Analytical Review
Revenue
Revenue increased by S$56.6 million or 21% from S$271.3 million to S$327.9 million for the year ended 31 December 2023, mainly due to higher revenue from the Hotel Investments and Fee-based segments, partially offset by lower revenue from the Residences segment.
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Hotel Investments | 180,708 | 134,496 | 46,212 | 34% |
| Residences | 87,316 | 90,839 | (3,523) | (4%) |
| Fee-based | 59,887 | 45,993 | 13,894 | 30% |
| - Hotel Management | 37,030 | 28,366 | 8,664 | 31% |
| - Spa, Wellbeing & Gallery | 8,581 | 6,321 | 2,260 | 36% |
| - Design & Other Services | 14,276 | 11,306 | 2,970 | 26% |
| Total | 327,911 | 271,328 | 56,583 | 21% |
The Hotel Investments segment achieved revenue of S$180.7 million for the year ended 31 December 2023, an increase of 34% or S$46.2 million compared to S$134.5 million in the prior year. This was largely due to better performance from Thailand (S$43.0 million) and Indonesia (S$4.2 million), which both recorded higher occupancy and RevPAR during the year.
Revenue from the Residences segment decreased by S$3.5 million or 4% to S$87.3 million for the year ended 31 December 2023. This was mainly due to lower recognition of residences sales, in particular from Skypark condominiums (phase 1) as sold units were substantially handed over to the buyers upon completion in 2022.
Revenue from the Fee-based segment increased by S$13.9 million or 30% to S$59.9 million for the year ended 31 December 2023. This notable increase was mostly from higher management fees generated by Group-managed hotels in Asia, due to a strong rebound in international tourism. Higher revenue from gallery, design services, golf and canal operations also contributed.
Other Income
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Total | 51,082 | 23,782 | 27,300 | 115% |
Other income increased by S$27.3 million from S$23.8 million to S$51.1 million for the year ended 31 December 2023, mainly due to a gain on re-measurement of a 40% previously-held equity interest in Banyan Tree Services (China) Pte. Ltd. and Banyan Tree Hotel Management (China) Pte. Ltd., collectively known as “CHMC” (S$33.5 million), and a gain on disposal of an investment property in Singapore (S$9.6 million). This was partially offset by the absence of a one-off gain S$15.4 million on expiry of the derivative component of convertible bonds recorded the prior year and lower fair value gain on investment properties.
Cost & Expenses
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Cost of operating supplies | 21,316 | 17,147 | 4,169 | 24% |
| Cost of properties sold | 38,268 | 50,367 | (12,099) | (24%) |
| Salaries and related expenses | 95,579 | 73,432 | 22,147 | 30% |
| Administrative expenses | 50,545 | 50,277 | 268 | 1% |
| Sales and marketing expenses | 25,961 | 13,548 | 12,413 | 92% |
| Other operating expenses | 55,332 | 48,471 | 6,861 | 14% |
| Impairment losses on financial assets | 1,932 | 167 | 1,765 | nm |
| Total | 288,933 | 253,409 | 35,524 | 14% |
Cost of Operating Supplies
Cost of operating supplies increased by S$4.2 million or 24% from S$17.1 million to S$21.3 million for the year ended 31 December 2023, in line with higher revenue from Hotel Investments.
Cost of Properties Sold
Cost of properties sold decreased by S$12.1 million or 24% from S$50.4 million to S$38.3 million for the year ended 31 December 2023. This was in line with lower recognition of residences sales.
Salaries and Related Expenses
Salaries and related expenses increased by S$22.2 million or 30% from S$73.4 million to S$95.6 million for the year ended 31 December 2023. This was largely attributable to higher headcount due to a pick-up in the hotel business in 2023.
Administrative Expenses
Administrative expenses increased by S$0.2 million or 1% from S$50.3 million to S$50.5 million for the year ended 31 December 2023. This was mainly due to realised translation losses from liquidation of dormant entities and write-down of property development costs in Thailand and Indonesia, partially cushioned by write-back of impairment loss on property, plant and equipment in Thailand and Morocco.
Sales and Marketing Expenses
Sales and marketing expenses increased by S$12.4 million or 92% from S$13.5 million to S$26.0 million for the year ended 31 December 2023, mainly due to higher marketing expenses incurred for hotels and property sales.
Other Operating Expenses
Other operating expenses increased by S$6.9 million or 14% from S$48.5 million to S$55.3 million for the year ended 31 December 2023, largely due to higher expenses incurred for utilities, fuel and gas, guest supplies, credit card commission, travelling expenses, and repair and maintenance.
Impairment Losses on Financial Assets
Impairment losses on financial assets increased by S$1.7 million from S$0.2 million to S$1.9 million for the year ended 31 December 2023, mainly due to higher provision for loss allowance on receivables during the year.
Operating Profit and Core Operating Profit1
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Hotel Investments | 30,692 | 4,358 | 26,334 | nm |
| Residences | 21,630 | 20,555 | 1,075 | 5% |
| Fee-based | 10,854 | 12,151 | (1,297) | (11%) |
| - Hotel Management | 7,663 | 10,689 | (3,026) | (28%) |
| - Spa, Wellbeing & Gallery | 2,075 | (292) | 2,367 | nm |
| - Design & Other Services | 1,116 | 1,754 | (638) | (36%) |
| Head Office Expenses | (24,198) | (19,145) | 5,053 | 26% |
| Other Income (net) | 51,082 | 23,782 | 27,300 | 115% |
| Operating Profit | 90,060 | 41,701 | 48,359 | 116% |
| One-off Adjustments | (38,178) | (21,127) | (17,051) | 81% |
| Core Operating Profit1 | 51,882 | 20,574 | 31,308 | 152% |
- Core Operating Profit = Operating Profit excluding one-off gains or losses. This is an alternative financial measurement and do not have a standardised meaning prescribed by Singapore Financial Reporting Standards (International).
Operating Profit increased by S$48.4 million from S$41.7 million to S$90.1 million for the year ended 31 December 2023. This was mostly attributable to higher contribution from the Hotel Investments segment due to higher revenue and higher other income as mentioned earlier. Notwithstanding lower revenue, the Residences segment recorded higher Operating Profit mainly due to recognition during the year of more high-end residences (i.e. Angsana Oceanview Residences), which had a higher average margin as compared to the units recognised in 2022. The Fee-based segment recorded a lower Operating Profit despite higher revenue, mainly because of higher operating and sales and marketing expenses. Head office expenses increased, mainly because of higher foreign exchange losses due to realised translation losses from liquidation of dormant entities. If one-off adjustments were excluded, Core Operating Profit was S$31.3 million higher than in 2022.
One-off adjustments in 2023 included a gain on re-measurement of 40% previously held equity interest in CHMC (S$33.5 million), a gain on disposal of an investment property in Singapore (S$9.6 million), fair value gain on investment properties (S$4.3 million) and write-back of impairment loss on property, plant and equipment (S$3.9 million), partially offset by realised translation losses from liquidation of dormant entities (S$9.8 million) and write-down of property development costs in Thailand and Indonesia (S$3.3 million). Similar adjustment items in 2022 included a one-off gain on expiry of the derivative component of convertible bonds (S$15.4 million) and fair value gain on investment properties (S$6.9 million), partially offset by allowance for impairment loss on property, plant and equipment (S$0.8 million) and write-down of property development costs (S$0.4 million).
Depreciation of Property, Plant and Equipment and Right-of-use Assets
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Total | 23,469 | 19,086 | 4,383 | 23% |
Depreciation of property, plant and equipment and right-of-use assets increased by S$4.4 million from S$19.1 million to S$23.5 million for the year ended 31 December 2023, mainly due to depreciation of right-of-use assets related to an island lease in Maldives, which commenced in February 2023 upon renewal.
Finance Costs
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Total | 22,312 | 22,681 | (369) | (2%) |
Finance costs decreased by S$0.4 million from S$22.7 million to S$22.3 million for the year ended 31 December 2023, largely due to absence of interest on convertible bonds that were fully redeemed in August 2022, partially cushioned by higher finance costs on lease liability.
Share of Results of Associates
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % | |
| Total | 6,179 | (5,328) | (851) | 16% |
The share of associates’ net loss increased by S$0.9 million mainly due to the share of assets revaluation loss of Banyan Tree Indochina Hospitality Fund L.P. (“Indochina Fund”) in 2023, contrasting with a revaluation gain in the previous year, along with bad debts written off by China associates. However, this negative variance was partially offset by improved hotel performance in both China and Vietnam, as well as the absence of fair value adjustments for imputed interest on receivables recorded in 2022.
Income Tax Expense
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Total | 9,732 | 712 | 9,020 | nm |
Income tax expense increased by S$9.0 million from S$0.7 million to S$9.7 million for the year ended 31 December 2023 mainly due to higher taxable profit for the year.
Non-controlling Interests
| 2023 S$’000 | 2022 S$’000 | Incr/(Decr) S$’000 | % |
|
| Total | 1,147 | (194) | 1,341 | nm |
Non-controlling interests’ share of profit was S$1.1 million for the year ended 31 December 2023, as compared to share of loss of S$0.2 million for the year ended 31 December 2022. This was mainly due to better performance by Laguna Resorts & Hotels Public Company Limited (“LRH”).
Profit Attributable to Owners of the Company
| 2022 S$’000 | 2021 S$’000 | Incr/(Decr) S$’000 | % | |
| Total | 31,708 | 767 | 30,941 | nm |
As a result of the foregoing, profit attributable to owners of the Company was S$31.7 million for the year ended 31 December 2023, as compared to S$0.8 million for the year ended 31 December 2022.
Cash Flows
| 2023 S$’000 | 2022 S$’000 |
|
| Profit before taxation | 42,587 | 1,285 |
| Net (decrease)/increase from changes in working capital | (3) | 92,615 |
| Net interest paid, tax paid and others | (17,963) | (24,350) |
| Adjustment for non-cash items | 16,221 | 21,338 |
| Net cash flows generated from operating activites | 40,842 | 90,888 |
| Net cash flows generated from/(used in) investing activities | 6,514 | (17,906) |
| Net cash flows used in financing activities | (7,664) | (90,932) |
| Net change in cash and cash equivalents | 39,692 | (17,950) |
| Net foreign exchange difference | (1,784) | (1,581) |
| Cash and short-term deposits at beginning of the year | 92,795 | 112,326 |
| Cash and short-term deposits at end of the year | 130,703 | 92,795 |
For the full year ended 31 December 2023, net cash flows generated from operating activities was S$40.8 million. This was mainly due to profit after taxation of S$42.6 million and non-cash items of S$16.2 million, but partially offset by net interest paid of S$13.3 million and tax paid of S$4.4 million.
Net cash flows generated from investing activities was S$6.5 million mostly due to acquisition of CHMC, net of cash acquired (S$35.7 million) and purchase of furniture, fittings and equipment by the Group’s resorts for their operations (S$27.8 million), partially cushioned by proceeds from the sale of Angsana House, Singapore (S$40.5 million), sale of minority interest in Banyan Tree Mayakoba, Mexico (S$13.8 million) and redemption of Redeemable Convertible Preference Shares (“RCPS”) (S$11.9 million).
Net cash flows used in financing activities amounted to S$7.7 million, largely due to proceeds from bank loans (S$129.7 million), partially offset by repayments of bank borrowings (S$125.3 million) and payment of lease liabilities (S$11.9 million) relating mainly to our Maldives islands.