modification loss of approximately $0.7 million recorded in the 1HFY2021.

Share of results of associates and joint ventures surged 10.4 times to $9.4 million in the 1HFY2022 from the $0.9 million in the year before. This was mainly due to a net fair value gain on investment properties of approximately $8.3 million in 1HFY2022 as compared to a net fair value loss on investment properties of approximately $0.2 million in 1HFY2021.

Fair value gain on investment properties was approximately $8.6 million in 1HFY2022 as compared to a fair value loss on investment properties of approximately $2.7 million 1HFY2021.

As at end-March, cash and cash equivalents stood at $37.8 million.

In its outlook statement, the group says it is looking to develop four new Coliwoo properties in the 2HFY2022 ending Sept 30, which will add another 135 keys to its existing portfolio of 925 keys.

The group is also expecting to launch new Coliwoo properties in Singapore. They will comprise a block of serviced residence at 2 Mount Elizabeth Link comprising of 411 keys, a recently acquired freehold serviced residence property at 298 River Valley Road comprising of 13 keys as well as a newly signed master lease arrangement for a row of shophouses along Lavender Street.

The board has declared an interim dividend of 0.6 cents per share for the period.

It has also declared a special dividend of 0.15 cent per share following the successful listing of its spin-off, LHN Logistics.

The total dividend for the period comes up to 0.75 cents, same as the interim dividend of 0.75 cents in the same period the year before.

The dividend will be paid on June 17.

Shares in LHN closed flat at 34.5 cents on May 12.