Tian An Australia’s $20M Debt Gain Masks Risks in Rising Construction Costs
Tian An Australia Limited reported a remarkable turnaround in FY2025, posting a statutory profit of $23.4 million on $84 million revenue, driven by the completion of The Henley, Enfield project and a significant gain from debt restructuring.
- Revenue jumps to $84 million from nil in prior year
- Statutory profit rises to $23.4 million, underlying profit $10.6 million
- Completion and settlement of The Henley, Enfield project
- Gain of $20.4 million from interest-free related party loan modification
- No dividends declared; strong net assets of $93.8 million
Strong Financial Turnaround
Tian An Australia Limited (ASX: TIA) has delivered a striking financial performance for the year ended 31 December 2025, reporting revenue of $84 million and a statutory profit of $23.4 million, a significant improvement from the prior year’s modest $0.7 million profit on no revenue. This turnaround was underpinned by the completion and settlement of its flagship residential development, The Henley, Enfield.
The company’s underlying profit, which excludes non-recurring and non-cash items, also swung to a positive $10.6 million from a loss of $4.6 million in 2024, signalling a return to operational profitability.
Key Drivers: Project Completion and Debt Restructuring
The Henley, Enfield project was a major contributor, with $84 million in net sales recognised during the year, generating a gross profit of $11 million. The project reached practical completion in May 2025, with over 80% of townhouses settled or exchanged by year-end.
Another significant factor was the accounting treatment of a related party interest-free loan from Oasis Star Limited, Tian An Australia’s largest shareholder. The loan modification resulted in an initial gain on debt modification of $20.4 million, partially offset by an effective interest expense of $8.9 million, netting an $11.5 million positive impact on profit. This loan facility was increased to $230 million and extended to December 2027, providing financial flexibility.
Balance Sheet and Capital Position
TIA’s net assets rose to $93.8 million from $68 million the previous year, reflecting the improved profitability and asset revaluations. The company’s net tangible assets per share increased to 104 cents, up from 79 cents, indicating enhanced shareholder value.
The balance sheet gearing ratio improved markedly to 3% from 16%, aided by the interest-free nature of the Oasis Star loan and repayments of other borrowings, underscoring a stronger capital structure.
Ongoing Projects and Strategic Outlook
Looking ahead, Tian An Australia is progressing several residential developments along Australia’s east coast, focusing on metropolitan and inner-city locations. Construction is underway at Auburn Square Stage 2 and Hammond Greens, Chatswood, with approvals sought for further developments at Hammond Place, Chatswood, and Point Grey in Western Australia.
The company aims to sell remaining stock from completed stages at Auburn Square, The Henley, and Lot 370 in Dawesville. Supported by its ultimate parent, Tian An China Investments Company Limited, TIA maintains a solid capital position to fund ongoing projects and pursue new opportunities.
Governance and Remuneration
The board, led by Chairman Peter Curry, continues to oversee a disciplined governance framework. No dividends were declared for FY2025, consistent with prior years, as the company prioritises reinvestment into development projects. Executive remuneration remains aligned with shareholder interests, with no bonuses paid during the year.
The financial statements were audited by BDO Audit Pty Ltd, who issued an unqualified opinion, confirming the integrity of the reported results.
Bottom Line?
With a robust profit turnaround and key projects underway, Tian An Australia is poised to capitalise on Australia’s recovering residential property market, though economic uncertainties remain.
Questions in the middle?
- How will Tian An Australia manage potential inflation and construction cost pressures on upcoming projects?
- What is the timeline and sales outlook for Auburn Square Stage 2 and Hammond Greens developments?
- Will the company consider initiating dividends as profitability stabilises?
