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First Quarter Financial Statement Announcement for the Period Ended 31 March 2018

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Profit & Loss

Profit & Loss

Notes:

  1. Included in Revenue is investment income of approximately $6,000 (2017 : $Nil)
  2. Included in Other income is gain on disposal of property, plant and equipment of approximately $Nil (2017 : $33,000).
  3. NM – Not Meaningful.
  4. NA – Not Applicable.

A statement of financial position

Balance Sheet

# Amount less than $1,000

Review of Performance

The Group’s revenue increased from approximately $14.2 million to $17.7 million. This was mainly due to contribution from its hotel, YOTEL Singapore Orchard Road (“YOTEL”) in this current period. YOTEL commenced operations only in the last quarter of 2017.

The decrease in Group’s other income of approximately $0.09 million was mainly due to lower government grants/schemes and absence of gain on disposal of property, plant and equipment and licence fees from its investment properties.

The depreciation expense in the first quarter of 2017 was higher than the current quarter because certain office equipment was fully depreciated in that quarter.

The increase in finance expense for the current period as compared to the previous period was mainly due to the non-capitalisation of interest expense, increases in loans and borrowings and higher amortised transaction costs on loans.

The Group posted a profit of approximately $0.6 million as compared to a loss of approximately $3.3 million in the corresponding previous period.

Consequently, the Group’s profit attributable to owners of the Company was approximately $1.5 million as compared to a loss of approximately $1.6 million in the previous corresponding period.

The increase in the Group’s property, plant and equipment was mainly due to the purchase of furniture and fittings for the residential units of its investment property in Hong Kong that was recently renovated.

The decrease in the Group’s other investments was mainly due to the redemption of the 5.7% fixed rate notes due January 2018 by its investee in Hong Kong.

The decrease in trade and other receivables was mainly due to the reclassification of transaction costs paid in December 2017, which was previously classified as prepayments, to loans and borrowings in the current period as the new loan was effected in January 2018.

The Group’s increase in loans and borrowings (non-current) was due mainly to the reclassification of certain loans and borrowings due in the first quarter of 2018 being repaid with new loans in this current period. This was partially offset by the reclassification of $120 million in principal amount of unsecured fixed rates due in the first quarter of 2019 from noncurrent in 2017 to current liabilities in this current period. Hence, the Group also recorded a decrease in loans and borrowings (current) as at 31 March 2018 as compared to 31 December 2017. The Group is confident that these notes can be refinanced or repaid from its available undrawn facilities by its due date. There was also an increase in loans to pay for accrued expenses and working capital requirements.

The decrease in trade and other payables was mainly due to the payments of staff costs, accrued development costs and interest expense accrued as at 31 December 2017.

The increase in current tax liabilities was mainly due to the provision of tax expense during this period.

Commentary On Current Year Prospects

The Group is expected to recognise sales of some of the residential units of Concourse Skyline in the second quarter of 2018 and the Group hopes to achieve more sales. The Group’s investment properties, including YOTEL will continue to contribute recurring income for the Group.