Far East Consortium International Limited · HKEX:35
Far East Consortium International — FY2015 Earnings Presentation
50 slides from Far East Consortium International's earnings presentation, June 2015
Slide 1: Results Presentation Financial Year Ended 31 March 2015
Results Presentation Financial Year Ended 31 March 2015
Slide 2: Disclaimer
Disclaimer This document has been prepared by Far East Consortium International Limited (the “Company”) solely for information purposes. By accepting this document, you agree to maintain absolute confidentiality regarding the information disclosed in this document. This document does not constitute
Slide 3: Table of Contents
Table of Contents 1. Key Highlights 2. Results Summary 3. Review of Operations 4. Prospects 3
Slide 4: 1. Key Highlights
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Slide 5: Key Highlights: Underlying Businesses Continue to Grow
Key Highlights: Underlying Businesses Continue to Grow FY2015 FY2014 YoY change Revenue (HK$ M) 5,110 4,066 +25.7% Gross profit (HK$ M) 1,946 1,553 +25.3% Net profit attributable to shareholders (HK$ M) 957 914(1) +4.6% Net profit adjusted for FY2014 one time compulsory 957 655 +46.1% acquisition ga
Slide 6: Business Update
Business Update 5 new residential projects launched - The FIFTH, Melbourne (402 apartments) - Eivissa Crest, Hong Kong (106 apartments) - Dorsett Bukit Bintang, Kuala Lumpur (252 apartments) - King’s Manor, Shanghai (479 apartments, 90 town houses) - The Towers at Elizabeth Quay, Perth (400 apartm
Slide 7: Possible Privatisation of Dorsett Hospitality
Possible Privatisation of Dorsett Hospitality Announcement made on 27 May, 2015 to privatise Dorsett (2266.hk) with an offer to buy approximately 26% of Dorsett not already owned by FEC Cancellation consideration to be satisfied by (i) a cash consideration of HK$0.72; and (ii) 0.28125 FEC consid
Slide 8: 2. Results Summary
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Slide 9: Quality of Earnings Continue to Improve
Quality of Earnings Continue to Improve FY2015 FY2014 Growth HK$m HK$m Sales of properties 2,962 2,087(1) 41.9% Hotel operations and management 1,454 1,287 13.0% Car park operations and facilities management 616 613 0.5% Leasing and others 78 79 -1.3% Total revenue 5,110 4,066 25.7% Gross profit 1,9
Slide 10: GP Margin Analysis
GP Margin Analysis FY 2015 FY 2014 Gross profit Gross profit Gross profit Gross profit Revenue Revenue (before depreciation) (after depreciation) (before depreciation) (after depreciation) HK'M HK'M % HK'M % HK'M HK'M % HK'M % Sales of properties 2,962 1,086 36.7% 1,086 36.7% 2,087(1) 729(1) 34.9% 7
Slide 11: Dual Engine Strategy & Balanced Regional Portfolio
Dual Engine Strategy & Balanced Regional Portfolio By Geography By Business Dual Engine Strategy： Revenue Breakdown (FY2015) Malaysia United Leasing and Residential property development: High Singapore 6% Kingdom others 2% growth potential 1% 2% Car Park Operations 12% Hotel and Car Park and facil
Slide 12: Prudent Capital Management
Prudent Capital Management Dorsett FEC consolidated As at As at As at 31.3.2015 31.3.2015 31.3.2014 HK$ million HK$ million HK$ million Bank loans and bonds (1) Due within 1 year 1,339 3,821 2,846 Due 1-2 years 179 530 2,716 Due 2-5 years 3,731 5,167 3,917 Due more than 5 years 230 301 337 5,479 9,8
Slide 13: Prudent Capital Management (Cont'd)
Prudent Capital Management (Cont’d) As at 31.3.2015 HK$ million Investment securities 1,151 Bank and cash balances 2,336 Liquidity position 3,487 Construction development 2,200 Corporate use 1,300 Undrawn banking facilities 3,500 • Capital expenditures were funded by bank borrowings and internal res
Slide 14: Healthy Interest Coverage
Healthy Interest Coverage Financial year 2009 2010 2011 2012 2013 2014 2015 HK$m HK$m HK$m HK$m HK$m HK$m HK$m Profit before tax 222 493 555 718 1,024 1,246 1,328 Finance cost 126 110 186 166 168 281 224 Depreciation and amortisation 79 84 129 152 181 234 297 EBITDA 427 687 870 1,036 1,373 1,761 1,8
Slide 15: Strong NAV Backing
Strong NAV Backing As at 31.3.2015 HK$ million • Revaluation surplus of land for Equity attributable to shareholders 9,144 residential development was not factored in Add: Hotel revaluation surplus (adjusted for minority interest) 8,119 • Valuation of each of Group properties HK$10,976 million @ 73.
Slide 16: Proven Track Record
Proven Track Record Financial Year ended 31 March 2009 2010 2011 2012 2013 2014 2015 CAGR Revenue (HK$m) 1,733 2,342 1,654 1,761 3,732 4,066 5,110 19.8% Gross profit (HK$m) 728 799 756 848 1,027 1,553 1,946 17.8% Profit before tax (HK$m) 222 493 555 718 1,024 1,246 1,328 34.7% Profit after tax (HK$m
Slide 17: 3. Review of Operations: Property Development
3. Review of Operations Property Development 17
Slide 18: Summary of Project Presales/Pipeline
Summary of Project Presales/Pipeline Expected Cumulative Cumulative sellable floor Expected Expected presale as Launch Projects under presale Location presale Area balance GDV completion(1) % of GDV Time @31.3.2015 (HK$m) (sq. ft.) (HK$m) % 1 UWS stage 3 - Midtown Melbourne 688 167,000 688 FY 2016 1
Slide 19: Clear Visibility of Cashflow Stream
Clear Visibility of Cashflow Stream Expected completion in FY2016 Under presale Upper West Side Stage 3, Melbourne View Pavilion, Shanghai Eivissa Crest, Hong Kong 282 apartments 107 apartments 106 apartments 167,000 sq. ft. SFA 110,000 sq. ft. SFA 36,000 sq. ft. SFA 100% pre-sold 40% pre-sold 77% p
Slide 20: Clear Visibility of Cashflow Stream
Clear Visibility of Cashflow Stream Expected completion in FY2017* Under presale Upper West Side Stage 4, Melbourne King’s Manor, Shanghai Dorsett Bukit Bintang, Kuala Lumpur 641 apartments 479 apartments and 90 townhouses 252 apartments 388,000 sq. ft. SFA 712,000 sq. ft. SFA 215,000 sq. ft. SFA 10
Slide 21: Mid Term Pipeline is Robust
Mid Term Pipeline is Robust Expected completion in FY2018 and thereafter Under presale The Towers at Elizabeth Quay, Perth The Fifth, Melbourne 400 apartments, 402 apartments 320,000 sq. ft. SFA 284,000 sq. ft. SFA 63% registered pre-sold* 84% pre-sold Expected completion in FY2019 Expected completi
Slide 22: Mid Term Pipeline is Robust
Mid Term Pipeline is Robust Expected completion in FY2018 and thereafter (Cont’d) West Side Place, Melbourne Tai Wai, Hong Kong Sham Shui Po, Hong Kong Site acquisition completed in Apr 2014 Residential 33,000 sq.ft. SFA & Commercial 28,000 sq.ft., SFA ~2,500 residential apartments and likely to 5,8
Slide 23: West Side Place – Melbourne
West Side Place – Melbourne 23
Slide 24: Land Bank
Land Bank Gross Floor Area Land Bank Location (sq.ft.) (1) Fong Lok Wai Hong Kong 410,000 (2) California Garden - remaining Shanghai 3,800,000 Gangtonyuan Guangzhou 500,000 New Times Plaza Guangzhou 230,000 4,940,000 (1) FEC has a 25.33% stake. Gross floor area indicated is the portion attributable
Slide 25: Growth in Rental / Investment Properties
Growth in Rental / Investment Properties GFA GFA Current Investment Properties (sq.ft.) Pipeline Investment Properties (sq.ft.) FEC Building, Central, Hong Kong (O) 16,000 UWS Stage 3-4, Melbourne (R) 15,000 FEC Building, Nathan Road, Hong Kong (O) 38,000 250 Spencer Street, Melbourne (R) 84,000 Bas
Slide 26: 3. Review of Operations: Hotel operations and management
3. Review of Operations Hotel operations and management 26
Slide 27: Hotel Recurring EBITDA Continues to Rise
Hotel Recurring EBITDA Continues to Rise Twelve months ended 31 March 2015 2014 HK$'000 HK$'000 Growth Reported revenue 1,454,027 1,785,850 Sales of apartment in Singapore - (498,392) Dividend / interest from securities and financial (21,823) (17,024) products investment Recurring revenue 1,432,204
Slide 28: Growing Recurring Cash Flow Streams
Growing Recurring Cash Flow Streams Hotel Operating Statistics For the year • During FY2015, 2 hotels commenced 31.3.2015 31.3.2014 operations, namely Lushan Resort, Hong Kong Mainland China and Dorsett Occupancy rate (i) 92.7% 93.9% (i) Shepherds Bush, London Average room rate (HK$) 856 942 RevPAR
Slide 29: Substantial Development Profit Not on Balance Sheet
Substantial Development Profit Not on Balance Sheet Revaluation City Description Rooms Capital Value Book Value Surplus (HK$m) (HK$m) (HK$m) Hotels in operation Hong Kong 1 Cosmopolitan Hotel, Hong Kong Hong Kong Near Wanchai and Causeway Bay 454 2,623 359 2,264 2 Silka West Hong Kong, Hong Kong Hon
Slide 30: Consistent Delivery of Room Growth
Consistent Delivery of Room Growth 8,000 7,393 6,723 Currently Owns 20 Hotels with 5 Hotels in Pipeline 7,000 6,043 6,043 Number of hotel rooms is expected to grow by 22% over the next 3 years based on the existing pipeline 6,000 5,429 No. of Rooms 4,894 No. of Owned and No. of rooms in the Current
Slide 31: FEC Level Hotel Development Pipeline
FEC Level Hotel Development Pipeline (1) (1) Hotel Projects Under Development Location Total no. of rooms Alpha Square London ~300 Ritz Carlton Hotel Melborune 240 Ritz Carlton Hotel Perth >200 Sri Jati Service Apartment Kuala Lumpur >150 Total >800 (1) The hotel names and the number of rooms may su
Slide 32: New Hotels Opened Recently
New Hotels Opened Recently Lushan Resort Dorsett Shepherd’s Bush • Midscale 4-star resort in Jiujiang • 8-storey hotel with 317 Guest Rooms • 297 Guest Rooms • Retain the building’s historic facade, boasts modern architecture and design • 1 hour drive to Nanchang and 30-minute drive from Jiujiang Lu
Slide 33: New Hotels Opened Recently (Cont'd)
New Hotels Opened Recently (Cont’d) Dorsett Shepherd’s Bush 33
Slide 34: 3. Review of Operations: Car park operations and facilities management
3. Review of Operations Car park operations and facilities management 34
Slide 35: Steady Contribution from Car Park Business – Care Park
Steady Contribution from Car Park Business – Care Park • Continue to generate steady recurring income • In FY2015, 30 car parks and approx. 12,000 car parking bays added to portfolio • Gross profit contribution increased by 12.4% (assuming constant exchange rate) Car Park Revenue HK$ million As at 3
Slide 36: Car Park Business – Care Park (Cont'd)
Car Park Business – Care Park (Cont’d) Advanced Technology Our Clients 36
Slide 37: Facilities Management Services - APM
Facilities Management Services - APM • Asset light business model • Expanded operation to include property management services in Australia (mainly in Brisbane, Melbourne and Adelaide) and Johor Babru, Malaysia • Facilities management expected to grow steadily • As at 31 March 2015, the Group has 35
Slide 38: 4. Prospects
4. Prospects Copyright Destination Brisbane Consortium 2074 - Images for concept purposes
Slide 39: Market Outlook
Market Outlook Expected to remain buoyant due to the low interest rate environment and potential further interest rate cuts in the coming Australia months, which will help affordability of Australian real estates among buyers The Central Government has been making an endeavour to facilitate the
Slide 40: Company Outlook
Company Outlook • Maintain its regionalization strategy and continue to diversify its earnings stream to achieve sustainable growth • Presales at HK$6.5bn as at 31.3.2015 • Clear visibility of revenue stream: Pipeline development projects amounted to ~HK$35bn • Liquidity at HK$3.5bn and low net gear
Slide 41: Queen's Wharf Brisbane Consortium Project – Potential Future Growth Driver
Queen’s Wharf Brisbane Consortium Project – Potential Future Growth Driver • Consortium to jointly develop proposal for the development of Queen’s Wharf Brisbane site, Australia. Plan to include an integrated resort with a casino • > 2,000 Residential Apartments: FEC and Chow Tai Fook Enterprises Li
Slide 42: Queen's Wharf Brisbane Consortium Project – Potential Future Growth Driver
Queen’s Wharf Brisbane Consortium Project – Potential Future Growth Driver Our proposal includes： • The iconic signature “Arc” building • Five new premium hotel brands, three 6-star venues, including Ritz-Carlton and Rosewood • 50 restaurants and bars • Dozens of unique attractions, including a spec
Slide 43: Thank You
Thank You Questions & Answers
Slide 44: Appendix I: Diversified and Balanced Portfolio
Appendix I: Diversified and Balanced Portfolio 44
Slide 45: Appendix II: Business Overview
Appendix II: Business Overview “Double Engine” strategy provide stable growth “Dual Engine” strategy Strong recurring income business Built-to-sell business Hotel Operations & Management (Dorsett Hospitality International Limited 2266-HK ) Car Park Operations & Property Investment Property Developme
Slide 46: Appendix III: Shareholder Structure
Appendix III: Shareholder Structure Tan Sri Dato’ David Chiu Institutional and Public and his family Investors 58.33% 41.67% Far East Consortium (35.HK) 73.97% 76.05% Car Park and facilities Property Development Dorsett (2266.HK) management Note: As at 24th June 2015 46
Slide 47: Appendix IV: Company Milestone
Appendix IV: Company Milestone Milestone 2015: Acquired Shum Shui Po residential project Announced privatisation of Dorsett 2010-Present 2014: FEC's property development division expanded to London and acquired its first residential development site at Canary Wharf Double Engine FEC entered the Pert
Slide 48: Appendix V: Australia Residential Property Market Data
Appendix V: Australia Residential Property Market Data Australian Median House Prices ($A’ 000) SYD: Sydney MEL: Melbourne BR: Brisbane ADE: Adelaide PER: Perth Source: RP Data 48
Slide 49: Appendix V: Hong Kong Residential Property Market Data
Appendix V: Hong Kong Residential Property Market Data Private Residential Property Price Level 300 250 200 150 100 Price indices Price indices base year : 1999 Source: Rating and Valuation Department, HKSAR 49
Slide 50: Appendix V: Shanghai Residential Property Market Data
Appendix V: Shanghai Residential Property Market Data Average selling price of residential properties 30000 25000 20000 15000 2010 2011 2012 2013 2014 ASP (RMB/sq.m.) Source: CRIC 50
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