Pollux Properties Ltd. (1H2025) Financial Results Analysis

Pollux Properties Ltd. released its unaudited condensed interim consolidated financial statements for the six months ended 30 June 2025. The Group, which focuses on property investment, hotel operations, and related activities in Singapore and Indonesia, reported a modest rise in revenue but a significant increase in net loss compared to the prior year. Below is a comprehensive breakdown of the key financial metrics and operational highlights for investors.

Key Financial Metrics and Performance Table

Revenue and Profitability Analysis

• Revenue: Revenue grew modestly by 1.7% YoY to \$6.65 million, mainly due to higher rental rates on renewed leases. However, this was partially offset by the loss of income from previously disposed investment properties.
• Gross Profit: Gross profit also saw a slight YoY increase (+1.3%) despite a rise in cost of sales attributed to the fitting out of additional hotel rooms in Indonesia.
• Net Loss: Net loss widened substantially to \$1.15 million (from \$0.17 million loss in 1H2024), driven by higher other operating losses (notably foreign exchange losses of \$1.46 million due to IDR depreciation), increased marketing expenses, and an income tax under-provision from the prior year.
• EPS: Loss per share increased to (0.042) cents from (0.006) cents in 1H2024, reflecting the expanded net loss base.

Dividends

• No dividend declared for 1H2025, consistent with 1H2024 and the previous half-year. Management cited the need to conserve cash for operating activities and the company’s accumulated loss position.

Balance Sheet and Cash Flow Highlights

• Total Assets: Decreased by 2.0% to \$353.8 million, primarily due to the completion of investment property disposals, depreciation, and share of loss from joint venture.
• Total Liabilities: Fell 3.9% to \$146.7 million, reflecting repayments of loans and lower trade payables, partially offset by higher rental received in advance and increased tax provisions.
• Net Current Liabilities: Current liabilities exceeded current assets by \$18.1 million (widening from \$11.9 million at FY2024). This is largely attributed to non-current classification of hotel assets in Indonesia, which were acquired with internal funds and contributed to the negative working capital position.
• Cash and Equivalents: Increased slightly to \$7.8 million as at 30 June 2025, up from \$7.2 million at year-end 2024, supported by proceeds from property sales and positive operating cash flow.
• Debt: Total loans and borrowings stood at \$134.0 million, secured by investment properties and company guarantees. The Group is restructuring its loans to address near-term obligations.

Segment Performance

• Investment Properties: Remained the main revenue driver, with stable rental income due to strategic locations and successful tenant renewals.
• Hotel Operations (Indonesia): Revenue contribution was modest (\$0.2 million) as renovations are ongoing. Management anticipates higher future revenue as these assets become fully operational.

Exceptional Items and Asset Revaluation

• Exceptional Expenses: Major FX losses (\$1.46 million) due to currency depreciation in Indonesia.
• Asset Revaluation: No new independent valuation was conducted for investment properties as at 30 June 2025. Management assessed that fair values did not materially differ from the last valuation at 31 December 2024.

Directors’ Remuneration

• Total compensation for key management personnel in 1H2025 was \$120,000, significantly lower than \$277,845 in 1H2024. This included only payments to directors, as no other key management personnel received remuneration during the period.

Divestments and Asset Sales

• Proceeds from investment property sales in 1H2025 totaled \$7.5 million, supporting loan repayments and working capital.

Macroeconomic & Industry Environment

• Singapore’s private property market saw modest price and rental increases in 1H2025, but a large supply pipeline and cautious economic outlook (with 2025 GDP growth projected at 0.0–2.0%) may affect future growth.
• Indonesia’s tourism sector is rebounding, with substantial increases in international arrivals, which bodes well for Pollux’s hotel segment as renovations complete and occupancy rises.

Related-Party Transactions and Corporate Actions

• No share buybacks, new placements, or dilution events were reported for 1H2025. No interested person transactions mandated by shareholders.

Risks and Unusual Items

• Continued exposure to foreign exchange volatility in Indonesia.
• Negative working capital position, though management is addressing this through loan restructuring and asset optimization.
• No legal, regulatory, or natural disaster risks were reported for the period.

Chairman’s Statement

No direct Chairman’s Statement was included in the report. The closing statement by the CEO and Chairman confirmed the accuracy of the results and compliance with regulatory undertakings.

Outlook and Forecasted Events

• Stable rental income is expected from Singapore investment properties due to their strategic locations and successful tenant renewals.
• Hotel segment revenue is projected to increase as renovations in Indonesia are completed and properties become fully operational.
• Management is focused on improving liquidity and restructuring short-term obligations.

Conclusion and Investment Recommendations

Overall, Pollux Properties Ltd.’s financial performance in 1H2025 appears weak due to the widened net loss, persistent negative working capital, and ongoing foreign exchange risks from Indonesian operations. However, the Group maintains strong asset backing, a stable property rental base in Singapore, and anticipates improved future hotel revenue as Indonesian assets come online.

• If you currently hold the stock: Consider maintaining a cautious stance. Monitor management’s progress on loan restructuring, the completion and ramp-up of hotel operations, and any further asset sales or cash flow improvements. If your investment horizon is long-term and you are comfortable with near-term risk and lack of dividends, holding may be justified. However, note the lack of near-term earnings visibility and ongoing risks.
• If you do not currently hold the stock: It may be prudent to wait on the sidelines until clearer evidence emerges of a turnaround in profitability and improved liquidity. The lack of dividends and current net losses make this a higher-risk proposition unless you have conviction in management’s ability to deliver on future hotel revenue and successfully manage refinancing risks.

Disclaimer: This analysis is based strictly on the company’s interim financial report as of 30 June 2025. It does not constitute investment advice. Investors should conduct their own due diligence and consider their risk tolerance before making any investment decisions.

View Pollux Prop Historical chart here