First Sponsor Group ADN -2.44% has, through its indirect wholly-owned subsidiary, FS NL Holdings, acquired a 33% stake in the capital of Rotali B.V. The group was making the purchase along with Cobb Netherlands B.V., Maleny Netherlands, Robinvale Netherlands. All three companies are limited liability companies that were incorporated in the Netherlands.

 

The group has also acquired Rotali&rsquo s outstanding shareholder loans.

 

Rotali holds the legal and beneficial title to the Allianz Tower, an office building located at Coolsingel 120 in Rotterdam. It is a Grade A office space with a national credit rating of AAA and is located in the heart of Rotterdam&rsquo s central business district (CBD). The building is also located next to the Beurs metro station, just two stops away from the Rotterdam Central Station.

 

The building, which has a leasehold tenure of 99 years ending on Dec 22, 2087, has a three-storey basement, ground floor, 21 upper floors and 207 indoor parking spaces. Its total lettable floor area measures 19,607 sqm. The ground rent has been paid in advance for the entire duration of the lease.

 

As at Sept 18, the property is fully leased to Allianz Nederland Groep. The lease will expire on Dec 31, 2035 and is renewable for consecutive periods of five years each.

 

However, the tenant has a one-off right to terminate the lease agreement on Dec 31, 2030, with a one year notice period and subject to a payment equivalent to 22.5 times of the initial monthly rent.

 

The share purchasers, on Sept 15, paid EUR15.6 million, which is the agreed preliminary share purchase price. The amount was arrived at based on estimates of the cash and debt of the target as at the date of completion.

 

The group&rsquo s pro rata portion was EUR5.2 million or $7.6 million.

 

Based on Rotali&rsquo s audited financial statements for the financial year ended Dec 31, 2022, the book value of, and net tangible asset value attributable to First Sponsor&rsquo s pro rata portion of the target shares was approximately EUR11.4 million. As the target shares are not publicly listed and traded, the group is not able to determine their available open market value.

 

The total cash consideration is equal to the property&rsquo s agreed commercial value of EUR62.0 million including other factors including cash and excluding debt and fees.

 

The group, which also acquired Rotali&rsquo s outstanding shareholder loans, paid EUR46.0 million &ndash or $67.2 million &ndash in cash for them.

 

According to First Sponsor, the acquisition was a good opportunity for the group to acquire a Grade A office building in Rotterdam&rsquo s CBD. The move will help expand the recurrent income base for its property holding and property financing business segments.

 

The acquisition was funded by existing cash resources and committed credit facilities.

 

First Sponsor Group ADN 3.88% , which is 35.72% held by City Developments, and 45.63% owned by Tai Tak Estates, reported earnings of $59.9 million for the 2HFY2022 ended Dec 31, 2022, 14.1% higher than the earnings of $52.5 million in the corresponding period the year before.

 

For the FY2022, the group&rsquo s earnings increased by 8.1% y-o-y to $131.3 million.

 

The higher earnings are attributable to the share of after-tax profit of associates and joint ventures (JVs), which surged by 59.6 times to $19.4 million in the 2HFY2022, up from $325,000 in the 2HFY2021.

 

The contribution by the group&rsquo s associates and JVs in China improved from a loss of $2.8 million in 2HFY2021 to a profit of $39.7 million in 2HFY2022. In particular, the 27%-held Skyline Garden project in Dongguan contributed a share of profit of $39.6 million to the group in the 2HFY2022, mainly boosted by its handover of the four fully sold residential blocks in December 2022.

 

The reversal to profitability was offset by the contribution from its European associates and joint ventures, which fell to a loss of $20.1 million in 2HFY2022 from a profit of $3.1 million in the same period the year before as the performance was significantly affected by the impairment of the various investment properties held which led to a share of loss of $19.0 million in total.

 

&ldquo Property development remains the key business segment of the group. The group, on its own and with joint venture partners, made a record purchase of four development land plots (all of which are in Dongguan) in FY2022,&rdquo says Neo Teck Pheng, group CEO of First Sponsor Group.

 

&ldquo The group&rsquo s share of the land purchase consideration is approximately $656 million. As a result, the group will see a record number of development projects under pre-sale in FY2023,&rdquo he adds.

 

During the 2HFY2022, the group&rsquo s revenue fell by 27.8% y-o-y to $312.2 million mainly due to the lower revenue from sale of properties, property financing and rental of investment properties and partly offset by the increase in revenue from hotel operations.

 

Revenue from sale of properties in the 2HFY2022 fell by 44.7% y-o-y to $184.8 million due mainly to a lower number of residential units in The Pinnacle project handed over in 2HFY2022 compared to 2HFY2021. The decrease was partially offset by the first time handover of 111 car park lots from The Pinnacle project in the 2HFY2022.

 

Rental income from investment properties fell by 6.8% y-o-y to $6.7 million mainly due to the depreciation of the Euro against the Singapore dollar (SGD) during the period. This is partly offset by the contribution from the retail mall in Shanghai that was acquired by the group via an auction in April 2022.

 

Revenue from hotel operations increased by 224.6% y-o-y to $86.7 million due to the consolidation of revenue from the eleven Bilderberg hotels in the Netherlands after the group&rsquo s acquisition of a 95% stake in Queens Bilderberg (Nederland) B.V. from its 33%-held associate, FSMC, in May 2022.

 

The other hotels in Europe also recorded an increase in their aggregate revenue of $14.4 million, up 81.4% y-o-y due to the recovery in the hospitality sector arising from the removal of Covid-19 restrictions.

 

Revenue from property financing fell by 47.2% y-o-y to $34.1 million mainly due to the lower average Chinese property financing loan book for 2HFY2022 of $223.1 million compared to $560.7 million in 2HFY2021. The decrease was also attributed to the absence of a one-off $5.2 million (RMB25 million) fee earned in 2HFY2021 for the early redemption of the three-year convertible bond secured on a hotel in Dongguan.

 

Gross profit for the 2HFY2022 fell by 17.8% y-o-y to $139.9 million mainly due to the lower gross profit from the sale of properties and property financing.

 

In the 2HFY2022, the group obtained a higher overall gross margin of 44.8% compared to 2HFY2021&rsquo s 39.3%.

 

During the same period, the group recorded other losses of $0.1 million which is related to the write off of goodwill arising from the group&rsquo s acquisition of an indirect 70%-owned subsidiary, CDFQ. This is down from the other gains of $5.7 million recorded in 2HFY2021.

 

FY2022 revenue fell by 27.4% y-o-y to $427.5 million due to lower revenue from sale of properties, property financing and rental of investment properties.

 

Gross profit fell by 14.6% y-o-y to $206.1 million. The group achieved a higher overall gross margin of 48.2% in FY2022, up from FY2021&rsquo s 41.0%.

 

Earnings per share (EPS) for the 2HFY2022 and FY2022 stood at 4.52 cents and 9.90 cents respectively.

 

A final cash dividend of 2.70 cents per share has been declared for the period, up from 2.35 cents per share declared in the same period the year before.

 

If approved, the total dividend declared for the FY2022 will come up to 3.80 cents per share, making this a record dividend payout for the group.

 

The final dividend is expected to be paid out on May 19.

 

As at Dec 31, 2022, cash and cash equivalents stood at $270.3 million.

 

&ldquo Backed by a strong balance sheet, substantial potential equity infusion from the exercise of outstanding warrants and unutilised committed credit facilities, the group is ready to capitalise on any good business opportunities when they arise,&rdquo says Neo.

 

Between Aug 4 and 5, First Sponsor Group : ADN +3.03% non-executive chairman Calvin Ho Han Leong acquired 300,000 shares of the company at an average price of S$1.29 per share. With a consideration of S$388,211 this increased his total interest in the group from 46.44 per cent to 46.47 per cent. It followed on from the acquisition of 599,000 shares of the company at an average price of S$1.37 per share between Mar 17 and 18 and 63,900 shares at S$1.34 per share on Feb 24. Ho was appointed non-executive chairman of the company in April 2015. Prior to this, he had served as the non-executive vice-chairman of the company since Oct 1, 2007. He has also accumulated extensive experience during his tenure as CEO of Singapore-incorporated Tai Tak Estates.

 

Between Aug 3 and 4, First Sponsor Group : ADN +2.36% alternate director to the non-executive chairman, Ho Han Khoon, acquired 200,000 shares of the listed company for a consideration of S$250,800. At S$1.25 per share, this increased his total interest in the company from 31.43 per cent to 31.45 per cent.

 

On Jul 29, First Sponsor Group reported a H1 2022 net profit of S$71.3 million, representing 3.5 per cent growth from H1 2021, with the group also gaining 2 new residential development projects In Dongguan in July 2022.

 

Ho&rsquo s recent acquisitions followed similar acquisitions following the H1 2021 results, when he acquired 195,000 shares at S$1.40 per share.

 

Ho was appointed an alternate director to Calvin Ho Han Leong on May 19, 2014. He is currently holding the position of executive vice-president of Tai Tak, where he is responsible for overseeing Tai Tak group' s overall business and financial strategy, investments and operations.

 

First Sponsor Group, which is 35.72% held by City Developments, and 45.63% owned by Tai Tak Estates, reported earnings of $71.3 million for the 1HFY2022 ended June.

 

The half-year period&rsquo s earnings represented an increase of 3.5% over the earnings of $69.0 million in the same period the year before.

 

1HFY2022 earnings per share (EPS) stood at 5.38 cents on a fully diluted basis.

 

During the period, the group&rsquo s revenue fell 26.5% y-o-y to $115.3 million due to the decrease in revenues from the sale of properties and property financing.

 

In the 1HFY2022, revenue from the sale of properties plunged 74.0% y-o-y to $21.1 million, while revenue from property financing fell 28.1% y-o-y to $39.2 million.

 

The lower revenue from the sale of properties was mainly due to the first-time profit recognition of the Soho loft units in Plot F of the Millennium Waterfront project in 1HFY2021.

 

Revenue recognition in 1HFY2022 was from the sale of 40 Plot F Soho loft units and 10 commercial units of the Millennium Waterfront project compared to the 619 Plot F SOHO loft units, one commercial unit and seven car park lots recognised in 1HFY2021.

 

The lower revenue was offset by rental income from investment properties and revenue from hotel operations, which rose 7.6% y-o-y and 217.5% y-o-y to $6.3 million and $48.6 million respectively.

 

The higher rental income from investment properties was mainly due to the contribution from the East Sun Entities which were consolidated by the group with effect from March 31, 2021.

 

The higher revenue from hotel operations came from the 11 Bilderberg hotels in the Netherlands, which was consolidated by the group with effect from May 2. The rest of the European hotels saw revenue surge 281% y-o-y, underpinned by the strong demand arising from the removal of the Covid-19 restrictions.

 

Finally, revenue from property financing fell mainly due to the lower average PRC PF loan book for 1HFY2022 of RMB2.14 billion ($451.3 million).

 

In the 1HFY2022, gross profit fell by 7.0% y-o-y to $66.2 million on the back of the lower revenue.

 

As at June 30, cash and cash equivalents stood at $651.9 million.

 

During the period, the group declared an interim dividend of 1.1 cents, payable on Sept 1.

 

Between Mar 17 and 18, First Sponsor Group First Sponsor : ADN 0% non-executive chairman Calvin Ho Han Leong acquired 599,000 shares of the company at an average price of S$1.37 per share. With a consideration of S$819,338 this increased his total interest in the group from 46.37 per cent to 46.44 per cent. This followed on from the acquisition of 63,900 shares at an average price of S$1.34 per share on Feb 24.

 

Ho was appointed the non-executive chairman of the company in April 2015. Prior to this, he had served as the non-executive vice-chairman of the company since Oct 1, 2007. He has also accumulated extensive experience during his tenure as CEO of Singapore-incorporated Tai Tak Estates.

 

Back on Feb 11, First Sponsor Group CEO Neo Teck Pheng highlighted that FY21 (ended Dec 31) saw the group set a new record annual pre-tax profit, since its inception, of S$202.6 million and a net profit of S$121.5 million for FY21, representing 17.7 per cent growth from FY20.

 

This was underpinned largely by the profit contribution from The Pinnacle project and a record annual average China property financing loan book. Mr Neo also added that the group is backed by a strong balance sheet, substantial unutilised committed credit facilities and potential equity infusion from the exercise of outstanding warrants.

PROPERTY developer First Sponsor Group reported S$121 million in net profit for the full year ended Dec 31, 2021, up 17.7 per cent from S$103 million in the year-ago period, the company said in a bourse filing after market hours on Friday (Feb 11).

 

The company, which is engaged primarily in business in China, announced a second interim cash dividend of 2.35 Singapore cents for FY2021, in lieu of a final dividend. This brings the total dividend declared for the year to 3.45 Singapore cents.

 

Revenue for the year was up 189 per cent to S$589 million, led by strong growth from sale of properties.

 

Revenue from this particular segment increased by 628 per cent or S$358 million to S$415 million, due mainly to the first handover of 6 residential apartment blocks of The Pinnacle in Dongguan, as well as the handover of loft units in the Millennium Waterfront project in Chengdu.

 

Revenue from hotel operations climbed 27.8 per cent to S$42 million, mainly due to a pick-up in performance of hotels in China and Europe as Covid-19-related travel restrictions eased. Rental income from investment properties went up 47.1 per cent to S$13 million. Revenue from property financing was up 13.1 per cent to S$119 million.

 

Administrative expenses went up 25.8 per cent to S$36.1 million mainly due to higher staff costs, while selling expenses were up 74.2 per cent to S$10.2 million.

 

The group achieved a lower overall gross profit margin of 41 per cent in FY2021, compared to 84.3 per cent in FY2020. It attributed this to a change in sales mix, with the lower-yielding property development business contributing a larger share of total revenue in the current year.

 

Earnings per share for the full year stood at 13.26 Singapore cents, compared with 11.97 Singapore cents in FY2020.

 

Group chief executive officer Neo Teck Pheng said First Sponsor' s property development business segment will remain active in the coming year, with the group expecting to launch new pre-sales for 5 projects in China.

 

The property financing business in China achieved a record full-year average loan book of 2.7 billion yuan (S$571 million) for FY2021. With an improving credit liquidity situation in the country, however, the challenge for the group would be to maintain a similar average loan balance in FY2022, Neo said.

 

In the Netherlands, the group has entered into agreements with main contractors for the Dreeftoren Amsterdam redevelopment project, for which construction is expected to begin in the first quarter of 2022.

 

The group remains optimistic about the recovery of Europe' s hospitality business in the mid to long term, Neo said. He added that it is discussing with business partners to increase its current 31.4 per cent equity interest in the Dutch QBN hotel portfolio.