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Full Year Results Financial Statement And Related Announcement

Financials Archive

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UNAUDITED RESULTS FOR THE FOURTH QUARTER AND FINANCIAL YEAR ENDED 31 DECEMBER 2016

 
Group
Fourth Quarter Ended 31 Dec
Financial Year Ended 31 Dec
2016
2015
+ / (-)
2016
2015
+ / (-)
S$'000
S$'000
%
S$'000
S$'000
%
Revenue
15,104
14,012
7.8
58,704
57,280
2.5
Cost of sales
(7,288)
(5,968)
22.1
(27,816)
(28,093)
(1.0)
Gross profit
7,816
8,044
(2.8)
30,888
29,187
5.8
Other income
1,131
1,097
3.1
1,985
2,193
(9.5)
Distribution costs
(190)
50
>100
(961)
(1,015)
(5.3)
Administrative expenses
(2,124)
(3,690)
(42.4)
(13,693)
(14,780)
(7.4)
Other expenses
(1,681)
(3,024)
(44.4)
(2,649)
(4,828)
(45.1)
Finance cost
(1,106)
(1,384)
(20.1)
(4,644)
(5,124)
(9.4)
Profit before income tax
3,846
1,093
>100
10,926
5,633
94.0
Income tax expense
(993)
(1,332)
(25.5)
(3,191)
(2,740)
16.5
Profit (Loss) for the year attributable to owners of the Company
2,853
(239)
>100
7,735
2,893
>100

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the fourth quarter and financial year ended 31 December

 
Group
Fourth Quarter Ended 31 Dec
Financial Year Ended 31 Dec
2016
2015
2016
2015
S$'000
S$'000
S$'000
S$'000
Profit (Loss) for the year
2,853
(239)
7,735
2,893
Items that will not be reclassified subsequently to profit or loss
Increase in valuation of freehold land – hotels 1,890 12,945 1,890 12,945
Income tax relating components of other comprehensive income that will not be reclassified subsequently (65) (82) (65) (82)
Total 1,825 12,863 1,825 12,863
Items that may be reclassified subsequently to profit or loss
Fair value gain (loss) recognised in fair value reserve
109
1,346
384
(573)
Transfer from fair value reserve to profit or loss upon disposal of available-for-sale investments
(60)
(1,302)
(39)
(925)
Net fair value changes on available-for-sale financial assets
49
44
345
(1,498)
Remeasurement of defined benefit obligation
27
27
Exchange differences arising on consolidation
671
3,749
1,663
(12,526)
Total
747
3,793
2,035
(14,024)
Other comprehensive income (loss) for the period
2,572
16,656
3,860
(1,161)
Total comprehensive income for the year attributable to owners of the Company
5,425
16,417
11,595
1,732

Balance Sheets

 
The Group
31 Dec 16
31 Dec 15
S$'000
S$'000
ASSETS
Current assets
Cash and bank balances
14,721
17,037
Held-for-trading investments
6,268
3,743
Available-for-sale investments
8,119
8,230
Trade receivables
3,629
4,022
Other receivables, deposits and
prepaid expenses
1,363
1,584
Inventories
770
772
Tax recoverable
4
7
Total current assets
34,874
35,395
Non-current assets
Deferred tax assets
-
-
Subsidiaries
-
-
Available-for-sale investments
3,435
3,434
Other assets
1,147
1,129
Goodwill
1,829
1,783
Property, plant and equipment
590,216
588,808
Investment properties
94,390
93,492
Total non-current assets
691,017
688,646
Total assets
725,891
724,041
LIABILITIES AND EQUITY
Current liabilities
Bank loans
13,805
19,814
Trade payables
3,587
4,927
Other payables
4,580
3,823
Current portion of finance lease
42
20
Income tax payable
2,591
2,369
Total current liabilities
24,605
30,953
Non-current liabilities
Other payables
95
110
Retirement benefits obligations
663
598
Long-term bank loans
137,858
137,345
Finance lease
-
14
Deferred tax liabilities
19,803
19,549
Total non-current liabilities
158,419
157,616
Capital and reserves
Share capital
100,438
100,438
Asset revaluation reserve
354,185
352,360
Employee benefit reserve
198
171
Fair value reserve
2,075
1,730
Translation reserve
(12,960)
(14,623)
Retained earnings
98,931
95,396
Total equity
542,867
535,472
Total liabilities and equity
725,891
724,041

Review Of Group Performance

Fourth quarter 2016 vs. Fourth quarter 2015

The Group's revenue for fourth quarter increased by 7.8% or S$1.092 million from S$14.012 million in 2015 to S$15.104 million in 2016 mainly due to higher room revenue and higher rental income from investment properties.

The Group had profit after income tax of S$2.853 million for fourth quarter 2016 as opposed to loss after income tax of S$0.239 million for fourth quarter 2015 mainly due to higher room revenue, higher investment properties' rental income, lower finance costs and lower income tax expenses.

Financial year ended 2016 vs. Financial year ended 2015

The Group's revenue for financial year ended 31 December 2016 increased by 2.5% or S$1.424 million from S$57.280 million in 2015 to S$58.704 million in 2016 mainly due to higher room revenue and higher rental income from investment properties, higher spa revenue and higher car park revenue.

The Group made a profit after income tax of S$7.735 million for financial year ended 31 December 2016 as compared to S$2.893 million for financial year ended 31 December 2015. Adjusting for write back of prior years' impairment loss on investment property of S$0.284 million in Royal Properties and write back of prior year's impairment loss on hotel building of S$0.813 million in Hotel Royal Bangkok @ Chinatown, the adjusted profit after income tax for financial year ended 31 December 2016 was as follows:

 
2016
2015
+ / (-)
+ / (-)
S$'000
S$'000
S$'000
%
Profit after income tax
7,735
2,893
4,842
>100
Adjusted for:        
- One-off stamp duty and legal fee expenses relating to the acquisition of :        
- The Baba House
-
312
(312)
(100)
- The remaining five retail units on ground floor of Penang Plaza
-
86
(86)
(100)
- Impairment loss on hotel building in Hotel Royal Bangkok @ Chinatown
-
829
(829)
(100)
- Impairment loss on goodwill for investment in the Baba House
-
1,384
(1,384)
(100)
- Write back of prior years' impairment loss on investment property in Royal Properties
(284)
-
(284)
100
- Write back of prior year's impairment loss on hotel building in Hotel Royal Bangkok @ Chinatown
(813)
-
(813)
100
Adjusted profit after income tax
6,638
5,504
1,134
20.6

The 20.6% or S$1.134 million increase in the Group's adjusted profit after income tax for financial year ended 31 December 2016 as compared to 2015 was mainly due to lower operating expenses and lower finance costs.

In the opinion of the Directors, no transaction has arisen between 31 December 2016 and the date of this report which would materially affect the results of the Group and the Company for the period just ended.

Outlook

The hospitality industry in Singapore, Malaysia and Thailand continues to be very competitive and the Group expects more challenges in the year ahead. The Group will continue to focus on improving our service quality and enhancing the customers' experience, so as to improve our room occupancy and room rates.

The Group will continue to actively upgrade the properties in New Zealand to maximize their rental income through improved room occupancy and average rental rate.

The Group's managed fund portfolio will be affected by world events such as the concerns over the impact of BREXIT and potential interest rate increase.

In addition to the above, the Group's profitability will continue to be influenced by fluctuations in exchange rates of currencies such as the New Zealand dollar, United States dollar, Malaysian ringgit and Thai baht against Singapore dollar; mark-to-market gains or losses in our investment portfolio and potential increase in interest rate.