TIDMASPL
RNS Number : 0601Q
Aseana Properties Limited
27 August 2014
27 August 2014
Aseana Properties Limited
("Aseana" or the "Company")
Half-Year Results for the Six Months Ended 30 June 2014
Aseana Properties Limited (LSE: ASPL), a property developer
investing in Malaysia and Vietnam, listed on the Main Market of the
London Stock Exchange, announces its half-year results for the
six-month period ended 30 June 2014.
Operational highlights:
-- SENI Mont' Kiara won the World Silver Award at The
International Real Estate Federation ("FIABCI") World Prix
d'Excellence Awards 2014 in the residential (High Rise) category.
Sale of properties at SENI Mont' Kiara is progressing well
achieving 91% sales to date, compared to 88% recorded in April
2014. A further 6% is reserved with deposit paid.
-- The RuMa Hotel and Residences ("The RuMa") achieved 43% sales
based on sales and purchase agreement signed, with a further 8%
reserved with deposit paid.
-- The Aloft Kuala Lumpur Sentral Hotel's ("Aloft") average
occupancy rate stood at 68% for the six-month period ended 30 June
2014, while Four Points by Sheraton Sandakan Hotel's ("FPSS") was
at 42%.
-- Aseana entered into a share sale agreement with Malaysian
Resources Corporation Berhad ("MRCB") to dispose of its 40% stake
in Excellent Bonanza Sdn. Bhd. ("EBSB") for a cash consideration of
RM20.0 million (US$6.2 million). EBSB is the developer of the Kuala
Lumpur Sentral Office Towers and Hotel project ("KL Sentral
Project"). The transaction was completed on 19 August 2014.
-- A plot of land measuring 4.7 hectares (11 acres) at the
International Hi-Tech Healthcare Park ("IHTHP") was sold and
development rights transferred to AEON Vietnam Co. Ltd. ("AEON
Vietnam"). The transaction was completed on 1 August 2014.
Financial highlights:
-- Unaudited revenue of US$31.49 million for the six-month
period ended 30 June 2014 (30 June 2013 (unaudited): US$10.22
million)
-- Unaudited loss before tax for the six-month period ended 30
June 2014 of US$4.76 million (30 June 2013 (unaudited): loss of
US$13.73 million)
-- Unaudited loss after tax for the six-month period ended 30
June 2014 of US$7.66 million (30 June 2013 (unaudited): loss of
US$14.44 million)
-- Unaudited consolidated comprehensive loss of US$6.66 million
for the six months period ended 30 June 2014 (30 June 2013
(unaudited): loss of US$13.57 million)
-- Unaudited net asset value of US$154.63 million at 30 June
2014 (31 December 2013 (audited): US$158.57 million) or US$0.729
per share* (31 December 2013 (audited): US$0.748 per share)
-- Unaudited realisable net asset value of US$270.82 million at
30 June 2014 (31 December 2013 (unaudited): US$266.04 million) or
US$1.277 per share* (31 December 2013 (unaudited): US$1.255 per
share)
* NAV per share and RNAV per share as at 30 June 2014 are
calculated based on 212,025,000 voting shares (31 December 2013:
212,025,000 voting shares).
Commenting on the results, Mohammed Azlan Hashim, Chairman of
Aseana, said:
"We are pleased that the results for the first half of 2014 have
improved significantly compared to the corresponding period in
2013, despite challenges in the property markets in both Malaysia
and Vietnam. The Group will continue to pursue an opportunistic yet
cautious approach in managing and realising cash flows from its
projects. As we move into the second half of 2014, the Group will
continue to focus on improving the operation and performance of its
key operating assets."
The Group has also published its Quarterly Investment Update
(including updates on projects and RNAV figures) for the period to
30 June 2014, which can be obtained on its website at
www.aseanaproperties.com/quarterly.htm.
For further information:
Aseana Properties Limited Tel: 603 6411 6388
Chan Chee Kian Email: cheekian.chan@ireka.com.my
N+1 Singer Tel: 020 7496 3000
James Maxwell (Corporate Finance) Email: james.maxwell@n1singer.com
/Sam Greatrex (Sales) /sam.greatrex@n1singer.com
Tavistock Communications Tel: 020 7920 3150
Jeremy Carey / Faye Walters Email: jcarey@tavistock.co.uk
Notes to Editors:
London-listed Aseana Properties Limited (LSE: ASPL) is a
property developer investing in Malaysia and Vietnam.
Ireka Development Management Sdn Bhd ("IDM") is the exclusive
Development Manager for Aseana. It is a wholly-owned subsidiary of
Ireka Corporation Berhad, a company listed on the Bursa Malaysia
since 1993, which has over 45 years' experience in construction and
property development. IDM is responsible for the day-to-day
management of Aseana's property portfolio and the introduction and
facilitation of new investment opportunities.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report on the half-year results for Aseana
Properties Limited ("Aseana") and its group of companies ("the
Group") for the six months ended 30 June 2014.
In the year to date, the global economy has shown signs of
recovery though political unrest in Ukraine and the Middle East
pose notable challenges. Investment remains subdued amid the uneven
economic growth in the United States of America and Europe. China's
growth has also been curtailed amid by its government's reform
policies. Closer to home, the Malaysian economy has proven
resilient despite these global economic headwinds. Over the medium
term, however, there are important long-standing structural issues
such as the high levels of household debt which increased to 86.8%
of its Gross Domestic Product ("GDP") as at the end of 2013, among
the highest in Asia. The Central Bank of Malaysia recently
announced a hike in Overnight Policy Rate ("OPR") by 25 basis
points to 3.25%, the first rise in three years, to mitigate the
risk of broader economic and financial imbalances that could
undermine the growth prospects of the Malaysian economy.
The Vietnamese economy has resumed its path of gradual recovery
in the first half of 2014. GDP expanded 5.18% during the first six
month of the year and the Central Bank of Vietnam has recently
devalued the Vietnamese Dong by 1% to boost exports following the
domestic disturbances back in May triggered by the territorial
dispute with China. Vietnam's total Foreign Direct Investment
("FDI") disbursement reached US$5.75 billion in the first half of
2014, an increase of 0.9% y-o-y.
Results
For the six months ended 30 June 2014, Aseana and its group of
companies (the "Group") recorded unaudited revenue of US$31.49
million (H1 2013 (unaudited): US$10.22 million), which was mainly
attributable to the sale of completed units in SENI Mont' Kiara and
Tiffani. No revenue was recognised for The RuMa, in accordance with
IFRIC 15 - Agreements for Construction of Real Estate which
prescribes that revenue be recognised only when the properties are
completed and occupancy permits are issued.
The Group recorded an unaudited loss before tax for the period
of US$4.76 million (H1 2013 (unaudited): loss of US$13.73 million),
predominantly due to operating losses and financing costs of Four
Points by Sheraton Sandakan Hotel and Harbour Mall Sandakan
totaling US$2.74 million, together with an operating loss and
financing cost of City International Hospital of US$4.91
million.
The Group's unaudited loss after tax for the six-months ended 30
June 2014 stood at US$7.66 million (30 June 2013 (unaudited): loss
of US$14.44 million). Other comprehensive income include a foreign
currency translation gain of US$0.98 million (30 June 2013
(unaudited): loss of US$3.50 million) which was attributable to the
strengthening of the Ringgit against the US dollars. This resulted
in an unaudited consolidated comprehensive loss for the period of
US$6.66 million (30 June 2013 (unaudited): loss of US$13.57
million).
Unaudited net asset value for the Group for the period under
review decreased to US$154.63 million (31 December 2013 (audited):
US$158.57 million) or US$0.729 per share (31 December 2013:
US$0.748 per share) due to losses incurred for the period. However,
unaudited realisable net asset value improved to US$270.82 million
as at 30 June 2014 (31 December 2013 (unaudited): US$266.04
million) or US$1.277 per share (31 December 2013 (unaudited):
US$1.255 per share) mainly due to the improved market values of
IHTHP lands based on the latest market valuation exercise.
Review of Activities and Property Portfolio
Sales status (based on Sales and Purchase agreements
signed):
Projects % sales as
% sales as at
at December
31 July 2014 2013
-------------------------------- -------------- -----------
Tiffani by i-ZEN 99% 98%
SENI Mont' Kiara
* Proceeds received 87% 80%
* Pending completion 4% 4%
The RuMa Hotel and Residences 43% 38%
-------------------------------- -------------- -----------
Malaysia
SENI Mont' Kiara won the prestigious Silver prize in the FIABCI
(World Chapter) Prix D' Excellence Award 2014 for the High Rise
Residential Category, in May 2014. In line with this achievement,
sales recorded for SENI Mont' Kiara increased to 91%, compared to
88% previously. A further 6% is reserved with deposit paid.
The recent cooling measures imposed by the Malaysian Government
have affected the sales performance at The RuMa Hotel and
Residences. Sale of units at The RuMa inched up marginally to 43%
based on sales and purchase agreements signed, with a further 8%
being reserved with deposit paid. The Manager has planned numerous
sales events and initiatives over the next few months and will
continue to explore all opportunities to drive sales. Meanwhile,
construction of the main building is in progress and completion is
targeted for 2017.
The 482-room Aloft Kuala Lumpur Sentral Hotel ("Aloft"), managed
and operated by Starwood Asia Pacific Hotels Resort Pte. Ltd, has
achieved an average occupancy rate of 68% for the six-months ended
30 June 2014.
Aseana has entered into a share sale agreement with Malaysian
Resources Corporation Berhad ("MRCB") to dispose of its 40% stake
in Excellent Bonanza Sdn. Bhd. ("EBSB") for a cash consideration of
RM20 million (US$6.21 million). The transaction was completed on 19
August 2014. Aseana is expected to record a gain of approximately
RM16.4 million (US$5.1 million) from the disposal of 40% stake in
EBSB. EBSB, a joint venture company between MRCB and Aseana, is the
developer of the Kuala Lumpur Sentral Office Towers and Hotel
project. The disposal represents an early exit and realisation of
profits from the project which was originally planned for December
2015.
Sabah's tourism continues to be adversely impacted by the
disappearance of flight MH370 in March 2014 and also the recent
flight MH17 tragedy, along with the several kidnapping cases of
both tourists and locals, off the east coast of Sabah, over the
last few months. In Sandakan, the business environment remains
uncertain. Travel advisory notices were issued for the coastal
areas of eastern Sabah by countries such as the United States of
America, United Kingdom, Canada, Australia and New Zealand. The
Malaysian Government has imposed night time curfews along the
coastline of eastern Sabah as a new security measure. Average
occupancy rate at the Four Points by Sheraton Sandakan Hotel
("FPSS") stood at 42% for the six-months ended 30 June 2014. The
Management of FPSS continues to look at ways to improve efficiency
of the hotel operation and to work with relevant authorities to
increase tourist arrivals to Sandakan. The Harbour Mall Sandakan is
similarly affected and tenancy rate has remained at 47.0% as at
July 2014.
Moving forward, Aseana will focus on the operation and
performance of its key operating assets. The Company will also
continue its efforts to dispose of the remaining units at SENI
Mont' Kiara and Tiffani as well as to drive new sales for The
RuMa.
Vietnam
As at 3 August 2014, The City International Hospital ("CIH")
registered inpatient days of 1,459 days with average revenue per
inpatient admission of US$2,014. Outpatient visits as at 3 August
2014 stood at 5,144 visits with average revenue per visit of US$82.
Whilst the average revenues per patient are within the expected
range, the volume of patients has fallen short of expectations. The
Manager is working closely with the operator of CIH to improve
performance through targeted sales and marketing campaign, and
introduction of new service lines offered by CIH.
Aseana, through its 67%-owned subsidiary, Hoa Lam Shangri-La 3
Limited Liability Company ("HLSL3"), has entered into an agreement
with AEON Vietnam Co., Ltd. ("AEON Vietnam") to develop a retail
mall at the International Hi-Tech Healthcare Park ("IHTHP"). AEON
Vietnam is a subsidiary of AEON Co., Ltd. based in Japan, one of
the world's largest retailing groups with over 18,000 stores across
Japan and Asia. The transaction involves the disposal of a 4.7
hectares (11 acres) plot of land at IHTHP and also the transfer of
the development rights to AEON Vietnam. AEON Vietnam has on 21 June
2014, been awarded the Investment Certificate for the development,
and on 1 August 2014 successfully transferred the development
rights to AEON Vietnam. HLSL 3 will receive a net cash
consideration of approximately US$23 million from the transaction.
To date, 95% of the consideration has been received and the
remaining 5% will be disbursed by AEON Vietnam upon completion of
certain road infrastructure for the plot of land, expected in Q4
2014. From the cash proceeds received by HLSL3, US$14.6 million was
used to repay bank borrowings of IHTHP, with the remaining proceeds
being used for payment of infrastructure costs for the land,
Corporate Income Tax and working capital of the project.
The Vietnam Stock Index ("VN Index") has recovered following a
gradual decline between the end of March 2014 and the beginning of
August 2014, reflecting a more positive economic outlook for
Vietnam. At the date of this publication, Nam Long shares closed at
VND18,600 per share, improving from VND17,400 per share as at 30
June 2014.
MOHAMMED AZLAN HASHIM
Chairman
26 August 2014
DEVELOPMENT MANAGER'S REVIEW
Malaysia Economic Update
The Malaysian economy recorded a strong growth of 6.4% in the
first half of 2014, underpinned mainly by a surge in exports and
aided by low base effect. However, there are indications that
growth will taper moving into the second half of 2014. This
reflects the impact of the fiscal and monetary policy adjustments
by the Government such as the on-going subsidy rationalisation and
the upcoming Goods and Services Tax ("GST"). Although these
measures by the Government will undeniably dampen the domestic
demand especially consumer spending and Government expenditures,
GDP growth is expected to remain resilient. Malaysia continues to
build on its competitive position in electronics, automotive and
machinery manufacturing industries to move up the value chain into
high-technology and skill-intensive segments. AT Kearney has ranked
Malaysia 15(th) in its list of 2014 Foreign Direct Investment
Confidence Index, compared to being in the 25(th) position in
previous year.
Fitch Ratings has also reaffirmed Malaysia's sovereign ratings
at "A-" accompanied by cautious commentary on the credit weakness
in public finances relative to other "A" range peers. This remains
a source of downward pressure on the ratings for Malaysia. There
are concerns over the Malaysian Government's lack of progress on
structural budgetary reform and with the rising interest rates
which could impair household debt servicing capacity, the outlook
for Malaysia's long term default rating remains at "negative".
In July 2014, the central bank of Malaysia raised the overnight
policy rate ("OPR") by 25 basis points to 3.25%, the first increase
in three years, with the expectations that Malaysia's overall
economic growth momentum will be sustained. Amid the high and
rising household debt to GDP ratio, this increase will add to
consumers' costs of living and also reduce purchasing powers.
Prior to the announcement of the OPR hike, the Ringgit had hit
an eight-month high against the US dollar, reflecting renewed
investor confidence in the currency and making it the second
best-performing currency among the other Asean countries such as
Thailand, Indonesia, Singapore and Philippines.
The Consumer Sentiment Index and the Business Conditions Index
issued by the Malaysian Institute of Economic Research ("MIER") for
the second quarter of 2014 continue to move in tandem for four
consecutive quarters, reflecting synchronisation in both consumer
and business sentiments. The Consumer Sentiment Index rose 3.3
points to pass the 100-point benchmark to settle at 100.1 points
(Q1 2014: 96.8 points). This indicates neutral consumer sentiment
towards the outlook for employment. The Business Conditions Index
rose to 113.0 points (Q1 2014: 103.1 points) contributed by
increased sales in the manufacturing sector, strong domestic and
export orders and higher investment in new plant and equipment.
Overview of Property Market in Klang Valley, Malaysia
Offices
* 1 new office building was completed in Q2 2014,
increasing the total supply of office space in the
Klang Valley to 106.1 million sq.ft. Overall
occupancy increased to 81% (Q1 2014: 80%).
* Market rentals and prices remained stable, while
rental yield remained between 6% and 8%.
* En-bloc transaction during the quarter: (i) Platinum
Sentral (Prime A 5 blocks of 4 to 7 stories) located
in Kuala Lumpur Sentral was sold at RM1,576 psf (US$
482 psf).
* Occupancy rates are expected to remain around 80% as
some developers are likely to defer their project
completion dates. A total of 2.57 million sq.ft. is
scheduled to be completed by end 2014.
Retail
* Market prices and market rentals for retail centres
in Klang Valley were generally stable.
* Retail transactions in Q2 2014: (i) Pandan Safari
Lagoon (63 units of retail lots, 2 level of car parks
and roof top of the retail centre) were acquired by
CHN Commodity Trade Centre Sdn Bhd for RM147 psf
(US$45 psf) or total purchase consideration of RM50
million (US$15.31 million).
* Average occupancy rate in Klang Valley remained
stable at 84% in Q2 2014.
Residential
* 27 projects with 7,381 units condominium in Klang
Valley were completed in Q2 2014.
* 26 projects with 9,294 units were launched in Q2
2014.
* Market prices and market rental rates remained stable
in Q2 2014.
* Selected new launches: (i) Expressionz Professional
Suites - Blocks A&B (447 units), launched in Mar 2014
with an average price of RM1,300 psf (US$398 psf)
achieved 70% take-up rate; (ii) Residensi 22 Mont
Kiara - Block B (270 units), launched in April 2014
with an average price of RM850 psf (US$260 psf) is
50% sold.
Hospitality
* In Q2 2014, average daily room rate for International
class hotels in the Klang Valley (within Kuala Lumpur
City) and Business class hotels increased y-o-y by
7.1% and 2.5% respectively.
* Average occupancy rates for International class
hotels in Klang Valley increased to 73.3% as at April
2014, whilst average occupancy rates for Business
class hotels increased to 66.0% compared to the same
period in 2013.
* 9.3 million tourists visited Malaysia in first 4
months of 2014, an increase of 9.9% compared to Q2
2013.
* Tourism into Sabah has been adversely affected by
recent kidnapping cases and the loss of Flights MH370
and MH17.
-------------------------------------------------------------
Source: Bank Negara Malaysia website, Jones Lang Wootton Q2
report, MIER, various publications
Exchange rate - 30 June 2014: US$1:RM3.2113
Vietnam Economic Update
The Vietnamese economy picked up in the first half of 2014, with
growth of 5.2% following interest rate cuts by the central bank
alongside rising foreign investment and strong exports growth. The
World Bank forecasted Vietnam's 2014 GDP growth to be at 5.4% while
Vietnam's National Financial Supervisory Committee ("NFSC") expects
stronger growth of 5.7% to 5.8%. The central bank of Vietnam has
also devalued the Vietnamese dong by 1% to help boost exports
following the unrest in May triggered by the anti-Chinese protests
and also to create stability for the foreign exchange market.
On the back of continued macro-economic stability, Standard
& Poor ("S&P"), a global ratings firm has retained its BB
long term and B short term sovereign credit ratings on the country.
Furthermore, Moody's Investors Service upgraded Vietnam's credit
rating by raising the Government bond ratings from B2 to B1 with a
stable outlook and also raised the long term foreign currency bond
ceiling from B1 to Ba2 as well as its long term foreign currency
deposit ceiling from B3 to B2.
Vietnam's June 2014 CPI grew at the slowest pace in 13 years,
with a growth of 1.38% as compared to December 2013 and edged up by
4.98% compared to the same period last year, indicating subdued
consumer sentiments.
Foreign investment plays an important role in bolstering the
growth of many sectors. According to the Ministry of Planning and
Investment of Vietnam, statistics showed that the country attracted
US$6.85 billion in foreign direct investment ("FDI") in the first
half of 2014, including newly registered funds and extra capital
from operational projects. The total amount of FDI for the property
sector reached US$692.3 million, a 65% increase year on year. This
shows that Vietnam's property sector is once again attractive to
foreign investors. With the implementation of the new Land Law with
effect from 1 July 2014, foreign real estate investors are now
allowed to be allocated lands for the purpose of construction of
residential housing projects for sale or lease by the Government of
Vietnam. Previously, investors were only able to lease those lands
from the Government.
Although foreign tourist arrivals to Vietnam in the first six
months of the year increased by 21.2% to over 4.3 million,
political and safety concerns will remain issues for tourism in the
second half of 2014, especially for the hotels and resorts industry
following the East Sea tension between China and Vietnam in
May.
Overview of Property Market in Vietnam
Offices
* 1 Grade B and 2 Grade C office buildings entered the
market increasing the total supply to 1.43mil sqm by
2% q-o-q and 6% y-o-y.
* Overall occupancy rate decreased by 1% q-o-q but up
by 2% y-o-y to 89%. The decrease is due to soft
performance in Grade B office buildings.
* Average rental rates decreased by 1% q-o-q but up by
3% y-o-y, mainly due to decrease in Grade B and Grade
C office buildings average rent.
* Total office take-up decreased by 56% q-o-q and 46%
y-o-y, lowest compared to the 3 preceding years.
Grade C office buildings which accounted for 76% of
total take-up remained a preferred choice by tenants.
Retail
* Retail stock increased by 2.1% q-o-q and 11.7% y-o-y
contributed by the entrance of a shopping centre
(Saigon Mall, Go Vap District), 2 retail podiums
(Saigon Airport Plaza, Tan Binh District and Sunrise
City - Phase 1, District 7).
* Average rent in Q2 2014 stood at US$60 psm per month,
a decline of 1% q-o-q while average occupancy stood
at 87% with an increase of 2.1% q-o-q.
* HCMC's retail sales for the first 6 months of 2014
was estimated at US$14.8 billion, increased by 7.7%
y-o-y without inflation. However, the growth rate
remained low compared to 2013 (8.1%) and 2012 (8.9%).
Residential
* 11 new apartment projects and new phases of 8
existing apartment projects were launched in Q2 2014.
Total stock decreased by 2.6% q-o-q and 0.4% y-o-y as
several projects were put on hold.
* Overall apartments' absorption rate was at 17%, an
increase of 7% q-o-q and 9% y-o-y.
* 1 new townhouse project (38 units), 1 new phase of an
existing townhouse project (100 units) and 1 villa
project (48 units), were launched in Q2 2014,
increasing the supply of villa/townhouse by 6% q-o-q
and 9% y-o-y. 3 new projects with 335 land plots
launched in Q2 2014 increased land plot supply by
144% y-o-y but reduced by 11% q-o-q.
* Villa/townhouse market's absorption rate increased by
36% q-o-q while the absorption rate for land plot
increased by 25% q-o-q.
Hospitality
* 1 new 3-star hotel (85 rooms) entered the market, 1
3-star hotel reopened (86 rooms) while 1 3-star hotel
(61 rooms) was closed for renovation during Q2 2014,
increasing the stock by 1% q-o-q and 8% y-o-y.
* Average occupancy rate stood at 61%, a decline of 13%
q-o-q and 1% y-o-y, while average room rate decreased
by 9% q-o-q and 4% y-o-y to US$81 per room per night.
The decline in average room rate is seasonal and
reflects the tourism low season.
* 2 new serviced apartments (32 units) and 1 existing
project (9 units) entered the market in Q2 2014.
Average occupancy rate remained stable at 82%, an
increase of 3% y-o-y.
-------------------------------------------------------------
Source: General Statistics Office of Vietnam, Savills, CBRE,
various publications
Exchange rate - 30 June 2014: US$1:VND21,315
LAI VOON HON
President / Chief Executive Officer
Ireka Development Management Sdn. Bhd.
Development Manager
26 August 2014
PROPERTY PORTFOLIO AS AT 30 JUNE 2014
Project Type Effective Approx.
Ownership Gross
Floor Approx.
Area Land Area Actual/Scheduled
(sq m) (sq m) completion
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Completed projects
---------------------------------------------------------------------------------------------------------------------
Tiffani by i-ZEN Completed August
Kuala Lumpur, Malaysia Luxury condominiums 100.0% 81,000 15,000 2009
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Office suites,
office tower
1 Mont' Kiara by i-ZEN and retail Completed in November
Kuala Lumpur, Malaysia mall 100.0% 96,000 14,000 2010
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Phase 1: Completed
April 2011
SENI Mont' Kiara Phase 2: Completed
Kuala Lumpur, Malaysia Luxury condominiums 100.0% 225,000 36,000 October 2011
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Retail lots Completed
2009
Retail mall: Completed
Retail lots, March 2012
Sandakan Harbour Square hotel and retail Hotel: Completed
Sandakan, Sabah, Malaysia mall 100.0% 126,000 48,000 May 2012
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Kuala Lumpur Sentral Office towers Office Towers: Completed
Office Towers & Hotel and a business December 2012
Kuala Lumpur, Malaysia hotel 40.0% 107,000 8,000 Hotel: January 2013
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Aloft Kuala Lumpur Business-class
Sentral hotel hotel (a Starwood Completed in January
Kuala Lumpur, Malaysia Hotel) 100.0% 28,000 5,000 2013
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Phase 1: City International
Hospital, International
Hi-tech Healthcare
Park,
Ho Chi Minh City, Private general Completed in March
Vietnam hospital 67.2% 48,000 25,000 2013
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Projects under development
---------------------------------------------------------------------------------------------------------------------
The RuMa Hotel and Luxury residential
Residences Kuala Lumpur, tower and boutique First quarter of
Malaysia hotel 70.0% 40,000 4,000 2017
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Listed equity investment
---------------------------------------------------------------------------------------------------------------------
Listed equity investment Listed equity 12.9% n/a n/a n/a
in Nam Long Investment investment
Corporation,
an established developer
in Ho Chi Minh City,
Vietnam
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Pipeline projects
---------------------------------------------------------------------------------------------------------------------
Waterside Estates,
Ho Chi Minh City, Villas and
Vietnam high-rise apartments 55.0% 94,000 57,000 n/a
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Other developments Commercial
in International Hi-tech and residential
Healthcare Park, development
Ho Chi Minh City, with healthcare
Vietnam theme 67.2% 972,000 351,000 n/a
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
Kota Kinabalu seafront (i) Boutique 100.0% n/a 327,000 n/a
resort & residences resort hotel
resort villas
Kota Kinabalu, Sabah, (ii) Resort 80.0%
Malaysia homes
----------------------------- ----------------------- ----------- -------- ----------- -------------------------
*Shareholding as at 31 December 2013
n/a: Not available / not applicable
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHS ENDED 30 JUNE 2014
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
Continuing activities Notes US$'000 US$'000 US$'000
---------------------------------------------- ------ ----------- -------------------- ----------------------
Revenue 31,494 10,222 29,269
Cost of sales 5 (24,953) (8,379) (22,768)
---------------------------------------------- ------ ----------- -------------------- ----------------------
Gross profit 6,541 1,843 6,501
Other income 13,349 4,573 16,122
Administrative expenses (366) (872) (1,622)
Foreign exchange loss 6 (9) (443) (1,105)
Management fees (1,653) (1,821) (3,762)
Marketing expenses (591) (1,328) (1,953)
Other operating expenses (16,265) (8,978) (23,635)
---------------------------------------------- ------ ----------- -------------------- ----------------------
Operating profit/(loss) 1,006 (7,026) (9,454)
----------- -------------------- ----------------------
Finance income 227 208 424
Finance costs (5,760) (3,884) (9,766)
----------- -------------------- ----------------------
Net finance costs (5,533) (3,676) (9,342)
Share of loss of associate, net
of tax (229) (3,029) -
---------------------------------------------- ------ ----------- -------------------- ----------------------
Net loss before taxation (4,756) (13,731) (18,796)
Taxation 7 (2,906) (705) (2,854)
---------------------------------------------- ------ ----------- -------------------- ----------------------
Loss for the period/year (7,662) (14,436) (21,650)
---------------------------------------------- ------ ----------- -------------------- ----------------------
Other comprehensive income/(expense),
net of tax
Items that are or may be reclassified
subsequently to profit or loss
Foreign currency translation
differences for foreign operations 977 (3,498) (6,220)
Increase in fair value of available-for-sale
investments 26 4,361 126
---------------------------------------------- ------ ----------- -------------------- ----------------------
Total other comprehensive
income/(expense) for the
period/year 1,003 863 (6,094)
---------------------------------------------- ------ ----------- -------------------- ----------------------
Total comprehensive
loss for the
period/year (6,659) (13,573) (27,744)
---------------------------------------------- ------------------- -------------------- ----------------------
Loss attributable to:
Equity holders of the parent (5,198) (13,776) (19,006)
Non-controlling interests (2,464) (660) (2,644)
---------------------------------------------- ------------------- -------------------- ----------------------
Total (7,662) (14,436) (21,650)
---------------------------------------------- ------------------- -------------------- ----------------------
Total comprehensive
loss attributable to:
Equity holders of the parent (3,939) (12,661) (24,971)
Non-controlling interests (2,720) (912) (2,773)
---------------------------------------------- ------ ----------- -------------------- ----------------------
Total (6,659) (13,573) (27,744)
---------------------------------------------- ------ ----------- -------------------- ----------------------
Loss per share
Basic and diluted (US cents) 8 (2.45) (6.50) (8.96)
---------------------------------------------- ------ ----------- -------------------- ----------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Unaudited Unaudited Audited
-------------------------------- ------
As at As at As at
30 June 30 June 31 December
--------------------------------
2014 2013 2013
Notes US$'000 US$'000 US$'000
-------------------------------- ------ ------------------- ---------------------- -------------------
Non-current assets
Property, plant and equipment 1,091 1,126 1,146
Investment in an associate 2,023 - 2,252
Available-for-sale investments 12,723 16,932 12,697
Intangible assets 13,208 13,738 13,525
Deferred tax assets 682 - 595
-------------------------------- ------ ------------------- ---------------------- -------------------
Total non-current assets 29,727 31,796 30,215
-------------------------------- ------ ------------------- ---------------------- -------------------
Current assets
Inventories 416,597 426,284 428,609
Held-for-trading financial
instrument 388 383 375
Trade and other receivables 14,651 10,747 9,912
Amount due from an associate 943 - 853
Current tax assets 127 251 233
Cash and cash equivalents 26,911 19,745 24,585
-------------------------------- ------ ------------------- ---------------------- -------------------
Total current assets 459,617 457,410 464,567
-------------------------------- ------ ------------------- ---------------------- -------------------
TOTAL ASSETS 489,344 489,206 494,782
-------------------------------- ------ ------------------- ---------------------- -------------------
Equity
Share capital 10,601 10,626 10,601
Share premium 218,926 218,926 218,926
Capital redemption reserve 1,899 1,874 1,899
Translation reserve (1,872) (260) (3,105)
Fair value reserve 152 4,361 126
Accumulated losses (75,074) (64,604) (69,876)
-------------------------------- ------ ------------------- ---------------------- -------------------
Shareholders' equity 154,632 170,923 158,571
Non-controlling interests 9,271 12,321 11,429
-------------------------------- ------ ------------------- ---------------------- -------------------
Total equity 163,903 183,244 170,000
-------------------------------- ------ ------------------- ---------------------- -------------------
Non-current liabilities
Amount due to non-controlling
interests 1,085 - 1,440
Loans and borrowings 9 68,972 51,094 49,309
Medium term notes 10 143,333 159,312 140,877
-------------------------------- ------ ------------------- ---------------------- -------------------
Total non-current liabilities 213,390 210,406 191,626
-------------------------------- ------ ------------------- ---------------------- -------------------
Current liabilities
Trade and other payables 79,474 56,527 83,640
Amount due to an associate - 557 -
Amount due to non-controlling
interests 9,587 10,177 9,008
Loans and borrowings 9 6,934 26,677 25,466
Medium term notes 10 14,013 - 13,739
Current tax liabilities 2,043 1,618 1,303
-------------------------------- ------ ------------------- ---------------------- -------------------
Total current liabilities 112,051 95,556 133,156
-------------------------------- ------ ------------------- ---------------------- -------------------
Total liabilities 325,441 305,962 324,782
-------------------------------- ------ ------------------- ---------------------- -------------------
TOTAL EQUITY AND LIABILITIES 489,344 489,206 494,782
-------------------------------- ------ ------------------- ---------------------- -------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2014 - UNAUDITED
Total Equity
Attributable
Capital Fair to Equity Non-
Share Share Redemption Translation Value Accumulated Holders of Controlling Total
Capital Premium Reserve Reserve Reserve Losses the Parent Interests Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- --------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
At 1 January
2014 10,601 218,926 1,899 (3,105) 126 (69,876) 158,571 11,429 170,000
Non-controlling
interests
contribution - - - - - - - 562 562
Loss for the
period - - - - - (5,198) (5,198) (2,464) (7,662)
Total other
comprehensive
income - - - 1,233 26 - 1,259 (256) 1,003
--------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Total
comprehensive
loss - - - 1,233 26 (5,198) (3,939) (2,720) (6,659)
----------------- --------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Shareholders'
equity at
30 June 2014 10,601 218,926 1,899 (1,872) 152 (75,074) 154,632 9,271 163,903
================= ========= ========= ============ ============ ========= ============ ============= ============= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2013 - UNAUDITED
Total Equity
Attributable
Capital Fair to Equity Non-
Share Share Redemption Translation Value Accumulated Holders of Controlling Total
Capital Premium Reserve Reserve Reserve Losses the Parent Interests Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- --------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
At 1 January
2013 10,626 218,926 1,874 2,986 - (50,828) 183,584 13,063 196,647
Non-controlling
interests
contribution - - - - - - - 170 170
Loss for the
period - - - - - (13,776) (13,776) (660) (14,436)
Total other
comprehensive
income - - - (3,246) 4,361 - 1,115 (252) 863
--------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Total
comprehensive
loss - - - (3,246) 4,361 (13,776) (12,661) (912) (13,573)
----------------- --------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Shareholders'
equity at
30 June 2013 10,626 218,926 1,874 (260) 4,361 (64,604) 170,923 12,321 183,244
================= ========= ========= ============ ============ ========= ============ ============= ============= =========
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013 - AUDITED
Total
Equity
Attributable
to Equity
Capital Fair Holders Non-
Share Share Redemption Translation Value Accumulated of the Controlling Total
Capital Premium Reserve Reserve Reserve Losses Parent Interests Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- --------- ---------- ------------ ------------- -------- ------------- ------------- ------------- -----------
1 January
2013 10,626 218,926 1,874 2,986 - (50,828) 183,584 13,063 196,647
Changes
in ownership
interests
in subsidiaries - - - - - (42) (42) 42 -
Non-controlling
interests
contribution - - - - - - - 1,097 1,097
--------- ---------- ------------ ------------- -------- ------------- ------------- ------------- -----------
Loss of
the year - - - - - (19,006) (19,006) (2,644) (21,650)
Total other
comprehensive
expense - - - (6,091) 126 - (5,965) (129) (6,094)
--------- ---------- ------------ ------------- -------- ------------- ------------- ------------- -----------
Total
comprehensive
loss - - - (6,091) 126 (19,006) (24,971) (2,773) (27,744)
Cancellation
of shares (25) - 25 - - - - - -
----------------- --------- ---------- ------------ ------------- -------- ------------- ------------- ------------- -----------
Shareholders'
equity at
31 December
2013 10,601 218,926 1,899 (3,105) 126 (69,876) 158,571 11,429 170,000
================= ========= ========== ============ ============= ======== ============= ============= ============= ===========
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED 30 JUNE 2014
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
--------------------------------------------- ------------ ------------ --------------------
Cash Flows from Operating Activities
Net loss before taxation (4,756) (13,731) (18,796)
Finance income (227) (208) (424)
Finance costs 5,760 3,884 9,766
Share of losses of associates, net
of tax 229 3,029 -
Unrealised foreign exchange loss 1 378 1,065
Impairment of goodwill 317 107 320
Depreciation of property, plant
and equipment 59 61 114
Property, plant and equipment written
off - - 7
Fair value (gain)/ loss on held-for-trading
financial instrument (1) 5 5
--------------------------------------------- ------------ ------------ --------------------
Operating profit/ (loss) before
working capital changes 1,382 (6,475) (7,943)
Changes in working capital:
Decrease/ (increase) in inventories 16,711 (85,533) (96,690)
(Increase)/ decrease in receivables (4,597) 1,978 2,063
(Decrease)/ increase in payables (5,497) 2,498 28,884
--------------------------------------------- ------------ ------------ --------------------
Cash generated from/ (used in) operations 7,999 (87,532) (73,686)
Interest paid (5,760) (5,141) (9,766)
Tax paid (2,197) (1,124) (4,029)
--------------------------------------------- ------------ ------------ --------------------
Net cash generated from/ (used in)
operating activities 42 (93,797) (87,481)
--------------------------------------------- ------------ ------------ --------------------
Cash Flows From Investing Activities
Advances from non-controlling interests 486 370 1,081
Issuance of ordinary shares of subsidiaries
to non-
controlling interests 562 170 1,097
(Advances to)/ repayment from associate (88) 239 (630)
Disposal of held-for-trading financial
instrument - 982 899
Purchase of property, plant and
equipment (13) (50) (154)
Finance income received 227 208 424
--------------------------------------------- ------------ ------------ --------------------
Net cash generated from investing
activities 1,174 1,919 2,717
--------------------------------------------- ------------ ------------ --------------------
Consolidated Statement of Cash Flows (CONT'D)
SIX MONTHS ENDED 30 JUNE 2014
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
--------------------------------------------- ------------ ------------ --------------------
Cash Flows From Financing Activities
Repayment of loans and borrowings
and medium term notes (6,212) (5,111) (17,341)
Drawdown of loans and borrowings
and medium term notes 7,075 101,243 110,860
(Increase)/ decrease in pledged
deposits placed in licensed banks (30) - 77
--------------------------------------------- ------------ ------------ --------------------
Net cash generated from financing
activities 833 96,132 93,596
--------------------------------------------- ------------ ------------ --------------------
Net changes in cash and cash equivalents
during the period/year 2,049 4,254 8,832
Effect of changes in exchange rates 247 (845) (248)
Cash and cash equivalents at the
beginning of the period/year 14,166 5,582 5,582
--------------------------------------------- ------------ ------------ --------------------
Cash and cash equivalents at the
end of the period/year 16,462 8,991 14,166
--------------------------------------------- ------------ ------------ --------------------
Cash and Cash Equivalents
Cash and cash equivalents included in the consolidated statement
of cash flows comprise the following consolidated statement of financial
position amounts:
Cash and bank balances 8,125 6,345 11,498
Short term bank deposits 18,786 13,400 13,087
--------------------------------------------- ------------ ------------ --------------------
26,911 19,745 24,585
Less: Deposits pledged (10,449) (10,754) (10,419)
--------------------------------------------- ------------ ------------ --------------------
Cash and cash equivalents 16,462 8,991 14,166
--------------------------------------------- ------------ ------------ --------------------
During the financial period/year, the Group acquired property,
plant and equipment with an aggregate cost of US$13,000 (30 June
2013: US$91,000; 31 December 2013: US$194,000) of which US$Nil (30
June 2013: US$41,005; 31 December 2013: US$40,000) was acquired by
means of finance leases.
During the financial period/year, US$562,000 (30 June 2013:
US$170,000; 31 December 2013: US$1,097,000) of ordinary shares of
subsidiaries were issued to non-controlling shareholders, of which
US$562,000 (30 June 2013: US$170,000; 31 December 2013:
US$1,097,000) was satisfied via cash consideration.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 30 JUNE 2014
1 General Information
The principal activities of the Group are acquisition,
development and redevelopment of upscale residential, commercial,
hospitality and healthcare projects in the major cities of Malaysia
and Vietnam. The Group typically invests in development projects at
the pre-construction stage and may also selectively invests in
projects in construction and newly completed projects with
potential capital appreciation.
2 Summary of Significant Accounting Policies
2.1 Basis of Preparation
The interim condensed consolidated financial statements for the
six months ended 30 June 2014 has been prepared in accordance with
IAS 34, Interim Financial Reporting.
The interim condensed consolidated financial statements should
be read in conjunction with the annual financial statements for the
year ended 31 December 2013 which has been prepared in accordance
with IFRS.
Taxes on income in the interim period are accrued using the tax
rate that would be applicable to expected total annual
earnings.
The interim results have not been audited nor reviewed and do
not constitute statutory financial statements.
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of expenses during
the reporting period. Although these estimates are based on
management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates.
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 31 December 2013 as
described in those annual financial statements.
The interim report and financial statements were approved by the
Board of Directors on 26 August 2014.
3 SegmentAL Information
The Group's assets and business activities are managed by Ireka
Development Management Sdn. Bhd. ("IDM") as the Development Manager
under a management agreement dated 27 March 2007.
Segmental information represents the level at which financial
information is reported to the Executive Management of IDM, being
the chief operating decision maker as defined in IFRS 8. The
Executive Management consists of the Chief Executive Officer, the
Chief Financial Officer, Chief Operating Officer and Chief
Investment Officer of IDM. Management determines the operating
segments based on reports reviewed and used by the Executive
Management for strategic decision making and resource allocation.
For management purposes, the Group is organised into project
units.
The Group's reportable operating segments are as follows:
(i) Investment Holding Companies - investing activities;
(ii) Ireka Land Sdn. Bhd. - develops Tiffani by i-ZEN and 1
Mont' Kiara by i-ZEN;
(iii) ICSD Ventures Sdn. Bhd. - owns and operates Harbour Mall
Sandakan and Four Points by Sheraton Sandakan Hotel;
(iv) Amatir Resources Sdn. Bhd. - develops SENI Mont' Kiara;
(v) Iringan Flora Sdn. Bhd. - owns and operates Aloft Kuala
Lumpur Sentral Hotel; and
(vi) Hoa Lam-Shangri-La Healthcare Group - owns and develops
City International Hospital and Hi-Tech
Healthcare Park.
Other non-reportable segments comprise the Group's new
development projects. None of these segments meets any of the
quantitative thresholds for determining reportable segments in 2014
and 2013.
Information regarding the operations of each reportable segment
is included below. The Executive Management monitors the operating
results of each segment for the purpose of performance assessments
and making decisions on resource allocation. Performance is based
on segment gross profit/(loss) and profit/(loss) before taxation,
which the Executive Management believes are the most relevant in
evaluating the results relative to other entities in the industry.
Segment assets and liabilities are presented inclusive of
inter-segment balances and inter-segment pricing is determined on
an arm's length basis.
The Group's revenue generating development projects are
currently only in Malaysia since development activities in Vietnam
are still at early stages of development and operation.
Operating Segments - ended 30 June 2014 - Unaudited
Hoa
Investment Amatir Iringan Lam-Shangri-La
Holding Ireka Land ICSD Ventures Resources Flora Sdn. Healthcare
Companies Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Bhd. Group Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- ----------- ----------- -------------- ----------- ------------- ----------------- ----------
Segment
(loss)/profit
before taxation (694) 415 (2,929) 4,939 (245) (5,418) (3,932)
================= =========== =========== ============== =========== ============= ================= ==========
Included in the
measure of
segment
(loss)/profit
are:
Revenue - 4,069 - 27,425 - - 31,494
Cost of
acquisition
written down - (110) - (5,844) - - (5,954)
Goodwill
impairment - - - (317) - - (317)
Marketing
expenses - - - (226) - - (226)
Depreciation
of
property, plant
and equipment - - (5) - (4) (48) (57)
Finance costs - - (2,130) - (2,469) (1,161) (5,760)
Finance income 2 7 152 34 12 17 224
================= =========== =========== ============== =========== ============= ================= ==========
Segment assets 16,911 4,687 107,704 67,744 81,327 117,201 395,574
Included in the
measure of
segment
assets are:
Addition to
non-current
assets other
than financial
instruments and
deferred tax
assets - - 12 - - - 12
================= =========== =========== ============== =========== ============= ================= ==========
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Statement of comprehensive income US$'000
---------------------------------------- ------------------------
Total loss for reportable segments (3,932)
Other non-reportable segments (825)
Depreciation (2)
Finance income 3
---------------------------------------- ------------------------
Consolidated loss before taxation (4,756)
======================================== ========================
Operating Segments - ended 30 June 2013 - Unaudited
Hoa
Investment Amatir Iringan Flora Lam-Shangri-La
Holding Ireka Land ICSD Ventures Resources Sdn. Bhd. Healthcare
Companies Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Group Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
---------------- ----------- ----------- -------------- ----------- ---------------- --------------- ----------
Segment
(loss)/profit
before
taxation (4,731) (121) (2,954) 93 (3,000) (1,569) (12,282)
================ =========== =========== ============== =========== ================ =============== ==========
Included in the
measure of
segment
(loss)/profit
are:
Revenue - 436 401 9,385 - - 10,222
Cost of
acquisition
written down - (8) (68) (1,976) - - (2,052)
Goodwill
impairment - - - (107) - - (107)
Marketing
expenses - - - (437) - - (437)
Depreciation
of
property,
plant
and equipment - (2) (5) (1) (3) (49) (60)
Finance costs - - (2,240) (201) (1,310) (133) (3,884)
Finance income 2 2 150 11 26 14 205
================ =========== =========== ============== =========== ================ =============== ==========
Segment assets 17,254 10,364 109,177 92,062 81,692 94,167 404,716
Included in the
measure of
segment
assets are:
Addition to
non-current
assets other
than financial
instruments
and
deferred tax
assets - - 6 - 62 23 91
================ =========== =========== ============== =========== ================ =============== ==========
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Statement of comprehensive income US$'000
---------------------------------------- ------------------------
Total loss for reportable segments (12,282)
Other non-reportable segments (1,451)
Depreciation (1)
Finance income 3
---------------------------------------- ------------------------
Consolidated loss before taxation (13,731)
======================================== ========================
Operating Segments - ended 31 December 2013 - Audited
Hoa
Investment Ireka Amatir Iringan Lam-Shangri-La
Holding Land Sdn. ICSD Ventures Resources Flora Sdn. Healthcare
Companies Bhd. Sdn. Bhd. Sdn. Bhd. Bhd. Group Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
---------------- ------------- ------------ --------------- ------------ ------------ --------------- ---------
Segment (loss)/
profit before
taxation (2,217) (323) (5,927) 4,169 (4,382) (7,559) (16,239)
================ ============= ============ =============== ============ ============ =============== =========
Included in
the measure
of segment
(loss)/profit
are:
Revenue - 1,278 433 27,558 - - 29,269
Cost of
acquisition
written down - (33) (68) (5,918) - - (6,019)
Goodwill
impairment - - - (320) - - (320)
Marketing
expenses - - - (711) - - (711)
Depreciation
of property,
plant and
equipment - (2) (10) (1) (7) (91) (111)
Finance costs - - (4,464) (252) (3,841) (1,209) (9,766)
Finance income 7 4 301 28 44 27 411
================ ============= ============ =============== ============ ============ =============== =========
Segment assets 18,273 9,703 105,954 81,743 79,231 110,545 405,449
Included in
the
measure of
segment assets
are:
Addition to
non-
current assets
other than
financial
instruments
and
deferred tax
assets - - 5 - 44 145 194
================ ============= ============ =============== ============ ============ =============== =========
Reconciliation of reportable segment revenues, profit or loss, assets
and liabilities and other material items
Statement of comprehensive income US$'000
------------------------------------ ---------
Total loss for reportable segments (16,239)
Other non-reportable segments (2,567)
Depreciation (3)
Finance income 13
------------------------------------ ---------
Consolidated loss before taxation (18,796)
==================================== =========
30 June 2014 - Unaudited Addition to
US$'000 non-current
Revenue Depreciation Finance costs Finance income Segment assets assets
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Total reportable segment 31,494 (57) (5,760) 224 395,574 12
Other non-reportable
segments - (2) - 3 93,770* 1
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Consolidated total 31,494 (59) (5,760) 227 489,344 13
========================== ======== ============= ============== =============== =============== =============
30 June 2013 - Unaudited Addition to
US$'000 non-current
Revenue Depreciation Finance costs Finance income Segment assets assets
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Total reportable segment 10,222 (60) (3,884) 205 404,716 91
Other non-reportable
segments - (1) - 3 84,490* -
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Consolidated total 10,222 (61) (3,884) 208 489,206 91
========================== ======== ============= ============== =============== =============== =============
31 December 2013 - Audited Addition to
US$'000 non-current
Revenue Depreciation Finance costs Finance income Segment assets assets
---------------------------- -------- ------------- -------------- --------------- --------------- -------------
Total reportable segment 29,269 (111) (9,766) 411 405,449 194
Other non-reportable
segments - (3) - 13 89,333* -
---------------------------- -------- ------------- -------------- --------------- --------------- -------------
Consolidated total 29,269 (114) (9,766) 424 494,782 194
============================ ======== ============= ============== =============== =============== =============
* Included in segment asset for other non-reportable segments is
US$53,675,000 (30 June 2013: US$42,449,000; 31 December 2013:
S$49,696,000) in relation to assets of Urban DNA Sdn. Bhd..
Geographical Information - ended 30 June 2014 - Unaudited
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
-------------------- --------- -------- -------------
Revenue 31,494 - 31,494
Non-current assets 5,288 24,439 29,727
==================== ========= ======== =============
For the financial period ended 30 June 2014, no single customer
exceeded 10% of the Group's total revenue.
Geographical Information - ended 30 June 2013 - Unaudited
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
-------------------- --------- -------- -------------
Revenue 10,222 - 10,222
Non-current assets 3,138 28,658 31,796
==================== ========= ======== =============
For the financial period ended 30 June 2013, no single customer
exceeded 10% of the Group's total revenue.
Geographical Information - ended 31 December 2013 - Audited
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
-------------------- ---------- -------- -------------
Revenue 29,269 - 29,269
Non-current assets 5,741 24,474 30,215
==================== ========== ======== =============
For the financial year ended 31 December 2013, no single
customer exceeded 10% of the Group's total revenue.
4 Seasonality
The Group's business operations are not materially affected by
seasonal factors for the period under review.
5 Cost of Sales
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
------------------------------ ----------- ----------- -------------
Direct costs attributable to
property development 24,953 8,379 22,768
------------------------------ ----------- ----------- -------------
6 Foreign exchange loss
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
---------------------------------- ----------- ----------- ------------------
Foreign exchange loss comprises:
Realised foreign exchange loss (8) (65) (40)
Unrealised foreign exchange
loss (1) (378) (1,065)
(9) (443) (1,105)
---------------------------------- ----------- ----------- ------------------
7 Taxation
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
--------------------------------------- ----------- ----------- --------------
Current tax expense 2,980 705 3,470
Deferred tax credit (74) - (616)
--------------------------------------- ----------- ----------- --------------
Total tax expense for the period/year 2,906 705 2,854
--------------------------------------- ----------- ----------- --------------
The numerical reconciliation between the income tax expense and
the product of accounting results multiplied by the applicable tax
rate is computed as follows:
Unaudited Unaudited Audited
Six months Six months Year
ended ended Ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
--------------------------------------- ----------- ----------- -------------
Net loss before taxation (4,756) (13,731) (18,796)
--------------------------------------- ----------- ----------- -------------
Income tax at a rate of 25%* (1,189) (3,433) (4,699)
Add :
Tax effect of expenses not deductible
in determining taxable profit 1,596 2,437 4,989
Movement of unrecognised deferred
tax benefits 1,673 1,773 1,833
Tax effect of different tax rates
in subsidiaries** 1,027 108 960
Less :
Tax effect of income not taxable
in determining taxable profit (201) (183) (377)
Under provision - 3 148
--------------------------------------- ----------- ----------- -------------
Total tax expense for the period/year 2,906 705 2,854
--------------------------------------- ----------- ----------- -------------
* The applicable corporate tax rate in Malaysia and Vietnam is 25%.
** The applicable corporate tax rate in Singapore is 17%. A
subsidiary of the Group, Hoa Lam-Shangri-La Healthcare Ltd
Liability Co is granted a preferential corporate tax rate of 10%
for its profit/(loss) arising from hospital income. The
preferential income tax rate is given by the government of Vietnam
due to the subsidiary's involvement in the healthcare and education
industries.
The Company is treated as a tax resident of Jersey for the
purpose of tax laws and is subject to a tax rate of 0%.
A Goods and Services Tax was introduced in Jersey in May 2008.
The Company has been registered as an International Services Entity
so that it does not have to charge or pay local GST. The cost for
this registration is GBP200 per annum.
The Directors intend to conduct the Group's affairs such that
the central management and control is not exercised in the United
Kingdom and so that neither the Company nor any of its subsidiaries
carries on any trade in the United Kingdom. The Company and its
subsidiaries will thus not be residents in the United Kingdom for
taxation purposes. On this basis, they will not be liable for
United Kingdom taxation on their income and gains other than income
derived from a United Kingdom source.
8 LOSS Per Share
Basic and diluted loss per ordinary share
The calculation of basic and diluted loss per ordinary share for
the period/year ended was based on the loss attributable to equity
holders of the parent and a weighted average number of ordinary
shares outstanding, calculated as below:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
------------------------------------- ------------------- ----------- -------------
Loss attributable to equity holders
of the parent (5,198) (13,776) (19,006)
Weighted average number of shares 212,025 212,025 212,025
Loss per share
Basic and diluted (US cents) (2.45) (6.50) (8.96)
------------------------------------- ------------------- ----------- -------------
9 Loans and Borrowings
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2014 2013 2013
Group US$'000 US$'000 US$'000
--------------------------- --- ---------- ---------- -------------
Non-current
Bank loans 68,936 51,040 49,267
Finance lease liabilities 36 54 42
-------------------------------- ---------- ---------- -------------
68,972 51,094 49,309
------------------------------- ---------- ---------- -------------
Current
Bank loans 6,920 26,666 25,452
Finance lease liabilities 14 11 14
-------------------------------- ---------- ---------- -------------
6,934 26,677 25,466
------------------------------- ---------- ---------- -------------
75,906 77,771 74,775
------------------------------- ---------- ---------- -------------
The effective interest rates on the bank loans and hire purchase
arrangement for the period ranged from 5.25% to 14.90% (30 June
2013: 5.20% to 23.00%; 31 December 2013: 5.25% to 17.70%) per annum
and 2.50% (30 June 2013: 2.50%; 31 December 2013: 2.50% to 3.50%)
per annum respectively.
Borrowings are denominated in Ringgit Malaysia, United States
Dollars and Vietnam Dong.
Bank loans are repayable by monthly, quarterly or semi-annually
instalments.
Bank loans are secured by land held for property development,
work-in-progress, operating assets of the Group, pledged deposits
and some by the corporate guarantee of the Company.
Finance lease liabilities are payable as follows:
Present value
of minimum
Future minimum lease payment
lease payment Interest 30 June
30 June 30 June 2014
Group - Unaudited 2014 US$'000 2014 US$'000 US$'000
---------------------------- --------------- -------------- ---------------
Within one year 16 2 14
Between one and five years 42 6 36
---------------------------- --------------- -------------- ---------------
58 8 50
---------------------------- --------------- -------------- ---------------
Present value
of minimum
Future minimum lease payment
lease payment Interest 30 June
30 June 30 June 2013
Group - Unaudited 2013 US$'000 2013 US$'000 US$'000
---------------------------- --------------- -------------- ---------------
Within one year 13 2 11
Between one and five years 62 8 54
---------------------------- --------------- -------------- ---------------
75 10 65
---------------------------- --------------- -------------- ---------------
Present value
of minimum
Future minimum Interest lease payment
lease payment 31 December 31 December
31 December 2013 2013
Group - Audited 2013 US$'000 US$'000 US$'000
---------------------------- --------------- ------------- ---------------
Within one year 16 2 14
Between one and five years 49 7 42
---------------------------- --------------- ------------- ---------------
65 9 56
---------------------------- --------------- ------------- ---------------
10 Medium Term Notes
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
----------------------------------- ---------- ---------- ------------
Outstanding medium term notes 160,060 162,630 156,924
Net transaction costs (2,714) (3,318) (2,308)
Less:
Repayment due within twelve
months (14,013) - (13,739)
----------------------------------- ---------- ---------- ------------
Repayment due after twelve months 143,333 159,312 140,877
----------------------------------- ---------- ---------- ------------
The medium term notes ("MTN") were issued by a subsidiary to
fund two development projects known as Sandakan Harbour Square and
Aloft Kuala Lumpur Sentral Hotel in Malaysia. US$76.3 million were
drawn down in 2011 for Sandakan Harbour Square. US$4.7 million were
drawn down in 2012 for Aloft Kuala Lumpur Sentral Hotel and the
remaining US$79.1 million in 2013. The weighted average interest
rate of the MTN was 5.51% per annum at the statement of the
financial position date. The effective interest rates of the medium
term notes and their outstanding amounts are as follows:
Interest rate
Maturity Dates % per annum US$'000
------------------------- ------------------ -------------- ----------
Series 1 Tranche FG 8 December
001 2014 5.38 7,785
Series 1 Tranche BG 8 December
001 2014 5.33 6,228
Series 1 Tranche FG 8 December
002 2015 5.46 14,013
Series 1 Tranche BG 8 December
002 2015 5.41 9,342
Series 2 Tranche FG 8 December
001 2015 5.46 21,798
Series 2 Tranche BG 8 December
001 2015 5.41 17,127
Series 3 Tranche FG001 1 October 2015 5.40 3,114
Series 3 Tranche BG001 1 October 2015 5.35 1,557
29 January
Series 3 Tranche FG002 2016 5.50 4,671
29 January
Series 3 Tranche BG002 2016 5.45 3,114
Series 3 Tranche FG003 8 April 2016 5.65 40,171
Series 3 Tranche BG003 8 April 2016 5.58 31,140
------------------------- ------------------ -------------- ----------
160,060
-------------------------------------------- -------------- ----------
The medium term notes are secured by way of:
(i) bank guarantee from two financial institutions in respect of the BG Tranches;
(ii) financial guarantee insurance policy from Danajamin
Nasional Berhad in respect to the FG Tranches;
(iii) a first fixed and floating charge over the present and
future assets and properties of Silver Sparrow Berhad, ICSD
Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd. by way of a
debenture;
(iv) a third party first legal fixed charge over ICSD Ventures Sdn. Bhd.'s assets and land;
(v) assignment of all Iringan Flora Sdn. Bhd.'s present and
future rights, title, interest and benefits in and under the Sales
and Purchase Agreement to purchase the Aloft Kuala Lumpur Sentral
Hotel from Excellent Bonanza Sdn. Bhd.;
(vi) first fixed land charge over the Aloft Kuala Lumpur Sentral
Hotel and the Aloft Kuala Lumpur Sentral Hotel's land (to be
executed upon construction completion);
(vii) a corporate guarantee by Aseana Properties Limited;
(viii) letter of undertaking from Aseana Properties Limited to
provide financial and other forms of support to ICSD Ventures Sdn.
Bhd. to finance any cost overruns associated with the development
of the Sandakan Harbour Square;
(ix) assignment of all its present and future rights, interest
and benefits under the ICSD Ventures Sdn. Bhd.'s and Iringan Flora
Sdn. Bhd.'s Put Option Agreements and the proceeds from the Harbour
Mall Sandakan, Four Points by Sheraton Sandakan Hotel and Aloft
Kuala Lumpur Sentral Hotel;
(x) assignment over the disbursement account, revenue account,
operating account, sales proceed account, debt service reserve
account and sinking fund account of Silver Sparrow Berhad; revenue
account of ICSD Ventures Sdn. Bhd. and escrow account of Ireka Land
Sdn. Bhd.;
(xi) assignment of all ICSD Ventures Sdn. Bhd.'s and Iringan
Flora Sdn. Bhd.'s present and future rights, title, interest and
benefits in and under the insurance policies; and
(xii) a first legal charge over all the shares of the Silver
Sparrow Berhad, ICSD Ventures Sdn. Bhd. and Iringan Flora Sdn. Bhd.
and any dividends, distributions and entitlements.
11 Related Party Transactions
Transactions between the Group and the Company with Ireka
Corporation Berhad ("ICB") and its group of companies are
classified as related party transactions based on ICB's 23.07%
shareholding in the Company.
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
------------------------------------- ----------- ----------- -------------
Accounting and financial reporting
services fee charged by an ICB
subsidiary 27 27 53
Construction progress claims
charged by an ICB subsidiary 9,036 9,341 11,035
Management fees charged by an
ICB subsidiary 1,653 1,821 3,762
Marketing commission charged
by an ICB subsidiary 825 121 330
Project management fee for interior
fit out works charged by an ICB
subsidiary - 62 90
Project staff costs reimbursed
to an ICB subsidiary 397 309 682
Remuneration of key management
personnel
- Salaries 21 20 40
Sales and administration fee
charged by an ICB subsidiary - 51 50
Secretarial and administrative
services fee charged by an ICB
subsidiary 27 27 53
------------------------------------- ----------- ----------- -------------
Transactions between the Group with other significant related
parties are as follows:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
-------------------------------------- ----------- ----------- -------------
Non-controlling interests
Advances - non-interest bearing 486 370 1,081
Associate - Excellent Bonanza
Sdn. Bhd.
Advances - non-interest bearing (88) 239 630
Settlement of purchase consideration
of Aloft Kuala Lumpur Sentral
Hotel - - 63,867
-------------------------------------- ----------- ----------- -------------
The above transactions have been entered into in the normal
course of business and have been established under negotiated
terms.
The outstanding amounts due from/ (to) ICB and its group of
companies as at 30 June 2014, 30 June 2013 and 31 December 2013 are
as follows:
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
------------------------------------------- ---------- ---------- -------------
Amount due to an ICB subsidiary for
accounting and financial reporting
services fee 27 27 53
Amount due to an ICB subsidiary for
construction progress claims charged
net of LAD's recoverable of US$4,359,600
(30 June 2013:US$4,429,600; 31 December
2013: US$6,046,000) 523 3,701 965
Amount due to an ICB subsidiary for
management fees 280 3,097 2,343
Amount due to an ICB subsidiary for
project management fee for interior - 10 -
fit out works
Amount due to ICB subsidiary for
reimbursement of project staff costs 55 496 488
Amount due to an ICB subsidiary for
marketing commissions 725 54 151
Amount due to an ICB subsidiary for
sale and administration fee - 50 9
Amount due to an ICB subsidiary for
secretarial and administrative services
fee 27 53 80
------------------------------------------- ---------- ---------- -------------
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2014 2013 2013
US$'000 US$'000 US$'000
------------------------------------ ---------- ---------- -------------
Non-controlling interests
Advances - non-interest bearing (10,672) (10,177) (10,448)
Associate - Excellent Bonanza Sdn.
Bhd.
Advances - non-interest bearing 943 (557) 853
------------------------------------ ---------- ---------- -------------
12 Dividends
The Company has not paid or declared any dividends during the
financial period ended 30 June 2014.
13 Events after the Statement of Financial Position Date
There were no material adjusting events after the statement of
financial position date ended 30 June 2014 that have not been
reflected in the interim consolidated financial statements.
14 Interim Statement
Copies of this interim statement are available on the Company's
website www.aseanaproperties.com or from the Company's registered
office at 12 Castle Street, St. Helier, Jersey, JE2 3RT, Channel
Islands.
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and
internal control. The following have been identified previously as
the areas of principal risk and uncertainty facing the Company, and
they remain relevant in the second half of the year.
-- Economic
-- Strategic
-- Regulatory
-- Law and regulations
-- Tax regimes
-- Management and control
-- Operational
-- Financial
-- Going concern
For greater detail, please refer to page 18 of the Company's
Annual Report for 2013, a copy of which is available on the
Company's website www.aseanaproperties.com.
RESPONSIBILITY STATEMENT
The Directors of the Company confirm that to the best of their
knowledge that:
a) The condensed consolidated financial statements have been
prepared in accordance with IAS 34 (Interim Financial
Reporting);
b) The interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
c) The interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein).
On behalf of the Board
Mohammed Azlan Hashim Christopher Henry Lovell
Director Director
26 August 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEWFWMFLSEFA
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