Hiap Hoe (5JK) H2 2024 earnings summary

Executive summary

• FY 2024 revenue rose 12% YoY to S$125.4m, supported by hotel operations, especially Aloft Singapore Novena; profit after tax increased to S$6.6m from S$5.5m.

• Recurring rental, leisure and hospitality income remained central to the portfolio; occupancy was strong across key Singapore and Australian assets.

• Portfolio actions included acquiring Great Eastern Motor Lodge and completing the Four Points by Sheraton Melbourne Docklands disposal; proceeds repaid borrowings and supported working capital.

Financial highlights

• Revenue was S$125.357m vs S$111.887m in FY 2023; profit before tax was S$17.201m vs S$6.080m, and profit after tax was S$6.561m vs S$5.516m.

• Other income of S$25.9m included an S$18.2m disposal gain on Four Points by Sheraton Melbourne Docklands; fair value gains in financial instruments were S$24.3m vs S$26.4m.

• Foreign exchange loss rose to S$6.6m from S$2.6m; other expenses of S$59.9m included a S$4.1m impairment on the 130 Stirling Street investment property.

• Operating cash flow was S$37.7m; investing activities generated S$24.6m, while financing activities used S$50.6m. Cash and cash equivalents ended the year at S$23.5m vs S$12.2m.

Outlook and guidance

• Priorities are to strengthen recurring income through improved rental yields and occupancy, conserve liquidity, maintain a stable balance sheet and pursue acquisitions when market conditions are favourable.

• Hospitality growth is expected to remain dampened by weakening global financial confidence; improved rental yields and occupancy in other sectors are expected to help mitigate this.

• Rising operating costs, global uncertainty and inflation prompt a prudent approach to non-essential capital expenditure and opportunistic acquisitions.