Message to Shareholders

Dear Shareholders,

The second half of FY2023 marked the soft opening of our first greenfield luxury hotel development in China and we are pleased to report that New World Chongqing Hotel is well on track to launch officially in the second quarter of FY2024.

Inspired by the lush greenery and waterscapes at Yuhu Lake in Chongqing’s Bishan District, the hotel is part of our first integrated project - Yuhu Singapore International Gardens - in the country.

Managed by New World® Hotels & Resorts, an upper-scale brand of Rosewood Hotel Group which has 16 hotels in China, Vietnam and the Philippines, the hotel has 200 wellappointed guestrooms and suites. Its stunning natural surrounds is the perfect setting for leisure, MICE events, banquets and celebrations while its luxurious spa, which has 20 outdoor hot tubs fed by the area’s natural springs, is equally outstanding.

Apart from being reputed nationally for being an ecologically liveable city, Bishan is also set to be the home of Chongqing’s second international airport when it is slated to open in 2026 – this will serve as a strategic conduit for our hotel business in the city.

Meanwhile, the construction of the first phase of Yuhu Singapore International Gardens’ residences was successfully completed during the year. The second and third phases will be activated at an appropriate time in the future.

Financial Highlights

In FY2023, the Group managed to further narrow its net loss attributable to shareholders by 40.0% to S$11.2 million on the back of an 81.9% rise in revenue to S$156.6 million.

This was boosted by sales contributions from the Group’s property businesses in China and Malaysia, namely Yuhu Singapore International Gardens and Coral Bay respectively. Our hospitality business in Malaysia also recovered robustly, thanks to the post-pandemic travel recovery which benefited our 3 hotels in Sabah and serviced suites in Kuala Lumpur.

As of 31 December 2023, the Group posted a loss per share (based on the weighted average of 1,960,381,000 shares) of 0.57 Singapore cent, which was an improvement of 40.0% year-onyear, while net asset value per ordinary share rose by 11.7% to 17.03 cents.

Our operations generated cash flow of S$31.8 million, which after adjusting for working capital changes, resulted in net cash outflow from operations of S$16.4 million. Our investments in property, plant and equipment at our Chongqing project led to a net cash outflow from investing activities of S$29.6 million while net proceeds from borrowings of S$38.9 million, offset by interest payment of S$29.0 million, amongst others, resulted in net cash inflow from financing activities of S$11.4 million.

Hospitality Business

The tourism recovery to Malaysia added a boost to our Hospitality business in FY2023. The high demand for hospitality products prompted us to fit out more than 100 units at Eaton Residences for short-term leases. Branded as Eaton Residences by Sutera@KLCC, these serviced suites comprised 1, 2, 3 and 4-bedroom units.

Revenue in this segment jumped 66.4% to S$53.5 million as our hotels in Kota Kinabalu and Eaton Residences by Sutera@KLCC consistently achieved optimal occupancy rates. This helped to turn the tide for this segment’s profitability, which registered a modest profit after tax of S$2.4 million.

Property Business

Thanks to the completion of the residential units in Yuhu Singapore International Gardens in the latter half of FY2023, coupled with the continued sales contributions from Coral Bay @ Sutera in Kota Kinabalu, our Property Business saw a 137.0% surge in revenue to S$97.6 million, thereby doubling the segment’s post-tax profit to S$14.6 million for the year.

On 1 June 2023, Coral Bay @ Sutera reached its first milestone in a toppingout ceremony which was officiated by the Sabah State’s Deputy Chief Minister II and Minister of Local Government and Housing, YB Datuk Dr. Joachim Gunsalam. The seafront development is on track for both physical completion and delivery of vacant possession by end 2024. As such, we expect to see more contributions and sales from Coral Bay @ Sutera in the quarters ahead.

Looking Ahead

The Group has a sizeable land bank which includes the remaining Phases 2 and 3 of Yuhu Singapore International Gardens in Chongqing and our future projects in Kuala Lumpur’s Petaling Street and The Point @ Sutera Harbour in Kota Kinabalu.

While the real estate market in China remains challenging, we are also seeing more interest from potential Chinese buyers of our Malaysia properties since the reopening of travel between the two countries.

Appreciation

We are deeply encouraged that the Group’s business has turned around more robustly and we hope that this positive momentum will continue in the quarters ahead.

While this turnaround is very encouraging, we would like to continue with our prudence stance in conserving working capital for our businesses. We look forward to enjoying the fruits of our labour with you in due course.

We are grateful for the hard work that our Board of Directors, Management and staff have put in during such challenging times. We would also like to thank our Lead Independent Director Mr Michael Gray for his invaluable contribution to the Board during his term. Mr Gray first joined us in October 2007 and will be retiring at the upcoming Annual General Meeting.

We would also like to take this opportunity to welcome Ms Tan Min-Li who joined the Board as Non-Executive Independent Director in July 2023.

It leaves us now to wish one and all a wonderful year ahead!

Dr Sam Goi Seng Hui
Executive Chairman

Gilbert Ee Guan Hui
Chief Executive Officer