This printed article is located at http://hongfok.listedcompany.com/financials.html

Financials

Condensed Interim Financial Statements For The Six Months Ended 30 June 2025

Financials Archive

Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Condensed Interim Consolidated Statement Of Comprehensive Income

Note:
Included in Profit before tax is net profit on sale of development properties of approximately $2,137,000 (2024: $609,000).

Condensed Interim Statements Of Financial Position

Review of Performance

The Group posted a revenue of approximately $46.9 million for this period as compared to approximately $44.6 million for the previous corresponding period. The net increase in revenue of approximately $2.3 million was mainly due to higher revenue from the sale of its residential unit in Concourse Skyline. The commercial investment properties also generated higher revenue but this was offset by lower income from YOTEL Singapore Orchard Road (“YOTEL”).

The Group’s other income decreased due to the absence of gain on redemption of its debt investments in this period. However, this was cushioned by a one-off income from the completion of the sale of a remnant plot of land at University Road in Singapore.

The increase in depreciation expense arose from the additions of property, plant and equipment in this period.

The changes in fair value of other investments at fair value through profit or loss was mainly due to the net fair value gain in the valuation of its other investments as at 30 June 2025 as compared to the net fair value loss in the valuation as at 30 June 2024.

With the recognition of the higher sales revenue from its development properties, there was also an increase in the cost of sales of development properties for this period as compared to the previous corresponding period.

The increase in employee benefit expenses in this period was mainly due to the provision of other long-term employee benefits for certain Management under the ex-gratia payment plan for a period of time.

The increase in rental commission for this period as compared to the previous corresponding period was mainly due to more leases of its properties being introduced by real estate agents.

The net exchange loss for this period as compared to exchange gain for the previous corresponding period was mainly due to the strengthening of the Singapore dollar for its investments in securities and cash and cash equivalents denominated in Hong Kong dollars.

The decrease in finance income for this period was mainly due to the absence of the deferred day one gain on Hong Kong dollar unsecured bonds.

The decrease in finance expense for this period was mainly due to a decrease in the amount on amortisation of imputed interest on Hong Kong dollar unsecured bonds and lower interest rates on loans as compared to the previous corresponding period.

The increase in tax expense for this period was mainly due to higher taxable profit from companies in a tax-paying status as compared to the previous corresponding period.

Overall, the Group posted a profit of approximately $4.9 million as compared to approximately $2.7 million in the previous corresponding period.

Consequently, the Group’s profit attributable to Owners of the Company was approximately $5.4 million as compared to approximately $3.6 million in the previous corresponding period.

The net decrease in investment properties was primarily attributable to the translation loss on properties in Hong Kong, which outweighed the increase arising from the purchase of five units in International Building during this period.

The increase in other investments was mainly due to the Group’s net purchase of equity investments in this period and net fair value gain on valuation/exchange loss of its equity investments as at 30 June 2025.

The decrease in development properties was mainly due to the sale of the residential unit in Concourse Skyline.

The net decrease in trade and other receivables was mainly due to the monies paid in 2024 for the acquisition of the units in International Building being capitalised as investment properties upon completion of the purchase in February 2025.

The increase in the current loans and borrowings was due to its secured loan due in the second quarter of 2026 being reclassified from non-current liability as at 31 December 2024 to current liability as at 30 June 2025. The pledged bank deposit for this secured loan was also reclassified from non-current asset to current asset. The Group is confident that the tenor of the loan can be extended on or before its maturity date or the loan can be repaid by its maturity date.

The net increase in the non-current loans and borrowings was mainly for the purchase of the units in International Building and purchase of other investments.

The decrease in lease liabilities was mainly due to the monthly payments of lease commitments.

The increase in current tax liabilities was mainly due to the net effect in provision of tax and the instalment payments of tax for this period.

As at 30 June 2025, the Group’s cash and cash equivalents stood at $33.1 million. Net cash from operating activities arose mainly from rental income of its properties and collection from the sale of its development properties and was utilised to pay operating costs and expenses. Net cash used in investing activities arose mainly from the purchase of investment properties and other investments. Net cash from financing activities was mainly attributed to net proceeds from loans and borrowings and was utilised mainly for interest payment on loans and borrowings and dividend payment to shareholders.

Commentary On Current Year Prospects

In the first half of 2025, the hotel industry faced certain economic and operational challenges. YOTEL will continue to navigate the market headwinds by adopting a volume-led strategy to achieve higher occupancy rates. Ongoing average room rate pressure from a stronger Singapore dollar can have an impact on the income from YOTEL. With an exciting line-up of events in Singapore in the next few months, the performance of YOTEL may improve. The Group will continue to discuss with its hotel operator to reinforce the need for disciplined cost control, creative marketing and strategic manpower planning.

The strong competition from new launches of residential properties can affect the pace of our sales of the residential units in Concourse Skyline. The Group is expected to recognise revenue from the sales of the units in the second half of 2025.

The commercial property market in Singapore seems to have stabilised. Companies are renewing their leases to avoid high relocation costs. The Group expects the rental income from its properties to remain stable and will continue to boost its marketing efforts.