Heeton Holdings Limited’s turnover for FY2022 increased by 24.7% to $62.93 million from FY2021, which was attributed to the following significant items:
- increase in hotel operation income by $22.14 million due to the easing of COVID-19 around the world. As a result of the lifting of movement and travel restrictions, our hotels have experienced increases in room occupancies and rates and corresponding revenue across locations worldwide;
- increase in rental revenue of $0.81 million mainly due to higher occupancies; offset by decrease in sale revenue of $10.41 million from residential project, Onze@Tanjong Pagar as there was no sales recorded in FY2022. The project was 100% sold in 2021.
Financial Highlights
Cost of properties sold in FY2021 relates to residential project, Onze@Tanjong Pagar. Personnel expenses increased by $4.72 million to $18.74 million in FY2022 are in line with the gradual re-opening and ramp up of hotel operations.
Other operating expenses increased to $24.84 million in FY2022 from $19.18 million in FY2021 mainly due to increase in operating activities as a result of re-opening of our Group’s hotels. Profit from operations increased to $17.59 million in FY2022 from $10.36 million in FY2021 mainly due to increase in hotel operation income as a result of the lifting of movement and travel restriction.
Finance expenses comprised mainly interest on the bond and bank loans. It increased by $0.98 million to $18.71 million mainly due to higher bank loan interest in FY2022; offset by the reductions in interest as a result of the repayment of $66 million bond in July 2021.
The Group recorded reversal of impairment losses of $5.07 million on property, plant and equipment in FY2022 on properties held in the UK based on the current market conditions, and recorded impairment losses of $4.22 million and $8.23 million on other receivables and amount due from its associated companies in FY2022 and FY2021 respectively.
Share of results from associated companies/joint venture companies decreased by $6.65 million to $3.80 million in FY2022, mainly due to lower profit recognised for a development project after obtaining TOP; offset by higher profits recognised for some development projects.
Heeton recorded a net loss from fair value adjustment of investment properties of $2.85 million in FY2022 mainly from 62 Sembawang Road offset by fair value gains from Tampines Mart, while income tax expense increased by $1.59 million in FY2022 mainly due to higher taxable profits for the year.
Taking into account all the above factors, the Group recorded a net profit after tax of $4.40 million for FY2022, compared to a net profit after tax of $28.41 million recorded in FY2021.
Business Outlook
Management highlighted that although the pandemic that devastated world economies in the past three years is largely over, in its wake are global inflationary pressures, rising interest rates, exchange rate volatility and geopolitical risks have resulted in a challenging real estate investment environment.
On the local scene, the Singapore Government announced in Budget 2023 that the top marginal Buyer’s Stamp Duty (BSD) rate for residential and non-residential properties will be raised. This may dampen the rise of property prices and demand as well as increase future cost of acquisition for Heeton.
Heeton has sought to maintain a policy stance balanced between being conservative and pro-active, with a principal focus in Singapore remains real estate development, management and investment. Their two retail malls continue to perform to expectations, and they have also achieved more than 93% sales within the first month of launch of its Executive Condominium project, Tenet.
Amid the easing of cross-border travel restrictions and waning pandemic, Heeton remains cautiously optimistic over the prospects of the hospitality business, and will continue to seek accretive acquisitions when opportunities arise.
Heeton’s shares as of 20 February 2023 after market close was at S$0.270.
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About Heeton Holdings Limited
Established in 1976 and listed on Singapore Stock Exchange in September 2003, Heeton Holdings Limited is a real estate company focused on property development, investment and management, and hospitality.
