Roxy-Pacific Holdings’ (ROXY) 2Q17 PATMI declined 26% YoY to S$14.7m mostly due to lower contributions from the group’s property development segment, partially offset by firmer income from property investment segment (mostly higher rentals from 59 Goulburn Street). In terms of the topline, 2Q17 total revenues similarly declined 21% YoY to S$77.8m as property development revenues fell 24% YoY.

Despite a challenging operating environment, Roxy reports that its recent launches – Straits Mansions in Singapore, The Hensley and Octavia in Australia – have performed well and are 100%, 93% and 95% sold, respectively.

The management team had also prudently replenished land-bank during the housing downturn in Singapore, acquiring 120 Grange Rd and 211-233A Pasir Panjang Rd which will be launched ahead.

Overall we deem this set of results to be broadly within expectations. An interim dividend of 0.214 S-cents per share has been declared.

Maintain HOLD with an unchanged fair value estimate of S$0.52 per share.

Source: OCBC Research - 1 Aug 2017