Aspial Corporation (A30) H1 2023 earnings summary

Executive summary

• 1H 2023 revenue rose 12.3% YoY to S$283.2m, but the period recorded a S$13.5m pre-tax loss versus S$7.5m profit in 1H 2022, mainly reflecting a larger real estate loss.

• Net loss was S$12.2m; loss attributable to owners was S$15.0m and basic and diluted EPS was (0.69) cents.

• Excluding S$6.4m foreign exchange loss and a S$2.2m non-recurring bulk-sale loss, the 1H 2023 pre-tax loss would have been S$4.9m.

Financial highlights

• Revenue increased to S$283.2m from S$252.1m; materials and subcontract costs rose 20% YoY to S$185.8m, mainly on higher revenue across segments.

• Finance costs increased 48% YoY to S$27.3m, primarily due to higher borrowing rates; other operating expenses rose 28% to S$41.4m, including higher marketing costs, FX loss and property-disposal loss.

• Other income fell 47% YoY to S$3.2m, as 1H 2022 had higher fair value gains on investment properties, derivatives and securities.

• Operating cash flow was an outflow of S$2.6m versus an inflow of S$2.9m in 1H 2022; investing cash flow was an inflow of S$3.6m and financing cash flow an outflow of S$14.5m.

• Cash and cash equivalents declined to S$37.9m at 30 June 2023 from S$51.5m at 31 December 2022; S$2.6m was pledged and excluded from cash equivalents.

Outlook and guidance

• 2H 2023 outlook remained uncertain amid global uncertainty, high inflation, elevated interest rates and volatile currencies; priorities include new opportunities, resource optimisation and operational efficiency.

• Retail was expected to perform reasonably well in 2H, supported by pre-GST-hike and year-end festive buying; Malaysia pawnbroking was expected to contribute positively to FY 2023 results.

• Real estate performance excluding FX and revaluation gains or losses was expected to improve in 2H through better apartment margins, higher hotel revenue and lower interest expense.

• Hospitality assets had higher sales, occupancy and profitability in 1H; improvement was expected to continue as business and leisure travel recovered.

• No current-period dividend was declared; cash was to be retained for working capital, debt reduction and potential growth opportunities.