Roxy Pacific

Roxy Pacific: (S$0.50) 3Q15 boost from property development offset by associates' slump
Roxy Pacific’s 3Q15 net profit increased 7% to $13.3m, while revenue jumped 31% to $87.6m.

The topline boost was from a 40% surge in property development revenue to $72.8m, from higher recognition from Jade Residences, Whitehaven, LIV on Sophia, LIV on Wilke and Sunnyvale in the property development segment.

In hotel performance ($11.6m, -7%), the Grande Mercure Roxy Hotel’s RevPAR fell 8% to $160, although occupancy improved 0.4ppt to 94.8%. The addition of 59 Goldburn Street since Jul ’14 buoyed rental income in the property investment segment.

Gross profit margin was steady at 26%. In the property development segment, GPM increased 4ppt to 18% due to the write-back from the overprovisioning of development costs in prior periods.

Although other operating income rose surged to $2.8m from a low base, mainly from higher interest income, and forex gains, this was offset by a 56% slump in share of associate’s contributions from the absence of profit recognition from the sale of strata retail floors in 8 Russell Street, Hong Kong.

Net gearing improved to 1.13x at end Sep from 1.7x at end Dec ’14.

As at 21 Oct, Roxy Pacific has a total of $412m of revenue to be progressively recognised from 4Q15 to 2018.
Roxy Pacific is currently trading at 1.35x P/B.