First Sponsor Group Limited: FY2025 Profit Guidance Review
First Sponsor Group Limited has released a profit guidance notice for the six months and full financial year ended 31 December 2025 (2H2025 and FY2025). This article summarizes key financial highlights, exceptional items, and management commentary, providing investors with a concise, professional assessment of the company’s recent performance and outlook.
Key Financial Highlights
- Expected Net Loss: The Group anticipates reporting a net loss for both 2H2025 and FY2025.
- Main Causes: Losses are primarily due to fair value losses on financial derivatives and net foreign exchange losses, following the strengthening of the Euro (EUR), Chinese yuan (CNH), and Australian dollar (AUD) against the Singapore dollar (SGD).
- Hedging Impact: The Group’s hedging strategy resulted in an unrealised mark-to-market loss of S\$58.6 million for 2H2025 and S\$56.1 million for FY2025, plus net FX losses of S\$21.4 million (2H2025) and S\$20.0 million (FY2025).
- Impairments: Additional provisions for impairment losses and fair value reductions on PRC properties, along with losses from associates and joint ventures in China, further impacted results.
- Net Gearing: As at 31 December 2025, the Group’s net gearing ratio stood at approximately 0.56x.
- Liquidity: The Group holds total cash and undrawn committed facilities exceeding S\$500 million, providing strong liquidity.
Financial Comparison Table
Due to the nature of the profit guidance, specific revenue, EPS, or dividend numbers for prior periods are not disclosed in the report. However, key loss figures and net gearing are summarized below:
| Metric |
2H2025 |
FY2025 |
| Net Loss (expected) |
Loss (amount not specified) |
Loss (amount not specified) |
| Unrealised Mark-to-Market Loss (Derivatives) |
S\$58.6m |
S\$56.1m |
| Net FX Loss (Derivatives matured) |
S\$21.4m |
S\$20.0m |
| Net Gearing Ratio |
0.56x (as at 31 Dec 2025) |
| Cash & Undrawn Facilities |
>S\$500m (as at 31 Dec 2025) |
Exceptional Items and Notable Events
- Foreign Exchange Impact: The Group’s hedging strategy, while protecting shareholders’ funds from translation risk, resulted in significant accounting losses on derivatives due to currency appreciation.
- Impairment Losses: The challenging PRC real estate market led to impairment provisions and fair value losses on development and investment properties, as well as losses from certain associates and joint ventures.
- Change in Funding Structure: Since September 2024, subsidiaries have been funded entirely by equity (previously by debt), eliminating some natural hedging effects and increasing reported FX volatility.
- Operating Cash Flow: Recurring net operating income from the property portfolio continues to cover all interest obligations.
- Upcoming Completions: The redevelopment of Puccini Hotel Milan, Prins Hendrikkade Amsterdam, and Dreeftoren Amsterdam is expected to bolster recurring income in 2026.
Chairman’s Statement and Management Tone
No direct Chairman’s Statement is included in the report. However, the statement by Group Chief Executive Officer Neo Teck Pheng emphasizes that, “the Group’s overall business and financial position remains strong” and highlights robust liquidity, manageable gearing, and the expectation of improved recurring income from future project completions. The tone is cautiously reassuring, acknowledging losses but focusing on the Group’s resilient balance sheet and operational strength.
Forecasts and Outlook
- The Group expects improved recurring income from completed redevelopments in 2026.
- Despite accounting losses, underlying shareholders’ funds remain largely intact due to the Group’s hedging approach.
- No material concerns over liquidity or solvency, with ample cash and undrawn facilities.
- Further details will be available following the release of unaudited results on or around 25 February 2026.
Conclusion and Investment Recommendations
Summary: First Sponsor Group Limited faces a challenging FY2025 due to significant foreign exchange and derivative losses, plus impairments on PRC real estate assets. However, the Group retains strong liquidity, manageable leverage, and stable recurring income from its property portfolio. The outlook is neutral to slightly weak in the short term, but the medium-term pipeline and robust balance sheet provide a degree of resilience.
For Current Shareholders
Given the Group’s strong liquidity and underlying asset base, long-term investors may consider holding their positions, especially in anticipation of improved recurring income from project completions in 2026. However, be prepared for continued earnings volatility tied to FX movements and PRC real estate exposure.
For Potential Investors
Investors not currently holding shares may wish to adopt a wait-and-see approach until the unaudited financials are released and clearer evidence emerges of recovery in operational performance and stabilization of FX impacts. The company’s solid liquidity and gearing are positives, but near-term earnings risk remains elevated.
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a financial advisor before making any investment decisions.
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