TIDMASPL
RNS Number : 3768X
Aseana Properties Limited
28 August 2015
28 August 2015
Aseana Properties Limited
("Aseana" or the "Company")
Half-Year Results for the Six Months Ended 30 June 2015
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 2015.
Operational highlights:
-- On 22 June 2015, Aseana Properties Limited ("Aseana" or
the "Company") announced that at the Extraordinary General
Meeting ("June EGM") and the Annual General Meeting ("AGM"),
shareholders have supported the Board's recommendations
to approve the continuation of Aseana for the next three
years to June 2018, to adopt a new divestment/ investment
policy to realise its assets in an orderly manner and to
make capital distributions of not less than US$20.0 million
in 2015 based on current cash balances and expected receivables
from realised assets. On 27 August 2015, Aseana held a further
Extraordinary General Meeting ("August EGM"), at which shareholders
approved amendments to the memorandum and articles of association
of the Company and its share capital structure to facilitate
a return of capital to shareholders.
-- Sale of properties at SENI Mont' Kiara stood at approximately
96.0% to date. A further 2.5% is reserved with deposit paid.
-- The RuMa Hotel and Residences ("The RuMa") achieved approximately
49.0% sales based on sales and purchase agreement signed.
-- The Aloft Kuala Lumpur Sentral Hotel ("Aloft") is the Gold
Winner of FIABCI World Prix d'Excellence Awards 2015 in
the hotel category. Aloft achieved occupancy of 75.6% for
the six-month period ended 30 June 2015.
-- Four Points by Sheraton Sandakan Hotel ("FPSS") recorded
an occupancy rate of 36.1% for the six-month period ended
30 June 2015.
-- Successfully realised VND76.5 billion (US$3.5 million) of
its investment in Nam Long Investment Corporation ("Nam
Long"), through placement of 3.8 million Nam Long shares.
Following the block disposal and subsequent entry of a new
investor into Nam Long in July 2015, Aseana's effective
stake in Nam Long has been reduced from 11.6% to 8.3%.
Financial highlights:
-- Unaudited revenue of US$16.9 million for the six-month period
ended 30 June 2015 (30 June 2014 (unaudited): US$31.5 million)
-- Unaudited loss before tax for the six-month period ended
30 June 2015 of US$5.1 million (30 June 2014 (unaudited):
loss of US$4.8 million)
-- Unaudited loss after tax for the six-month period ended
30 June 2015 of US$6.6 million (30 June 2014 (unaudited):
loss of US$7.7 million)
-- Unaudited consolidated comprehensive loss of US$14.1 million
for the six months period ended 30 June 2015 (30 June 2014
(unaudited): loss of US$6.7 million)
-- Unaudited net asset value of US$148.2 million at 30 June
2015 (31 December 2014 (audited): US$160.5 million) or US$0.699
per share* (31 December 2014 (audited): US$0.757 per share)
-- Unaudited realisable net asset value of US$229.7 million
at 30 June 2015 (31 December 2014 (unaudited): US$247.7
million) or US$1.084 per share* (31 December 2014 (unaudited):
US$1.168 per share)
* NAV per share and RNAV per share as at 30 June 2015 are
calculated based on 212,025,000 voting shares (31 December 2014:
212,025,000 voting shares).
Commenting on the results, Mohammed Azlan Hashim, Chairman of
Aseana, said:
"The H1 2015 results are reflective of the challenging market
conditions in both Malaysia and Vietnam, in particular Malaysia
which is currently experiencing a much softer property market due
to current economic conditions and the weakening Malaysian Ringgit.
The Company will continue to pursue an opportunistic yet cautious
approach in managing and maximising the realisation value of all
its assets."
The Group has also published its Quarterly Investment Update
(including updates on projects and RNAV figures) for the period to
30 June 2015, 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 / Liz Yong (Corporate Email: liz.yong@n1singer.com
Finance)
Sam Greatrex (Sales)
Tavistock 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 2015.
In recent months, the global economy has been rocked by a
startling string of events such as the dramatic decline in oil
prices, strengthening of the United States Dollar ("US Dollar" or
"US$"), the uncertainty in Europe which is amplified by the
meltdown of the Greek economy, the slowdown in China and also the
much anticipated shift in US monetary policy. Risks remain tilted
to the downside, with some pre-existing risks receding but new ones
emerging. Despite a strong growth in the early part of the year,
the continuous slide in crude oil prices, subdued external demands
and the effect of the new tax regime have dampened the Malaysian
economy. In addition, the Malaysian Ringgit ("RM") sunk to its
seventeen-year low against the US Dollar in August as a result of
external factors, particularly the prospects that the United
States's monetary policy could be normalised, as well as concerns
over the political instability and the state of Malaysia's public
finances.
In Vietnam, the economy is continuing its path to recovery and
Vietnam is regaining its high growth momentum despite more
difficult global economic situation. Vietnam's Gross Domestic
Product ("GDP") grew 6.3% during the first half of 2015, surpassing
the growth during the same period last year. In a move to maintain
Vietnam's exports and to sustain growth relative to other South
East Asian economies, the State Bank of Vietnam ("SBV") had in May
2015, devalued the Vietnamese Dong ("VND") against the US Dollar by
1.0% to VND21,673 for the second time during the year following the
first devaluation in January 2015. Vietnam's total Foreign Direct
Investment ("FDI") disbursement reached US$6.3 billion in the first
half of 2015, an increase of 9.6% year-on-year.
Results
For the six months ended 30 June 2015, the Group recorded
unaudited revenue of US$16.9 million (H1 2014 (unaudited): US$31.5
million), which was mainly attributable to the sale of completed
units in SENI Mont' Kiara. 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$5.1 million (H1 2014 (unaudited): loss of US$4.8 million),
predominantly due to operating losses and financing costs of City
International Hospital of US$5.1 million and of Four Points by
Sheraton Sandakan Hotel and Harbour Mall Sandakan totaling US$2.5
million. These are offset by profit from SENI Mont' Kiara of US$3.7
million.
.
The Group's unaudited loss after tax for the six-months ended 30
June 2015 stood at US$6.6 million (30 June 2014 (unaudited): loss
of US$7.7 million). The Group's unaudited consolidated
comprehensive loss for the period of US$14.1 million (30 June 2014
(unaudited): loss of US$6.7 million) has included a foreign
currency translation loss of US$8.1 million (30 June 2014
(unaudited): gain of US$1.0 million) which was attributable to the
weakening of the Malaysian Ringgit against the US Dollar by 7.9%
and an increase in fair value of the share of investment in Nam
Long of US$0.6 million.
Unaudited net asset value for the Group for the period under
review decreased to US$148.2 million (31 December 2014 (audited):
US$160.5 million) due to losses incurred for the period. This is
equivalent to US$0.699 per share (31 December 2014 (audited):
US$0.757 per share).
Unaudited realisable net asset value for the Group has also
decreased to US$229.7 million as at 30 June 2015 (31 December 2014
(unaudited): US$247.7 million) in line with the drop in net asset
value for the Group coupled with the weakening of the Malaysian
Ringgit against the US Dollar. This is equivalent to US$1.084 per
share (31 December 2014 (unaudited): US$1.168 per share).
Review of Activities and Property Portfolio
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Sales status (based on Sales and Purchase agreements
signed):
Projects % sales as
% sales as at
at December
31 July 2015 2014
-------------------------------- -------------- -----------
Tiffani by i-ZEN 99% 99%
SENI Mont' Kiara
* Proceeds received 95% 91%
* Pending completion 1% 2%
The RuMa Hotel and Residences 49% 47%
-------------------------------- -------------- -----------
Malaysia
On the whole, the lackluster market condition coupled with the
political uncertainty in Malaysia have affected the sales
performance of both SENI Mont' Kiara and The RuMa. SENI Mont' Kiara
recorded approximately 96.0% sales to date, based on sales and
purchase agreements signed.
Meanwhile, sales at The RuMa, the only project currently under
development, remained at approximately 49.0% to date. The Manager
is broadening its marketing focus to overseas markets such as
Taiwan, Singapore, Japan and the Middle Eastern countries where
there has been favourable response to prime properties in Malaysia
on the back of a weaker Malaysian Ringgit. Construction of the main
building is underway with completion expected in Q3 2017.
Having been recently awarded the Gold Winner of FIABCI World
Prix d'Excellence Awards 2015 in the hotel category, the 482-room
Aloft hotel is continuing its commendable results by achieving an
occupancy rate of 75.6% for the six-month period up to 30 June
2015.
The business environment and tourism industry in Sabah remain
subdued as a result of a number of unfortunate events last year,
compounded by the most recent kidnapping incident in Sandakan. This
has resulted in countries such as the United States of America,
United Kingdom, Canada, Australia and New Zealand maintaining
adverse travel advisory notices to the coastal areas of eastern
Sabah, including Sandakan. Subsequent to the incident, the national
security forces have intensified surveillance and control around
the harbour front area where The Harbour Mall Sandakan ("HMS") and
FPSS are both located. To date, HMS is 59.2% tenanted, while FPSS
achieved an occupancy rate of 36.1% for the six-month period up to
30 June 2015.
Following the approval of the proposals at the June EGM and AGM,
which included continuation of Aseana for the next three years to
June 2018 and adoption of a new divestment investment policy to
orderly realise its assets, Aseana will continue its efforts to
dispose the remaining units at SENI Mont' Kiara and to increase the
sale of The RuMa. The Company will also focus on improving the
performance of the operating assets in preparation for their
eventual sale in line with the Company's new divestment policy.
Vietnam
As at 31 July 2015, City International Hospital ("CIH") had
registered 2,384 in-patient days (31 July 2014: 1,429), equivalent
to a daily average of 11 in-patient days (31 July 2014: 7), with
average revenue per in-patient day of US$526.8 (31 July 2014:
US$450.5). Outpatient visits as at 31 July 2015 had reached 10,232
visits (31 July 2014: 4,913), equivalent to an average of 65
outpatients daily (31 July 2014: 31), which generated average
revenue per visit of US$101.6 (31 July 2014: US$110.6). The
operation of the Hospital is still going through a period of
stabilisation and the Manager is working closely with Parkway
Pantai Limited to improve the performance of the hospital through
numerous marketing campaigns, introduction of new service lines and
targeted sales.
To date, Aseana has successfully realised VND76.5 billion
(US$3.5 million) of its investment in Nam Long Investment
Corporation ("Nam Long"), through the placement of 3.8 million
shares of Nam Long. Following the block disposal and entry of a new
investor into Nam Long, Aseana's effective stake in Nam Long has
been reduced from 11.6% to 8.3%. The disposal reflects the
Company's on-going effort to strategically reduce its holding in
Nam Long at the appropriate time and price, and to optimize its
investment portfolio. At the date of this publication, Nam Long
shares closed at VND19,500 per share, improving from VND19,000 per
share as at 30 June 2015.
MOHAMMED AZLAN HASHIM
Chairman
27 August 2015
DEVELOPMENT MANAGER'S REVIEW
Malaysia Economic Update
The Malaysian economy registered a Gross Domestic Product growth
("GDP") of 4.9% in the second quarter of 2015 and expanded 5.3% in
in the first half of 2015. The outlook reflects the overall
strength of Malaysia's domestic economy amid ongoing fiscal
consolidation, weak global trade and lower commodity prices. The
introduction of the Goods and Services Tax ("GST") in April 2015
and the elimination of fuel subsidies have helped Malaysia weather
the oil price shock. However, the domestic headwinds that grappled
the country during the first six months of the year are expected to
creep into the second half, with the weakening of the Ringgit, the
controversies surrounding the debt-laden strategic investment fund
as well as the uncertain political situation in the country. The
Malaysian Ringgit plunged to a seventeen-year low in August 2015
and is currently the worst performing currency in Asia. Further to
that, the Malaysian foreign exchange reserves fell to a five-year
low of US$100.5 billion in July 2015.
In tandem with the uncertainties surrounding the country's
economic and political situation, both the Business Conditions
Index ("BCI") and Consumer Sentiment Index ("CSI") issued by the
Malaysian Institute of Economic Research ("MIER") exhibited a
declining trend in the second quarter of 2015. The BCI fell to 95.4
points (Q1 2015: 101.0 points) on the back of a gloomy outlook for
domestic and export orders, coupled with a dip in utilization rate
in the manufacturing industry. Meanwhile, the CSI tumbled further
to 71.7 points (Q1 2015: 72.6 points) as a result of subdued
employment and financial outlook which affected consumers' spending
power.
Notwithstanding the above, both Fitch Ratings and Standard &
Poor's Ratings Services have recently affirmed Malaysia's foreign
currency Issuer Default Rating ("IDR") at "A-" and local currency
IDR at "A". In addition, Standard & Poor's has maintained
Malaysia's outlook at "Stable", whilst Fitch Ratings has revised
its outlook on Malaysia from "Negative" to "Stable". These positive
ratings reflect Malaysia's strong external position and
considerable monetary flexibility notwithstanding the current
economic headwinds and increase in Malaysia's contingent sovereign
liabilities.
On the back of moderate global growth, the central bank of
Malaysia had in July 2015 maintained the Overnight Policy Rate
("OPR") at 3.25%, of which is supportive of the country's economy
activity. However, risks to global growth and financial conditions
have risen and the bank has cited that the latest indicators
pointed to a more moderate second quarter gross domestic product
growth for Malaysia.
Overview of Property Market in Klang Valley, Malaysia
Offices
-- Five new office buildings were completed in Q2 2015, increasing
the total supply of office space in the Klang Valley to
108.1 million sq.ft. Overall occupancy rate remained stable
at 81% (Q1 2015: 81%).
-- Market rentals and prices remained stable while rental yield
remained between 5.5% and 8%.
-- En-bloc transactions during the quarter: (i) Menara Raja
Laut (Secondary A 27 storeys) was sold at a price of RM553
psf (US$147 psf); (ii) Wisma Amanah Raya (Secondary A 15
storeys) was transacted at RM507 psf (US$134 psf).
-- Occupancy rate is expected to remain stable in short term,
with new supply of 4.42 million sq.ft. by end 2015. However
the economy uncertainties, weakening currency and softening
foreign investment sentiment are expected to have negative
pressure on occupancy and rental rates.
Retail
-- Market prices and market rentals for retail centres in Klang
Valley were generally stable in Q2 2015.
-- Average occupancy rate in Klang Valley remained stable at
82.0% in Q2 2015 (Q1 2015: 82.0%).
-- Five new retail centres were completed during Q2 2015.
Residential
-- Twenty four projects with 7,583 units of condominium in
Klang Valley were completed in Q2 2015.
-- Eighteen projects with 6,202 units were launched in Q2 2015.
-- Market prices and market rental rates for condominiums were
generally stable in Q2 2015. However, the market continues
to see a slowdown in sales especially in the higher end
properties.
-- Selected new launches: (i) The Robertson - South Tower (Level
33 - 42) (121 units), launched in March 2015 with an average
price of RM1,400 psf (US$371 psf) achieved 40% take-up rate;
(ii) Damai Residence (31 units), launched in April 2015
with an average price of RM1,000 psf (US$265 psf) is 30%
sold.
Hospitality
-- In Q2 2015, average daily room rate for hotels comparable
to Aloft Kuala Lumpur Sentral (inclusive of Aloft) decreased
y-o-y by 4.9% to RM347 per room per night.
-- Average occupancy rate for hotels comparable to Aloft (inclusive
of Aloft) dropped by 5% to 69% in Q2 2015 compared to the
same period in 2014.
-- 6.48 million tourists visited Malaysia in Q1 2015, representing
a decrease of 8.6% compared to same period in 2014.
--- -----------------------------------------------------------------
Source: Bank Negara Malaysia website, Jones Lang Wootton Q2
report, MIER, various publications
Exchange rate - 30 June 2015: US$1:RM3.7736
Vietnam Economic Update
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Strong economic activity in 2015 has set the stage for
acceleration in Vietnam's GDP growth. Vietnam's GDP in the second
quarter of 2015 reached a five-year high, hitting 6.4%. The result
brought Vietnam's GDP growth for the first half of 2015 to 6.3%,
much higher than the same period five years ago. The World Bank has
recently revised Vietnam's 2015 GDP growth forecast upwards by 0.4%
to 6% on the back of continued strong performance in the
manufacturing sector, exports and foreign investment. Recovery in
domestic demand and foreign direct investment ("FDI") inflows that
continue to support investments and exports are benefitting the
country's economy.
In an effort to boost the slowing exports, the State Bank of
Vietnam ("SBV") has devalued the Vietnamese Dong, twice so far this
year, most recently in May. As a result, the increased interbank
exchange rates have put significant impacts on the prices of a
number of imported commodities and materials which further led to
an increase in the prices of various domestic products. Inflation
remains under control, with the Consumer Price Index ("CPI")
increasing just 0.9% year-on-year. As a result of the low
inflation, the SBV is expected to maintain its monetary policy
which is likely to remain accommodative to spur growth.
Attracting FDI has always been a key part of Vietnam's external
economic affairs. Equipped with one of the most dynamic economies,
young and low cost labour force together with a government
committed to creating a fair and attractive business environment,
Vietnam is seen to be the perfect destination for foreign
investors. According to the Ministry of Planning and Investment
("MPI"), Vietnam attracted US$5.5 billion in FDI in the first six
months of the year, down 19.8% year-on-year. However, disbursed FDI
increased by 9.6% year-on-year to US$6.3 billion. The
implementation of the new Housing Law and the Real Estate Business
Law from 1 July 2015 onwards is expected to be significant and will
play a pivotal role in opening up the Vietnam real estate market to
overseas investment.
Vietnam has also experienced a slump in its trade activities as
evidenced by an increase it its trade deficit of US$3.8 billion
during the first half of the year. The expanding trade deficit is a
result of lower world commodity prices coupled with its economy's
dependency on imported machinery and raw materials. Concerns over
the stability of the Vietnamese Dong as a result of the increasing
trade deficit along with the tendencies of investment capital
withdrawals from developing economies will trigger stabilisation
efforts from the Vietnamese government. Meanwhile, Vietnam's credit
growth was at 6.3%, the highest compared to the same period for the
last three years. The robust credit growth is an outcome of strong
growth in the manufacturing sector, loosening of credit packages
that allowed banks to lend more freely and the encouraging results
seen in Vietnam's overall economic recovery.
Falling foreign tourist arrivals to Vietnam after the anti-China
protests in 2014 have prompted the Vietnamese government into
action to take measures to boost the long neglected tourism sector.
The number of foreign tourists visiting Vietnam has decreased by
11.3% year-on-year for the first six months of 2015. In July 2015,
authorities dropped visa requirements for tourists from five
European countries - France, Germany, the United Kingdom, Spain and
Italy. The visa-free policy is expected to lure back European
tourists to Vietnam on the back of weaker Euro against the US
Dollar.
Overview of Property Market in Vietnam
Offices
-- One Grade C office building was completed in Q2 2015, increasing
the total supply to 1.47mil sqm by 3% y-o-y and stable q-o-q.
-- Overall occupancy rate improved by 2% q-o-q and y-o-y to
93%.
-- Average rental rates remained stable in Q2 2015 at US$25
psm per month.
-- Total office take-up area increased by 6% q-o-q largely
contributed by the take-up of Grade C office building areas.
Retail
-- Retail stock increased by 5% q-o-q due to the opening of
two shopping centres (Vivo City mall, district 7 and Take
Plaza 2, district 3) and one supermarket (within Vivo City
Mall, district 7).
-- Average rental rate in Q2 2015 decreased by 1% q-o-q to
US$60 psm per month, while average occupancy remained stable
at 92%.
Residential
-- Eleven new apartment projects and new phases of eight existing
apartment projects were launched in Q2 2015. Total stock
increased by 9% q-o-q and 27% y-o-y.
-- Overall apartments' absorption rate stood at 19%, a decrease
of 2% q-o-q but up by 2% y-o-y. Transaction volume was registered
at approx. 5,000 units, highest since Q4 2010.
-- One villa and townhouse mixed project (91 units), one townhouse
project (258 units) and two villa projects (121 units),
were launched in Q2 2015, increasing the supply of villa/townhouse
by 3% q-o-q and 216% y-o-y. Two new projects with sixty
two land plots were launched in Q2 2015. Primary land plot
supply decreased by 43% q-o-q and 33% y-o-y.
-- Villa/townhouse market's absorption rates increased by 3%
q-o-q while the absorption rate for land plot improved by
6% q-o-q.
Hospitality
-- Six new 3-star hotels with 469 rooms were opened, one 5-star
hotel which started operation in Q1 2015 opened an additional
218 rooms and one 3-star hotel has reopened with 71 rooms
in Q2 2015. However, one hotel closed 20 rooms for internal
use. Overall, the hotel stock was up by 6% q-o-q and 10%
y-o-y.
-- Average occupancy rate was at 64%, decreased by 6% q-o-q
but up by 3% y-o-y in Q2 2015, while average room rate decreased
by 5% q-o-q and 3% y-o-y at US$78 per room per night. The
decline in average room rate is mainly due to tougher competition
from new entries and increasing supply of 3-star hotels.
-- Fourteen units of serviced apartments were completed in
Q2 2015. Average occupancy rate increased by 3% q-o-q and
y-o-y at 85%.
--- --------------------------------------------------------------------
Source: General Statistics Office of Vietnam, Savills, CBRE,
various publications
Exchange rate - 30 June 2015: US$1:VND21,810
LAI VOON HON
President / Chief Executive Officer
Ireka Development Management Sdn. Bhd.
Development Manager
27 August 2015
PROPERTY PORTFOLIO AS AT 30 JUNE 2015
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
------------------------------ ----------------------- ----------- -------- ----------- ------------------------
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
------------------------------ ----------------------- ----------- -------- ----------- ------------------------
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 72.3% 48,000 25,000 2013
------------------------------ ----------------------- ----------- -------- ----------- ------------------------
Project under development
---------------------------------------------------------------------------------------------------------------------
The RuMa Hotel and Luxury residential
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Residences Kuala Lumpur, tower and boutique Third quarter of
Malaysia hotel 70.0% 40,000 4,000 2017
------------------------------ ----------------------- ----------- -------- ----------- ------------------------
Listed equity investment
---------------------------------------------------------------------------------------------------------------------
Listed equity investment Listed equity 10.1% n/a n/a n/a
in Nam Long Investment investment
Corporation,
an established developer
in Ho Chi Minh City,
Vietnam
------------------------------ ----------------------- ----------- -------- ----------- ------------------------
Undeveloped 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 Healthcare and residential
Park, development
Ho Chi Minh City, with healthcare
Vietnam theme 72.3% 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
------------------------------ ----------------------- ----------- -------- ----------- ------------------------
n/a: Not available / not applicable
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
SIX MONTHS ENDED 30 JUNE 2015
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Continuing activities Notes US$'000 US$'000 US$'000
---------------------------------------------- ------ ----------- ----------- ----------------
Revenue 16,891 31,494 85,102
Cost of sales 5 (12,723) (24,953) (51,821)
---------------------------------------------- ------ ----------- ----------- ----------------
Gross profit 4,168 6,541 33,281
Other income 14,140 13,349 27,369
Administrative expenses (874) (366) (1,193)
Foreign exchange gain/(loss) 6 547 (9) 716
Management fees (1,598) (1,653) (3,344)
Marketing expenses (140) (591) (823)
Other operating expenses (15,947) (16,265) (32,715)
---------------------------------------------- ------ ----------- ----------- ----------------
Operating profit 296 1,006 23,291
----------- ----------- ----------------
Finance income 194 227 577
Finance costs (5,565) (5,760) (13,760)
----------- ----------- ----------------
Net finance costs (5,371) (5,533) (13,183)
Gain on disposal of investment
in an associate - - 5,641
Share of loss of equity-accounted
associate, net of tax - (229) (335)
---------------------------------------------- ------ ----------- ----------- ----------------
Net (loss)/profit before taxation (5,075) (4,756) 15,414
Taxation 7 (1,542) (2,906) (9,387)
---------------------------------------------- ------ ----------- ----------- ----------------
(Loss)/profit for the period/year (6,617) (7,662) 6,027
---------------------------------------------- ------ ----------- ----------- ----------------
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 (8,086) 977 (7,388)
Increase in fair value of available-for-sale
investments 626 26 125
---------------------------------------------- ------ ----------- ----------- ----------------
Total other comprehensive
(expense)/income for the period/year (7,460) 1,003 (7,263)
------
Total comprehensive
loss for the period/year (14,077) (6,659) (1,236)
------
(Loss)/profit attributable to:
Equity holders of the parent (4,428) (5,198) 9,091
Non-controlling interests (2,189) (2,464) (3,064)
---------------------------------------------- ------ ----------- ----------- ----------------
Total (6,617) (7,662) 6,027
---------------------------------------------- ------ ----------- ----------- ----------------
Total comprehensive
loss attributable to:
Equity holders of the parent (11,492) (3,939) 2,074
Non-controlling interests (2,585) (2,720) (3,310)
---------------------------------------------- ------ ----------- ----------- ----------------
Total (14,077) (6,659) (1,236)
---------------------------------------------- ------ ----------- ----------- ----------------
(Loss)/earnings per share
Basic and diluted (US cents) 8 (2.09) (2.45) 4.29
---------------------------------------------- ------ ----------- ----------- ----------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Unaudited Unaudited Audited
-------------------------------- ------
As at As at As at
30 June 30 June 31 December
2015 2014 2014
Notes US$'000 US$'000 US$'000
-------------------------------- ------ ---------- ------------ -------------
Non-current assets
Property, plant and equipment 944 1,091 1,018
Investment in an associate - 2,023 -
Available-for-sale investments 11,834 12,723 12,822
Intangible assets 8,668 13,208 8,798
Deferred tax assets 1,652 682 1,683
-------------------------------- ------ ---------- ------------ -------------
Total non-current assets 23,098 29,727 24,321
-------------------------------- ------ ---------- ------------ -------------
Current assets
Inventories 356,001 416,597 381,778
Held-for-trading financial
instrument 55 388 4,041
Trade and other receivables 8,832 13,446 8,359
Prepayment 444 1,205 337
Amount due from an associate - 943 -
Current tax assets 900 127 513
Cash and cash equivalents 25,775 26,911 26,011
-------------------------------- ------ ---------- ------------ -------------
Total current assets 392,007 459,617 421,039
-------------------------------- ------ ---------- ------------ -------------
TOTAL ASSETS 415,105 489,344 445,360
-------------------------------- ------ ---------- ------------ -------------
Equity
Share capital 10,601 10,601 10,601
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Share premium 218,926 218,926 218,926
Capital redemption reserve 1,899 1,899 1,899
Translation reserve (17,937) (1,872) (10,247)
Fair value reserve 877 152 251
Accumulated losses (66,159) (75,074) (60,932)
-------------------------------- ------ ---------- ------------ -------------
Shareholders' equity 148,207 154,632 160,498
Non-controlling interests 9,158 9,271 10,187
-------------------------------- ------ ---------- ------------ -------------
Total equity 157,365 163,903 170,685
-------------------------------- ------ ---------- ------------ -------------
Non-current liabilities
Amount due to non-controlling
interests 1,155 1,085 1,120
Loans and borrowings 9 55,536 68,972 53,364
Medium term notes 10 10,369 143,333 84,993
-------------------------------- ------ ---------- ------------ -------------
Total non-current liabilities 67,060 213,390 139,477
-------------------------------- ------ ---------- ------------ -------------
Current liabilities
Trade and other payables 38,990 79,474 40,510
Amount due to non-controlling
interests 10,490 9,587 10,222
Loans and borrowings 9 14,412 6,934 19,274
Medium term notes 10 124,285 14,013 60,237
Current tax liabilities 2,503 2,043 4,955
-------------------------------- ------ ---------- ------------ -------------
Total current liabilities 190,680 112,051 135,198
-------------------------------- ------ ---------- ------------ -------------
Total liabilities 257,740 325,441 274,675
-------------------------------- ------ ---------- ------------ -------------
TOTAL EQUITY AND LIABILITIES 415,105 489,344 445,360
-------------------------------- ------ ---------- ------------ -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2015 - 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
2015 10,601 218,926 1,899 (10,247) 251 (60,932) 160,498 10,187 170,685
Changes in
ownership
interests
in subsidiaries - - - - - (799) (799) 799 -
Non-controlling
interests
contribution - - - - - - - 757 757
Loss for the
period - - - - - (4,428) (4,428) (2,189) (6,617)
Total other
comprehensive
expense - - - (7,690) 626 - (7,064) (396) (7,460)
--------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Total
comprehensive
loss - - - (7,690) 626 (4,428) (11,492) (2,585) (14,077)
----------------- --------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Shareholders'
equity at
30 June 2015 10,601 218,926 1,899 (17,937) 877 (66,159) 148,207 9,158 157,365
================= ========= ========= ============ ============ ========= ============ ============= ============= =========
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$'000
----------------- --------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
At 1 January
2014 10,601 218,926 1,899 (3,105) 126 (69,876) 158,571 11,429 170,000
Non-controlling
interests
contribution - - - - - - - 562 562
Loss for the
period - - - - - (5,198) (5,198) (2,464) (7,662)
Total other
comprehensive
income - - - 1,233 26 - 1,259 (256) 1,003
--------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Total
comprehensive
loss - - - 1,233 26 (5,198) (3,939) (2,720) (6,659)
----------------- --------- --------- ------------ ------------ --------- ------------ ------------- ------------- ---------
Shareholders'
equity at
30 June 2014 10,601 218,926 1,899 (1,872) 152 (75,074) 154,632 9,271 163,903
================= ========= ========= ============ ============ ========= ============ ============= ============= =========
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014 - AUDITED
Total
Equity
Attributable
to Equity
Capital Fair Holders Non-
Share Share Redemption Translation Value Accumulated of the Controlling Total
Capital Premium Reserve Reserve Reserve Losses Parent Interests Equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
----------------- --------- ---------- ------------ ------------- -------- ------------- ------------- ------------- ----------
1 January
2014 10,601 218,926 1,899 (3,105) 126 (69,876) 158,571 11,429 170,000
Changes
in ownership
interests
in subsidiaries - - - - - (147) (147) 147 -
Non-controlling
interests
contribution - - - - - - - 1,921 1,921
--------- ---------- ------------ ------------- -------- ------------- ------------- ------------- ----------
Profit of
the year - - - - - 9,091 9,091 (3,064) 6,027
Total other
comprehensive
expense - - - (7,142) 125 - (7,017) (246) (7,263)
--------- ---------- ------------ ------------- -------- ------------- ------------- ------------- ----------
Total
comprehensive
loss - - - (7,142) 125 9,091 2,074 (3,310) (1,236)
Shareholders'
equity at
31 December
2014 10,601 218,926 1,899 (10,247) 251 (60,932) 160,498 10,187 170,685
================= ========= ========== ============ ============= ======== ============= ============= ============= ==========
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CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED 30 JUNE 2015
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
----------------------------------------------- ----------- ----------- -----------------------
Cash Flows from Operating Activities
Net (loss)/ profit before taxation (5,075) (4,756) 15,414
Finance income (194) (227) (577)
Finance costs 5,565 5,760 13,760
Unrealised foreign exchange (gain)/
loss (718) 1 (291)
Impairment of goodwill 129 317 4,727
Depreciation of property, plant
and equipment 53 59 122
Gain on disposal of available-for-sale
investments (214) - -
Gain on disposal of investment in
an associate - - (5,641)
Gain on disposal of property, plant
and equipment - - (3)
Share of loss of equity-accounted
associate, net of
tax - 229 335
Fair value loss/(gain) on amount
due to non-
controlling interests 35 - (320)
Fair value loss/(gain) on held-for-trading
financial instrument - (1) (39)
----------------------------------------------- ----------- ----------- -----------------------
Operating (loss)/profit before changes
in working capital (419) 1,382 27,487
Changes in working capital:
Decrease in inventories 4,983 16,711 29,437
(Increase)/ decrease in trade and
other
receivables and prepayment (1,054) (4,597) 647
Decrease in trade and other payables (220) (5,497) (40,615)
----------------------------------------------- ----------- ----------- -----------------------
Cash generated from operations 3,290 7,999 16,956
Interest paid (5,565) (5,760) (13,760)
Tax paid (4,253) (2,197) (6,679)
----------------------------------------------- ----------- ----------- -----------------------
Net cash (used in)/generated from
operating activities (6,528) 42 (3,483)
----------------------------------------------- ----------- ----------- -----------------------
Cash Flows From Investing Activities
(Advances to)/ repayment from associate - (88) 853
Proceeds from disposal of available-for-sale
investments 1,827 - -
Proceeds from disposal of investment
in an
associate - - 5,306
Proceeds from disposal of property,
plant and
equipment - - 12
Disposal of/(purchase of) held-for-trading
financial instrument 3,689 - (3,651)
Purchase of property, plant and
equipment - (13) (20)
Finance income received 194 227 577
----------------------------------------------- ----------- ----------- -----------------------
Net cash generated from investing
activities 5,710 126 3,077
----------------------------------------------- ----------- ----------- -----------------------
CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D)
SIX MONTHS ENDED 30 JUNE 2015
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
--------------------------------------------- -------------- ----------- -------------
Cash Flows From Financing Activities
Advances from non-controlling interests 772 486 1,635
Issuance of ordinary shares of subsidiaries
to non-controlling interests 757 562 1,921
Repayment of loans and borrowings (9,773) (6,212) (16,858)
Drawdown of loans and borrowings 10,121 7,075 17,108
Decrease/(increase) in pledged deposits
placed in licensed banks 411 (30) -
--------------------------------------------- -------------- ----------- -------------
Net cash generated from financing
activities 2,288 1,881 3,806
--------------------------------------------- -------------- ----------- -------------
Net changes in cash and cash equivalents
during the period/year 1,470 2,049 3,400
Effect of changes in exchange rates (621) 247 (1,355)
Cash and cash equivalents at the
beginning of the period/year 16,211 14,166 14,166
--------------------------------------------- -------------- ----------- -------------
Cash and cash equivalents at the
end of the period/year 17,060 16,462 16,211
--------------------------------------------- -------------- ----------- -------------
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 11,975 8,125 12,057
Short term bank deposits 13,800 18,786 13,954
--------------------------------------------- -------------- ----------- -------------
25,775 26,911 26,011
Less: Deposits pledged ( 8,715) (10,449) (9,800)
--------------------------------------------- -------------- ----------- -------------
Cash and cash equivalents 17,060 16,462 16,211
--------------------------------------------- -------------- ----------- -------------
During the financial period/year, US$757,000 (30 June 2014:
US$562,000; 31 December 2014: US$1,921,000) of ordinary shares of
subsidiaries were issued to non-controlling shareholders, which was
satisfied via cash consideration.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 30 JUNE 2015
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 2015 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 2014 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.
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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 2014 as
described in those annual financial statements.
The interim report and financial statements were approved by the
Board of Directors on 27 August 2015.
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. The 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;
(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;
(vi) Urban DNA Sdn. Bhd.- develops The RuMa Hotel and
Residences; and
(vii) Hoa Lam-Shangri-La Healthcare Group - master developer of
International Healthcare Park;
owns and operates City International Hospital.
Other non-reportable segments comprise the Group's other
development projects. None of these segments meets any of the
quantitative thresholds for determining reportable segments in 2015
and 2014.
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 in
Malaysia and Vietnam.
Operating Segments - ended 30 June 2015 - Unaudited
Ireka ICSD Iringan Urban Hoa
Investment Land Ventures Amatir Flora DNA Lam-Shangri-La
Holding Sdn. Sdn. Resources Sdn. Sdn. Healthcare
Companies Bhd. Bhd. Sdn. Bhd. Bhd. Bhd. Group Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------- ------------ -------- ---------- ----------- --------- --------- --------------- ---------
Segment
(loss)/profit
before
taxation (415) (224) (2,499) 3,717 519 (569) (5,570) (5,041)
=============== ============ ======== ========== =========== ========= ========= =============== =========
Included in
the measure
of segment
(loss)/profit
are:
Revenue - - - 16,891 - - - 16,891
Revenue from
hotel
operations - - 1,851 - 9,089 - - 10,940
Revenue from
mall
operations - - 588 - - - - 588
Revenue from
hospital
operations - - - - - - 1,894 1,894
Cost of
acquisition
written -
down # - - - (2,388) - - - (2,388)
Impairment of
goodwill - - - (129) - - - (129)
Marketing
expenses - - - (21) - (119) - (140)
Expenses from
hotel
operations - - (2,238) - (6,246) - - (8,484)
Expenses from
mall
operations - - (776) - - - - (776)
Expenses from
hospital
operations - - - - - - (5,433) (5,433)
Depreciation
of property,
plant and
equipment - - (4) - (4) - (45) (53)
Finance costs - - (1,924) - (2,213) - (1,428) (5,565)
Finance income 10 1 142 17 2 4 18 194
=============== ============ ======== ========== =========== ========= ========= =============== =========
Segment assets 21,589 5,032 94,535 28,957 71,207 59,260 98,725 379,305
Included in
the measure
of segment
assets are:
Addition to
non-current
assets other
than
financial
instruments
and deferred
tax assets - - - - - - - -
=============== ============ ======== ========== =========== ========= ========= =============== =========
# Cost of acquisition relates to the fair value adjustment in relation to the inventories upon
the acquisition of certain subsidiaries of the Group. The cost of acquisition written down is
charged to profit or loss as part of cost of sales upon the sales of these inventories.
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Profit or loss US$'000
------------------------------------ --------
Total loss for reportable segments (5,041)
Other non-reportable segments (34)
Consolidated loss before taxation (5,075)
==================================== ========
Operating Segments - ended 30 June 2014 - Unaudited
Hoa
Investment Ireka ICSD Amatir Iringan Urban Lam-Shangri-La
Holding Land Ventures Resources Flora DNA Healthcare
Companies Sdn. Sdn. Sdn. Bhd. Sdn. Sdn. Group Total
Bhd. Bhd. Bhd. Bhd.
US$'000 US$'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) (742) (5,418) (4,674)
=============== ============ ========== ========== =========== ========== ========== =============== =========
Included in
the measure
of segment
(loss)/profit
are:
Revenue - 4,069 - 27,425 - - - 31,494
Revenue from
hotel
operations - - 2,056 - 9,184 - - 11,240
Revenue from
mall
operations - - 547 - - - - 547
Revenue from
hospital
operations - - - - - - 814 814
Cost of
acquisition
written - - -
down # - (110) - (5,844) - - - (5,954)
Impairment of -
goodwill - - - (317) - - - (317)
Marketing
expenses - - - (226) - (365) - (591)
Expenses from
hotel
operations - - (2,374) - (6,843) - - (9,217)
Expenses from
mall
operations - - (871) - - - - (871)
Expenses from
hospital
operations - - - - - - (4,753) (4,753)
Depreciation
of property,
plant and
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equipment - - (5) - (4) - (48) (57)
Finance costs - - (2,130) - (2,469) - (1,161) (5,760)
Finance income 2 7 152 34 12 3 17 227
=============== ============ ========== ========== =========== ========== ========== =============== =========
Segment assets 16,911 4,687 107,704 67,744 81,327 53,675 117,201 449,249
Included in the measure
of segment assets
are:
Addition to non-current
assets other than
financial instruments
and deferred tax assets - - 12 - - 1 - 13
========================== ======= ====== ======== ======= ======= ======= ======== ========
# Cost of acquisition relates to the fair value adjustment in
relation to the inventories upon the acquisition of certain
subsidiaries of the Group. The cost of acquisition written down is
charged to profit or loss as part of cost of sales upon the sales
of these inventories.
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Profit or loss US$'000
------------------------------------ --------
Total loss for reportable segments (4,674)
Other non-reportable segments (80)
Depreciation (2)
Consolidated loss before taxation (4,756)
==================================== ========
Operating Segments - ended 31 December 2014 - Audited
Hoa
Investment Ireka ICSD Amatir Iringan Urban Lam-Shangri-La
Holding Land Ventures Resources Flora DNA Healthcare
Companies Sdn. Sdn. Sdn. Bhd. Sdn. Sdn. Group Total
Bhd. Bhd. Bhd. Bhd.
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------- ------------ ---------- ---------- ----------- ---------- ---------- --------------- ---------
Segment
profit/(loss)
before
taxation 3,100 99 (5,436) 16,607 569 (1,474) 1,366 14,831
=============== ============ ========== ========== =========== ========== ========== =============== =========
Included in
the measure
of segment
profit/(loss)
are:
Revenue - 4,839 - 50,923 - - 29,340 85,102
Revenue from
hotel
operations - - 4,323 - 18,171 - - 22,494
Revenue from
mall
operations - - 1,027 - - - - 1,027
Revenue from
hospital
operations - - - - - - 2,525 2,525
Cost of
acquisition
written
down # - (150) - (8,329) - - - (8,479)
Impairment of
goodwill - - - (451) - - (4,276) (4,727)
Marketing
expenses - - - (266) - (557) - (823)
Expenses from
hotel
operations - - (4,507) - (12,499) - - (17,006)
Expenses from
mall
operations - - (1,789) - - - - (1,789)
Expenses from
hospital
operations - - - - - - (9,702) (9,702)
Depreciation
of property,
plant and
equipment - - (10) - (9) - (99) (118)
Finance costs - - (4,328) - (4,906) - (4,526) (13,760)
Finance income 24 11 312 115 20 14 81 577
--------------- ------------ ---------- ---------- ----------- ---------- ---------- --------------- ---------
Segment assets 19,471 5,150 100,570 45,938 76,447 58,587 101,643 407,806
Included in the measure
of segment assets
are:
Addition to non-current
assets other than
financial instruments
and deferred tax assets - - - - - 1 19 20
========================== ======= ====== ======== ======= ======= ======= ======== ========
# Cost of acquisition relates to the fair value adjustment in
relation to the inventories upon the acquisition of certain
subsidiaries of the Group. The cost of acquisition written down is
charged to profit or loss as part of cost of sales upon the sales
of these inventories.
Reconciliation of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Profit or loss US$'000
-------------------------------------- --------
Total profit for reportable segments 14,831
Other non-reportable segments 587
Depreciation (4)
Consolidated profit before taxation 15,414
====================================== ========
30 June 2015 - Unaudited Addition to
US$'000 non-current
Revenue Depreciation Finance costs Finance income Segment assets assets
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Total reportable segment 16,891 (53) (5,565) 194 379,305 -
Other non-reportable
segments - - - - 35,800 -
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Consolidated total 16,891 (53) (5,565) 194 415,105 -
========================== ======== ============= ============== =============== =============== =============
30 June 2014 - Unaudited Addition to
US$'000 non-current
Revenue Depreciation Finance costs Finance income Segment assets assets
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Total reportable segment 31,494 (57) (5,760) 227 449,249 13
Other non-reportable
segments - (2) - - 40,095 -
-------------------------- -------- ------------- -------------- --------------- --------------- -------------
Consolidated total 31,494 (59) (5,760) 227 489,344 13
========================== ======== ============= ============== =============== =============== =============
31 December 2014 - Audited Addition to
US$'000 non-current
Revenue Depreciation Finance costs Finance income Segment assets assets
---------------------------- -------- ------------- -------------- --------------- --------------- -------------
Total reportable segment 85,102 (118) (13,760) 577 407,806 20
Other non-reportable
segments - (4) - - 37,554 -
---------------------------- -------- ------------- -------------- --------------- --------------- -------------
Consolidated total 85,102 (122) (13,760) 577 445,360 20
============================ ======== ============= ============== =============== =============== =============
Geographical Information - ended 30 June 2015 - Unaudited
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
-------------------- --------- -------- -------------
Revenue 16,891 - 16,891
Non-current assets 3,932 19,166 23,098
==================== ========= ======== =============
For the financial period ended 30 June 2015, no single customer
exceeded 10% of the Group's total revenue.
Geographical Information - ended 30 June 2014 - Unaudited
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
-------------------- --------- -------- -------------
Revenue 31,494 - 31,494
Non-current assets 5,288 24,439 29,727
==================== ========= ======== =============
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For the financial period ended 30 June 2014, no single customer
exceeded 10% of the Group's total revenue.
Geographical Information - ended 31 December 2014 - Audited
Malaysia Vietnam Consolidated
US$'000 US$'000 US$'000
-------------------- ---------- -------- -------------
Revenue 55,762 29,340 85,102
Non-current assets 4,104 20,217 24,321
==================== ========== ======== =============
For the year ended 31 December 2014, one customer exceeded 10%
of the Group's total revenue as follows:
US$'000 Segments
---------------------- ------------------- -------------------
Hoa Lam-Shangri-La
AEON Vietnam Co. Ltd. 22,991 Healthcare Group
====================== =================== ===================
4 Seasonality
The Group's business operations have not been materially
affected by seasonal factors for the period under review.
5 Cost of Sales
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
------------------------------------ ----------- ----------- -------------
Direct costs attributable:
Completed units 12,594 24,636 36,856
Land held for property development - - 10,238
Impairment of intangible assets 129 317 4,727
------------------------------------ ----------- ----------- -------------
12,723 24,953 51,821
------------------------------------ ----------- ----------- -------------
6 Foreign exchange GAIN/(loss)
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
----------------------------------- ----------- ----------- ---------------
Foreign exchange gain/(loss)
comprises:
Realised foreign exchange (loss)/
gain (171) (8) 425
Unrealised foreign exchange
gain/ (loss) 718 (1) 291
547 (9) 716
----------------------------------- ----------- ----------- ---------------
7 Taxation
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
--------------------------------------- ----------- ----------- --------------
Current tax expense 1,637 2,980 10,587
Deferred tax credit (95) (74) (1,200)
--------------------------------------- ----------- ----------- --------------
Total tax expense for the period/year 1,542 2,906 9,387
--------------------------------------- ----------- ----------- --------------
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
2015 2014 2014
US$'000 US$'000 US$'000
--------------------------------------- ----------- ----------- -------------
Net (loss)/profit before taxation (5,075) (4,756) 15,414
--------------------------------------- ----------- ----------- -------------
Income tax at a rate of 25% (1,269) (1,189) 3,853
Add :
Tax effect of expenses not deductible
in determining taxable profit 1,241 1,596 2,063
Movement of unrecognised deferred
tax benefits 1,284 1,673 2,621
Tax effect of different tax rates
in subsidiaries 1,025 1,027 1,784
Less :
Tax effect of income not taxable
in determining taxable profit (499) (201) (1,415)
Under provision in respect of prior
period/year (240) - 481
--------------------------------------- ----------- ----------- -------------
Total tax expense for the period/year 1,542 2,906 9,387
--------------------------------------- ----------- ----------- -------------
The applicable corporate tax rate in Malaysia is 25%.
The Company is treated as a tax resident of Jersey for the
purpose of Jersey tax laws and is subject to a tax rate of 0%.
The applicable corporate tax rates in Singapore and Vietnam are
17% and 22% respectively.
A subsidiary of the Group, Hoa Lam-Shangri-La Healthcare Ltd
Liability Co is granted preferential corporate tax rate of 10% for
the results of the hospital operations. The preferential income tax
is given by the government of Vietnam due to the subsidiary's
involvement in the healthcare and education industries.
A Goods and Services Tax was introduced in Jersey in May 2008.
The Company has been registered as an International Services Entity
so 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)/Earnings Per Share
Basic and diluted (loss)/earnings per ordinary share
The calculation of basic and diluted (loss)/earnings per
ordinary share for the period/year ended was based on the
(loss)/profit 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
2015 2014 2014
US$'000 US$'000 US$'000
----------------------------------- ------------------- ----------- -------------
(Loss)/earnings attributable
to equity holders of the parent (4,428) (5,198) 9,091
Weighted average number of shares 212,025 212,025 212,025
(Loss)/earnings per share
Basic and diluted (US cents) (2.09) (2.45) 4.29
----------------------------------- ------------------- ----------- -------------
9 Loans and Borrowings
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
--------------------------- ---------- ---------- -------------
Non-current
Bank loans 55,518 68,936 53,338
Finance lease liabilities 18 36 26
---------------------------- ---------- ---------- -------------
55,536 68,972 53,364
--------------------------- ---------- ---------- -------------
Current
Bank loans 14,400 6,920 19,262
Finance lease liabilities 12 14 12
---------------------------- ---------- ---------- -------------
14,412 6,934 19,274
--------------------------- ---------- ---------- -------------
69,948 75,906 72,638
--------------------------- ---------- ---------- -------------
(MORE TO FOLLOW) Dow Jones Newswires
August 28, 2015 02:01 ET (06:01 GMT)
The effective interest rates on the bank loans and finance lease
arrangement for the period ranged from 5.25% to 12.50% (30 June
204: 5.25% to 14.90%; 31 December 2014: 5.25% to 17.70%) per annum
and 2.50% to 3.50% (30 June 2014: 2.50%; 31 December 2014: 2.50% to
3.50%) per annum respectively.
Borrowings are denominated in Malaysian Ringgit, United States
Dollars and Vietnamese Dong.
Bank loans are repayable by monthly, quarterly or semi-annually
instalments.
Bank loans are secured by land held for property development,
work-in-progress, operating assets of the Group, pledged deposits
and some by the corporate guarantee of the Company.
Finance lease liabilities are payable as follows:
Present value
of minimum
Future minimum lease payment
lease payment Interest 30 June
30 June 30 June 2015
Unaudited 2015 US$'000 2015 US$'000 US$'000
---------------------------- --------------- -------------- ---------------
Within one year 14 2 12
Between one and five years 21 3 18
---------------------------- --------------- -------------- ---------------
35 5 30
---------------------------- --------------- -------------- ---------------
Present value
of minimum
Future minimum lease payment
lease payment Interest 30 June
30 June 30 June 2014
Unaudited 2014 US$'000 2014 US$'000 US$'000
---------------------------- --------------- -------------- ---------------
Within one year 16 2 14
Between one and five years 42 6 36
---------------------------- --------------- -------------- ---------------
58 8 50
---------------------------- --------------- -------------- ---------------
Present value
of minimum
Future minimum Interest lease payment
lease payment 31 December 31 December
31 December 2014 2014
Audited 2014 US$'000 US$'000 US$'000
---------------------------- --------------- ------------- ---------------
Within one year 15 3 12
Between one and five years 30 4 26
---------------------------- --------------- ------------- ---------------
45 7 38
---------------------------- --------------- ------------- ---------------
10 Medium Term Notes
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2015 2014 2014
US$'000 US$'000 US$'000
----------------------------------- ---------- ---------- ------------
Outstanding medium term notes 136,210 160,060 147,004
Net transaction costs (1,556) (2,714) (1,774)
Less:
Repayment due within twelve
months (124,285) (14,013) (60,237)
----------------------------------- ---------- ---------- ------------
Repayment due after twelve months 10,369 143,333 84,993
----------------------------------- ---------- ---------- ------------
The medium term notes ("MTN") were issued pursuant to a
programme with a tenure of ten (10) years from the first issue date
of the notes. The 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$64.93 million (RM245.00
million) was drawn down in 2011 for Sandakan Harbour Square.
US$3.97 million (RM15.00 million) was drawn down in 2012 for Aloft
Kuala Lumpur Sentral Hotel and the remaining US$67.31 million
(RM254 million) in 2013. The Group secured a rollover of MTN
amounting US$11.93 million (RM45 million) which was due for
repayment on 8 December 2014 to be repaid on 8 December 2017. No
repayments were made in the current financial period.
The weighted average interest rate of the MTN was 5.56% per
annum at the statement of financial position date. The effective
interest rates of the MTN and their outstanding amounts are as
follows:
Interest rate
Maturity Dates % per annum US$'000
------------------------- ------------------ -------------- ----------
Series 1 Tranche FG 8 December
003 2017 5.90 6,625
Series 1 Tranche BG 8 December
003 2017 5.85 5,300
Series 1 Tranche FG 8 December
002 2015 5.46 11,925
Series 1 Tranche BG 8 December
002 2015 5.41 7,950
Series 2 Tranche FG 8 December
001 2015 5.46 18,550
Series 2 Tranche BG 8 December
001 2015 5.41 14,575
Series 3 Tranche FG001 1 October 2015 5.40 2,650
Series 3 Tranche BG001 1 October 2015 5.35 1,325
29 January
Series 3 Tranche FG002 2016 5.50 3,975
29 January
Series 3 Tranche BG002 2016 5.45 2,650
Series 3 Tranche FG003 8 April 2016 5.65 34,185
Series 3 Tranche BG003 8 April 2016 5.58 26,500
------------------------- ------------------ -------------- ----------
136,210
-------------------------------------------- -------------- ----------
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 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.
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