FCL FY 15/16 Full Year Result Quick Summary

Frasers Centrepoint Limited posted their FY 15/16 Full Year earning report in summary below.

• Revenue of $3,439.6 million, 3.4% lower than previous year
• PBIT of $938.2 million, 15.1% lower than previous year
• Profit before tax of $960.3 million, 19.7% lower than previous year
• Attributable Profit of $597.2 million, 22.6% lower than previous year
• Profit for the year of $766.1 million, 24.3% lower than previous year

The drop in revenue was mainly attributable to lower contributions from the group's development portfolio in Singapore, Australia and China. These declines were partially mitigated by the recognition of profits from North Park Residences and the completion of Twin Fountains (EC) project. Beside profit recognition from the property development, FCL also achieved healthy earnings from recurring income sources, which provided a strong and stable income base.

Property Development Key Highlights

FCL’s 80:20 joint venture with Keong Hong launched its 628 units Parc Life EC project in April 2016 at Sembawang with only 119 units sold as at 30 Sep 2016. FCL is working towards the launch of a 19,310 sqm private condominium land parcel along Siglap Road in 2017. It is a 40:40:20 joint venture with Sekisui House and Keong Hong that can potentially yield around 800 to 900 apartment  units.

Commercial Property Key Highlights

Profit contribution from Waterway Point mall commenced operations in January 2016, had 21 million shoppers visited the mall as at 30 Sep 2016. The Asset Enhancement Initiatives (AEI) at the Centrepoint had completed in September 2016. Tenants had progressively opened for business. Construction of Northpoint City is on track for completion in 2017. With the recent acquisition of Yishun 10 by Frasers Centrepoint Trust, FCL is gaining their strong foothold in Yishun on both residential and commercial property development.

REIT Key Highlights

FCL listed the Frasers Logistics and Industrial Trust (FLT) on 21 June 2016 and got off to an upbeat start with more than 6 times of over subscription by institutional investors. It was the largest pure-play Australian Industrial REIT listed in Singapore with a portfolio of 53 Industrial and Logistic properties for about S$1.6 billion in asset and had Net Property Income (NPI) of A$35.7 million as at 30 Sep 2016. 

The economy is expected to be slow moving forward. FCL Group strategy is to achieve sustainable growth and deliver long-term shareholder value through significant development project pipelines, investment properties and fee income. They will grow the asset portfolio in a balanced manner across geographies and property segments. They will also optimise capital productivity through REIT platforms and active asset management initiatives. On 10 Oct 2016, FCL announced a $520 million investment, about 40% stake in a Thailand Industrial Developer called TICON. They are the leading logistics and industrial platform in Thailand. With this investment, FCL is extending their exposure in Thailand to be their 4th biggest market after Singapore, Australia and China.
   
The full year result was indeed very disappointing but we had to bear in mind that the economy is expected to be slow moving forward. They had declared a final dividend of 6.2 cents per share which had been the same for the past 2 years which I feel we should be contented with after the disappointing result. If they are able to continue giving me good returns of 5% or more for income, I will be more than happy to keep investing on them. Not forgetting about the growth of this company, it is now trading at approximately 34% discount to its NAV of $2.30 per share. If you are looking for stable dividend income with potential growth, this company should be able to fit your bill.

Today happened to be also the US Presidential Election result and majority of the world was shocked to see Mr Donald Trump win the presidential. Market had reacted badly and we are expecting to see more selling in the stock market at least in the next few weeks.