ANALYTICAL
REVIEW
Revenue
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Hotel Investments | 59,490 | 62,176 | (2,686) | -4% |
| Branded Residences and Extended Stay | 122,788 | 69,398 | 53,390 | 77% |
| - Hotel Residences | 22,345 | 58,683 | (36,338) | -62% |
| - Laguna Residences and Extended Stay | 8,149 | 10,715 | (2,566) | -24% |
| - Development Site Sales | 92,294 | - | 92,294 | 100% |
| Fee-based Segment | 38,950 | 26,258 | 12,692 | 48% |
| - Hotel/Fund/Club Management | 24,946 | 10,049 | 14,897 | 148% |
| - Spa/Gallery Operations | 6,475 | 7,927 | (1,452) | -18% |
| - Design and Other Services | 7,529 | 8,282 | (753) | -9% |
| Total | 221,228 | 157,832 | 63,396 | 40% |
Revenue increased by S$63.4 million or 40% from S$157.8 million to S$221.2 million for the year ended 31 December 2021 mainly due to higher revenue from Branded Residences and Extended Stay and Fee-based segments, partially offset by lower revenue from Hotel Investments segment.
Hotel Investments segment achieved revenue of S$59.5 million, a decrease of 4% or S$2.7 million compared to S$62.2 million in FY2020. The decrease in revenue was mainly from Thailand (S$22.3 million) as the COVID-19 outbreak impacted international travel borders only after Q1 FY2020. Maldives reported revenue of S$37.1 million which was S$20.1 million higher than the same period last year. Revenue from the Branded Residences and Extended Stay segment increased by S$53.4 million or 77% to S$122.8 million for FY2021. This was mainly due to sale of development land in Gold Coast and Brisbane, Australia for S$92.3 million.
Revenue from the Fee-based segment increased by S$12.7 million or 48% to S$39.0 million in FY2021. This was mainly due to higher management fees from our hotels which had benefitted from strong domestic demand such as in China and the gradual reopening of the travel borders.
Other Income
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Total | 13,224 | 1,747 | 11,477 | nm |
Other income increased by S$11.5 million from S$1.7 million in FY2020 to S$13.2 million in FY2021. This was mainly due to fee recovery from a discontinued project in Meydan, Dubai and fair value gain on investment properties in Singapore.
Costs and Expenses
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Cost of operating supplies | 9,916 | 9,682 | 234 | 2% |
| Cost of properties sold | 100,824 | 36,186 | 64,638 | 179% |
| Salaries and related expenses | 50,602 | 55,943 | (5,341) | -10% |
| Administrative expenses | 28,691 | 55,777 | (27,086) | -49% |
| Sales and marketing expenses | 7,123 | 7,933 | (810) | -10% |
| Other operating expenses | 25,646 | 27,041 | (1,395) | -5% |
| Impairment loss on financial assets | 7,111 | 2,135 | 4,976 | 233% |
| Total | 229,913 | 194,697 | 35,216 | 18% |
Cost of operating supplies
Cost of operating supplies increased by S$0.2 million or 2% from S$9.7 million to S$9.9 million for the year ended 31 December 2021, in line with higher revenue from Maldives hotels, partially cushioned by lower cost incurred from Thailand hotels and Spa/Gallery operations.
Cost of properties sold
Cost of properties sold increased by S$64.6 million or 179% from S$36.2 million to S$100.8 million for the year ended 31 December 2021 mainly due to the sale of development land in the Gold Coast and Brisbane, Australia.
Salaries and related expenses
Salaries and related expenses decreased by S$5.3 million or 10% from S$55.9 million to S$50.6 million for the year ended 31 December 2021, mainly due to lower headcount as a result of a group-wide restructuring exercise since April 2020 and the absence of one-off severance payments of S$7.3 million paid to employees in FY2020, partially offset by gradually withdrawal of the unpaid leave program and absence of government grants.
Administrative expenses
Administrative expenses decreased by S$27.1 million or 49% from S$55.8 million to S$28.7 million for the year ended 31 December 2021. This was mainly due to one-off gains of S$30.2 million relating to lower write-down of property development costs (S$14.3 million), lower write-down of property plant and equipment (S$5.8 million), absence of losses on warranty claims in FY2020 (S$4.3 million), lower fair value loss on Convertible Bonds (S$3.0 million) and reversal of impairment on receivables from Banyan Tree Assets (China) Pte. Ltd. (S$2.8 million). It was partially offset by higher provision for doubtful debts and higher legal and professional fees.
Sales and marketing expenses
Sales and marketing expenses decreased by S$0.8 million or 10% from S$7.9 million to S$7.1 million for the year ended 31 December 2021, mainly due to lower marketing expenses incurred for hotels.
Other operating expenses
Other operating expenses decreased by S$1.4 million or 5% from S$27.0 million to S$25.6 million for the year ended 31 December 2021, mainly due to lower guest supplies, lower repair and maintenances, lower travelling expenses and lower provision for replacement of operating equipment.
Impairment loss on financial assets
Impairment loss on financial assets increased by S$5.0 million or 233% from S$2.1 million to S$7.1 million for the year ended 31 December 2021 mainly due to higher provision for loss allowance and lower write-back of impairment loss in FY2021.
Operating Profit / (Loss) and Core Operating Profit1
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Hotel Investments | (18,363) | (14,328) | 4,035 | 28% |
| Branded Residences and Extended Stay | 12,270 | 223 | 12,047 | nm |
| - Hotel Residences | 8,852 | 5,912 | 2,940 | 50% |
| - Laguna Residences and Extended Stay | (1,880) | (5,689) | (3,809) | -67% |
| - Development Site Sales | 5,298 | - | - | 100% |
| Fee-based Segment | 10,646 | (8,586) | 19,232 | nm |
| - Hotel/Fund/Club Management | 10,029 | (2,105) | 12,134 | nm |
| - Spa/Gallery Operations | 2,415 | (3,098) | 5,513 | nm |
| - Design and Other Services | (1,798) | (3,383) | (1,585) | -47% |
| Head Office Expenses | (13,238) | (14,174) | (936) | -7% |
| Other Income (Net) | 13,224 | 1,747 | 11,477 | nm |
| Operating Profit/(Loss) | 4,539 | (35,118) | 39,657 | nm |
| One-off Adjustments | 800 | 39,400 | (38,600) | -98% |
| Core Operating Profit1 | 5,339 | 4,282 | 1,057 | 23% |
1 Refers to Operating Profit/(Loss) excluding one-off gains or losses. This is an alternative financial measurement and do not have a standardised meaning prescribed by International Financial Reporting Standards.
Operating Profit increased by S$39.6 million from a loss of S$35.1 million to a profit of S$4.5 million for the year ended 31 December 2021, mainly due to higher contribution from Fee-based and Branded Residences and Extended Stay segments as well as fee recovery from a discontinued hotel project in Dubai that was recorded in Other Income. If one-off adjustments of S$38.6 million were excluded, Core Operating Profit was S$1.0 million higher than FY2020.
One-off adjustments in FY2021 includes impairment loss on property, plant and equipment (S$0.4 million), write-down of property development costs (S$1.6 million) and fair value loss on convertible bonds (S$2.7 million), partially cushioned by write-back of loss allowance on receivables from Banyan Tree Assets (China) Pte. Ltd. due to collections (S$2.8 million) and fair value gain on investment properties (S$1.1 million). Similar adjustment items in FY2020 includes impairment loss on property, plant and equipment (S$6.3 million), write-down of property development costs (S$15.8 million), fair value loss on convertible bonds (S$5.7 million), one-off settlement of claim arising from joint venture formation in China (S$4.3 million) and severance payments (S$7.3 million).
Depreciation of Property, Plant and Equipment and Right-of-use Assets
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Total | 21,845 | 25,557 | (3,712) | -15% |
Depreciation of property, plant and equipment and right-of-use assets decreased by S$3.7 million from S$25.6 million to S$21.8 million for the year ended 31 December 2021, mainly due to reduction in property, plant and equipment due to write-downs in 2020 and 2021, and transfer of Angsana House to Investment properties.
Finance Costs
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Total | 39,974 | 33,448 | 6,526 | 20% |
Finance costs increased by S$6.5 million from S$33.4 million to S$40.0 million for the year ended 31 December 2021, mainly due to higher fair value adjustment of imputed interest on long-term receivables which are repayable by instalments of S$6.2 million. Without this adjustment, finance costs for FY2021 was S$0.3 million higher mainly due to higher interest on convertible bonds as the Group recorded full year interest in 2021 as compared to five months in 2020. This was partially cushioned by absence of medium term notes interest as the Group fully repaid medium term notes of S$100.0 million upon maturity in June 2020 and lower interest from interest-bearing loans and borrowings due to scheduled repayment.
Share of Results of Associates
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Total | 2,647 | (6,686) | 9,333 | nm |
For the year ended 31 December 2021, the Group share of associates’ net profit of S$2.6 million as compared to share of associates’ net loss of S$6.7 million for the year ended 31 December 2020. This was mainly due to share of fair value profit of the Group’s associate, Banyan Tree Indochina Hospitality Fund L.P. (“Indochina Fund”) in FY2021 as compared to a share of fair value loss in FY2020 and share of profits of the Group’s China associates due to better performance in China operations.
Income Tax Expense
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Total | 9,454 | 7,936 | 1,518 | 19% |
On income tax expense, FY2021 recorded income tax expense of S$9.5 million, notwithstanding losses incurred during the year, mainly due to deferred tax assets written-off arising from uncertainty of our ability to generate sufficient operating profit to utilise such tax assets, deferred tax assets not recognised for some of the loss-making companies and higher withholding tax expense due to higher revenue.
Non-controlling Interests
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Total | (6,082) | (6,670) | (588) | -9% |
Non-controlling interests’ share of loss of S$6.1 million for the year ended 31 December 2021 decreased by S$0.6 million to S$6.7 million for the year ended 31 December 2020 mainly due to lower loss from LRH.
Loss Attributable to Owners of the Company
| 2021 S$’000 | 2020 S$’000 | Increase/(Decrease) S$’000 | % |
|
| Total | (55,192) | (95,838) | (40,646) | -42% |
As a result of the foregoing, loss attributable to owners of the Company was S$55.2 million for the year ended 31 December 2021 as compared to S$95.8 million for the year ended 31 December 2020.
Cash Flows
| 2021 S$’000 | 2020 S$’000 |
|
| Loss before taxation | (51,820) | (94,572) |
| Net increase from changes in working capital | 124,696 | 14,272 |
| Net interest paid, tax paid and others | (22,326) | (27,314) |
| Adjustment for non-cash items | 68,856 | 88,461 |
| Net cash flows generated from/(used in) operating activites | 119,406 | (19,153) |
| Net cash flows used in investing activities | (5,230) | (9,040) |
| Net cash flows used in financing activities | (50,517) | (50,559) |
| Net change in cash and cash equivalents | 63,659 | (78,752) |
| Net foreign exchange difference | (2,620) | (763) |
| Cash and cash equivalents at beginning of the year | 51,287 | 130,802 |
| Cash and cash equivalents at end of the year | 112,326 | 51,287 |
For the full year ended 31 December 2021, net cash flows generated from operating activities was S$119.4 million. This was mainly due to adjustments for non-cash items of S$68.9 million and increase in working capital of S$124.7 million but partially offset by loss before taxation of S$51.8 million, net interest paid of S$18.2 million and tax paid of S$2.7 million.
Net cash flows used in investing activities was S$5.2 million, mainly due to essential purchases of furniture, fittings and equipment by the Group’s resorts for their operations of S$6.8 million which was partially offset by proceeds from sale of warehouse in Singapore for S$1.0 million.
Net cash flows used in financing activities amounted to S$50.5 million, mainly due to repayments of bank borrowings of S$116.5 million, which was partially cushioned by additional bank borrowings of S$69.4 million. In addition, there was payment of lease liabilities of S$3.2 million mainly relating to our Maldives islands.
Use of Proceeds
| Debt Fund Raising - Issuance of S$50.4 million Convertible Bonds on 6 August 2020 | Utilisation Status as at 31 December 2021 |
| As announced on 7 August 2020, the Group raised S$50.4 million Convertible Bonds issue which was successfully completed and fully subscribed. | Proceeds were used for operating activities (S$3.0 million), scheduled repayment of bank loans (S$44.2 million), professional fees and related expenses in connection with rights issue (S$1.2 million) and balance in bank deposits for liquidity buffer (S$2.0 million). |
