IPC (AZA) H2 2023 earnings summary

Executive summary

• FY2023 sales rose to S$3.166m from S$1.490m; gross profit returned to S$0.581m, and net loss narrowed to S$0.631m from S$7.537m.

• Performance improved on Zhuhai hotel and property sales, plus a S$3.829m fair-value gain on the NHJC convertible preference share investment.

• Japan hospitality demand strengthened after border reopening, while China’s economic and property-market headwinds continued to weigh on the outlook.

Financial highlights

• Sales were S$3.166m in FY2023 versus S$1.490m in FY2022; cost of sales was S$2.585m versus S$2.452m.

• Gross profit was S$0.581m, reversing a S$0.962m gross loss; net loss was S$0.631m versus S$7.537m.

• Other gains were S$2.092m versus losses of S$2.647m, including a S$3.829m FVPL gain on NHJC preference shares.

• Cash and cash equivalents were S$0.787m at year-end versus S$1.629m; borrowings declined to S$3.686m from S$4.981m.

• Total comprehensive loss was S$2.242m versus S$12.844m in FY2022.

Outlook and guidance

• Optimistic on NHJC’s 2024 outlook, barring negative surprises, supported by Japan’s strong FY2023 foreign-tourist recovery and a weak JPY.

• Cautiously managing expectations and operating costs at Grand nest HOTEL Zhuhai amid China’s economic uncertainty.

• Priorities include monetizing some China assets, improving cash resources and seeking removal from the SGX watch list.