Haw Par Q3 net profit soars 21.3% to $42.4m

Improved property segment occupancy boosted its earnings.

Commercial and Industrial group Haw Par Corporation reported health earnings for the past quarter ending in September, up 21.3% to $42.4m compared to $37.3m last year.

According to the group's announcement, its revenue for 3Q16 increased 3% from $48.1m to $49.7m due to higher sales in Healthcare and improvement in occupancy in Property.

"Earnings for the quarter increased 21.3% to $42.4m due to higher gross margins and absence of one-off loss on disposal of available-for-sale financial assets in prior year period," Haw Par noted.

Revenue from healthcare business was 7.1% higher at $44.7m. Operating profit of $16.7m increased 27.5% due to better margins.

Meanwhile, leisure’s revenue of $0.7m decreased 76.5% due to closure of Underwater World Singapore (“UWS”) in June 2016. The segment incurred a loss of $28,000 due to residual costs at UWS, partially offset by profits at Underwater World Pattaya (“UWP”).

On the other hand, property revenues increased 32.0% to $4.3m and profit increased 31.9% to $3.4m from improved occupancy. This came as other income increased 15.7% to $26.2m due mainly to loss on disposal of available-for-sale financial assets included in 3Q15.

The group also noted that its general and administrative expenses increased 12.8% to $2.3m mainly due to lower unrealised favourable foreign exchange differences in 3Q16 compared to 3Q15.

Looking forward, the group expects its investment to be affected by volatile equity markets amidst economic uncertainties.

"Demand for Healthcare's products remains relatively healthy, although subdued economic conditions in key markets could have a dampening effect. Despite the weak demand in commercial office space, Property is expected to provide a stable income stream based on current committed tenancies," Haw Par stated.