ARA Asset Management’s 4Q earnings falls 28% to S$18.5 mil

SINGAPORE (Feb 10): REIT management company ARA Asset Management posted 28% lower earnings of S$18.5 million (RM57.83 million)in 4Q, from S$25.6 million a year ago.

Excluding certain one-off items, ARA Asset’s adjusted net profit in 4Q improved by 4% at S$21.0 million, compared with S$20.1 million a year ago.

This brings full year ARA Asset’s earnings to S$88.7 million in FY2016, an increase of 14% from earnings of S$78.1 million a year ago.

Adjusted net profit for FY2016 was S$92.1 million, 13% higher than the S$81.4 million recorded in FY2015.

Revenue in the quarter dipped by 1% to S$45.5 million, as a 10% increase in management fees to S$37.9 million was offset by lower acquisition, divestment and performance fees, as well as finance income.

For FY2016, ARA Asset saw revenue increase 13% to S$176.8 million, from S$156.0 million a year ago.

Total expenses in 4Q surged 45% to S$23.9 million, from S$16.5 million a year ago.

This was mainly attributed to higher finance costs primarily due to a net loss of S$4.7 million on fair valuation / disposal of financial assets during the quarter, compared to a net gain of S$2.7 million recorded in 2Q2015.

Administrative expenses also increased 13% to S$13.1 million during the quarter, while other expenses in 4Q rose to S$4.3 million, from S$2.7 million a year ago, mainly due to higher professional fees.

The group’s share of profit of associates and joint ventures, net of tax, rose 25% to S$1.4 million in 4Q, mainly due to higher income contribution from Cache Property Management.

ARA Asset’s total assets under management stood at about S$35.6 billion as at Dec 31, 2016.

As at Dec 31, 2016, cash and cash equivalents stood at S$109.1 million.

In Nov 2016, ARA Asset had announced a joint proposal by a consortium led by group founder and chief executive officer John Lim to privatise the company in a takeover offer at S$1.78 per scheme share.

“The proposed privatisation will not only deliver immediate value to shareholders, but also provides ARA with an increased access to a deeper and more efficient capital to further scale its growth over the long term,” Lim says.

ARA Asset Management closed flat at S$1.71 on Thursday. —

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