Roxy-Pacific Holdings’ 3Q16 PATMI decreased 39% YoY to S$8.1m mainly due to lower profit margins at the property development business which decreased from 18% in 3Q15 to 13% over the latest quarter given the absence of writebacks for over-provisions of development costs in 3Q15, and lower contributions from the group’s hotel segment and investment property segment.

In terms of the topline for the quarter, group revenues increased 4% YoY to S$90.9m mostly because of higher contributions from the property development segment, partially offset by lower hotel income.

We deem this quarter’s results to be broadly within expectations and note that the group currently sits on total presale revenues of S$399.2m which will be progressively recognized from 4Q16. Maintain HOLD with an unchanged fair value estimate of S$0.52 per share.

Source: OCBC Research - 1 Nov 2016

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