Frasers Property - DBS Research 2023-11-16: Return Of The High-Yielding Developer!

• Dividend surprise of S$0.045 (+50% y-o-y) an insight into Frasers Property management’s comfort level as to financial position. Resilient operational performance for FY23F masked by non-cash valuation adjustment in UK, Europe.

FY23 financial highlights

• - Read this at SGinvestors.io -
• The stronger operational performance was mainly led by improvements in the hospitality business (+c.28% y-o-y in FY23) and residential business and contribution from NEX in Singapore (+2.6% y-o-y), offsetting the declines from Australia (-6.6% y-o-y) and industrial (-23.4% y-o-y) due to divestments.
• - Read this at SGinvestors.io -

Our view

• We remain comfortable with Frasers Property’s financial standing as of Sept 23, with a slight uptick in its net debt/equity ratio to 0.76x (from 0.65x a year ago) and net debt/property asset ratio of 0.4x (vs. 0.375x as of Sep 22), but these have generally held steady through the course of FY23.
• Overall interest costs inched higher to 3.5% y-o-y (vs. 2.7%) while the interest coverage ratio dipped to 3x, which is within the range. Net asset value per share declined by ~5% to S$2.52/share.

A “high yield” developer again?

• Read more at SGinvestors.io.

Rachel TAN DBS Group Research | Derek TAN DBS Research | Tabitha FOO DBS Research | https://www.dbs.com/insightsdirect/ 2023-11-16 SGinvestors.io

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