Frasers Property’s $510m Value Loss Drives it into Red

Value losses of $510.44 million on Frasers Property assets in the UK, Australia and the European Union have driven it into the red.

In its report for the full 2023 financial year to the end of September, the Singaporean multinational real estate and property management company said it had posted a $85.50 million loss for the year.

The loss was mainly attributed to non-cash, unrealised net fair value losses of $SG441.8 million ($A510.44 million) on the group’s properties in the UK, Australia and the European Union.

The fair value losses were mainly due to higher capitalisation rates amid a higher interest rate environment.

The net unrealised loss is the difference between the carrying amounts and fair values at a given date. 

Its earnings for the corresponding period the year before were $857.05 million on fair value gains of $1042.48 million.

For the financial year 2023, Frasers Property’s earnings fell by 85.9 per cent year-on-year to $142.34 million, also due to fair value losses of $515.52 million for the year, compared to the $1.25 billion in fair value gains the year before.

According to its report, Frasers’ revenue rose by 1.8 per cent year-on-year to $4.56 billion due mainly to improvements from the hospitality segment and higher PBIT contributions from residential projects in Singapore and China.

They were partly offset by lower contributions from residential projects in Thailand and Vietnam. The group’s higher revenue was also due to the contributions from the acquisition of a stake in Nex, a regional shopping mall in Singapore.

For the financial year 2023, gross profit increased by 2.5 per cent year-on-year to $1.78 billion while PBIT rose by 5.1 per cent year-on-year to $1.51 billion.

Exceptional items stood at a loss of $42.98 million, down from exceptional gains of $155.28 million.

As at September 30, cash and cash equivalents stood at $3.07 billion, 20 per cent lower year-on-year. Total assets stood at $45.98 billion, 1 per cent lower year-on-year.

Group chief executive Panote Sirivadhanabhakdi said that “while our financial performance may be affected by external forces in certain years including the high interest rate environment, inflationary pressures, and ongoing global geopolitical and economic uncertainties, we continue to work on enhancing the resilience of our portfolio to deliver sustainable value to stakeholders over the long-term”.

“After a decade of reshaping our portfolio and building competitive business platforms, we have leading business platforms such as industrial and logistics, Singapore suburban retail, and a strong South-East Asia presence.

“We are entering the next phase of our journey on a strong footing, as we maintain our focus on improving the quality and visibility of earnings.”