Fragrance

Fragrance: 4Q14 net profit plunged 40.4% y/y to $79.7m, primarily due to a 47.8% drop in fair value gains from the revaluation of investment properties to $53.5m. Excluding fair value gains, core businesses earnings fell 16.1% to $26.2 in the quarter.

Meanwhile, revenue rose 5.8% to $128.5m, driven by an 8.3% growth in property development revenue to $123.6m from the progressive recognition of Urban Vista, Novena Regency, and Kensington Square. Le Regal, Suites @ East Coast and Icon @ Pasir Panjang also contributed towards top line.

These were partially offset by reduced by a 3.8% reduction in property investments contribution to $4.9m, as the investment property at Alexandra Road had been undergoing AEI works since 3Q14.

Gross margin for property development fell 3.2ppt to 31.7% from lower selling prices.

Bottom line was also slowed by tax expenses which grew three-fold to $6m.

Most of Fragrance’s residential projects in Singapore have been sold. Meanwhile, City Gate, its latest launch, was warmly received due to the strategic location.

The asset enhancement works at Alexandra Road is expected to be completed this year, while the property at Sims Drive is pending the issuance of TOP.

No new updates were provided regarding the proposal to spin-off the Australian property business into a separate listing on Catalist.

Fragrance is trading at 1.6x P/B.