The dip in revenue was offset by higher revenue generated from the sales of commercial shophouses in Indonesia and broader recurring income base from investment properties.
Sinarmas’ recurring income increased 3.2% to $161.7 million in FY18 with higher rental contribution from the UK division following the acquisition of 33 Horseferry Road in June 2017 and leasing income from the recently acquired investment properties in Central Jakarta in Indonesia.
In tandem with the decrease in revenue, gross profit in 4Q18 and FY18 slid 57.0% and 39.3% respectively to $176.7 million and $598.1 million. Gross profit margin for the full year dipped 3.9 percentage points to 69.2% from 73.1% as sales of land parcels fetched better profit margins and higher costs were incurred from sales of commercial shop houses and apartments.
The group also recorded a net foreign exchange gain of $5.7 million in FY18 due to the unrealised translation gain on inter-company loans in certain subsidiaries following the weakening of SGD against US Dollar. Share of losses in joint ventures narrowed to $3.7 million from $45.2 million in FY17 which had included a reversal of unrealised gain adjustment of $59.4 million from the group’s portion of the gain on sales of land parcel to a joint venture in FY17. Despite the absence of last year’s unrealised gain reversal, lower sales of residential units in certain joint ventures contributed to the continued losses.
As at Dec 31, the group’s balance sheet remains resilient with total assets increasing marginally to $6.6 billion. The group remains in a strong liquidity position with cash and cash equivalents of $984.1 million and net debt to equity ratio of 22.9% at the end of FY2018.
Sinarmas is proposing a first and final dividend of 0.2 cents per share.
Margaretha Widjaja, Sinarmas’ Executive Director and Vice-Chairman of SML Indonesia Division, says, “Despite the economy pulling ahead against external turbulences, the real estate sector continues to face headwinds from the depreciating Indonesian Rupiah, increasing interest rate environment, dampening household consumption, as well as the upcoming 2019 general election where consumers usually put off big ticket purchases and adopt a wait-and-see strategy.”
Shares in Sinarmas closed 1.5 cents higher at 27 cents.
