Hiap Hoe (5JK) H2 2023 earnings summary

Executive summary

• FY 2023 returned to profitability: net profit S$5.5m versus a S$22.1m loss in FY 2022, despite lower revenue and higher finance costs.

• Revenue was S$111.9m; rental and leisure income grew, while hotel income fell amid a three-month closure for Singapore hotel refurbishment and rebranding.

• Priorities include strengthening recurring income, improving rental yields and occupancy, conserving liquidity, and pursuing acquisitions selectively.

Financial highlights

• Revenue fell to S$111.9m from S$119.4m; profit before tax was S$6.1m versus a S$23.6m loss in FY 2022.

• Net profit attributable to owners was S$5.6m versus a S$22.0m loss; basic and diluted EPS were 1.18 cents versus a 4.67-cent loss.

• Other income included a S$13.2m gain on disposal of two investment-property units; financial instruments recorded a S$26.4m fair-value gain versus a S$29.2m loss.

• Finance costs rose to S$37.3m from S$19.9m; operating cash flow was S$30.3m versus S$45.5m.

Outlook and guidance

• Hospitality growth is expected to remain dampened by weaker global financial confidence; improved rental yields and occupancy are expected to partly offset this pressure.

• High interest rates, inflation and global uncertainty may weigh on operations and investment portfolios; expenditure discipline and a healthy balance sheet remain priorities.

• The strategy is to strengthen recurring income, explore acquisitions and realise investments when timing is appropriate.