Far East Consortium International Limited · HKEX:35
Far East Consortium International — 1H FY2021 Earnings Presentation
47 slides from Far East Consortium International's earnings presentation, November 2020
Slide 1: 2020/21 Interim Results
2020/21 Interim Results November 2020 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by Far East Consortium International Limited (the “Company”) solely for information purposes. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to purchase or subscrib
Slide 3: Table of Contents
Table of Contents 1. FY2021 Interim Results Summary 2. Review of Operations 3. Prospects 4. Appendices 3
Slide 4: 1. FY2021 Interim Results Summary
1. FY2021 Interim Results Summary Concept of Queen’s Wharf Brisbane 4
Slide 5: Key Takeaways of 1H FY2021
Key Takeaways of 1H FY2021 Remained profitable despite COVID-19 • Diversification: Geographically and business segments • Proactive steps: aggressively cut costs and repositioned certain hotels • Monetized retail: Sold the retail components of Artra, Singapore and Astoria Crest, Hong Kong and signed
Slide 6: Medium Term Outlook Is Supported By Strong Development Pipeline and New Initiatives
Medium Term Outlook Is Supported By Strong Development Pipeline and New Initiatives Delivery Schedule of Property Developments: Total expected attr. GDV: HK$12.2 bn Total expected Total expected attr. GDV: Total expected attr. GDV: Total expected attr. GDV: attr. GDV: HK$6.1 bn HK$5.2 bn HK$3.8 bn H
Slide 7: Business Highlights and Recent Developments
Business Highlights and Recent Developments Crystalise Hidden Value of Retail Assets Wuhan New Lease Sale of Sale of • Signed an 18-year lease contract for retail component of retail component of Artra(1) the Wuhan shopping mall Astoria Crest • Yearly rental was doubled to Proceeds: SGD55.2 mn Proce
Slide 8: Profitability Maintained Despite Global Economic Headwinds
Profitability Maintained Despite Global Economic Headwinds HK$ mn 1H FY2021 1H FY2020 % change Revenue 3,111 5,121 -39.2% Gross profit 988 1,647 -40.0% Profit before tax 831 983 -15.5% Net profit attributable to shareholders 350 715 -51.1% Total comprehensive income attributable to 1,879 59 +3,094.4
Slide 9: Overall GP Margins Remained Healthy Despite Global Macro Events
Overall GP Margins Remained Healthy Despite Global Macro Events 1H FY2021 1H FY2020 Gross profit Gross profit Gross profit Gross profit Revenue Revenue (after depreciation) (before depreciation) (after depreciation) (before depreciation) HK$ mn HK$ mn Margin HK$ mn Margin HK$ mn HK$ mn Margin HK$ mn
Slide 10: Strong Recovery of Foreign Exchange Rates Added to Our NAV Growth
Strong Recovery of Foreign Exchange Rates Added to Our NAV Growth • The rebound in all currencies against the Hong Kong dollar had a positive effect on the value of our net assets and our adjusted equity • Trend post period end remained positive for the Group Rates as at 30.9.2020 31.3.2020 Change A
Slide 11: Balanced and Diversified Portfolio Helped Reduce Risks
Balanced and Diversified Portfolio Helped Reduce Risks Quality assets: Total Assets by Geography(1) Geographies Continental Europe, 2% United Kingdom, 7% • HK$55.2 bn of attributable GDV of projects for sale Treasury & Others, 12% Singapore, 11% Mainland China, Australia, 18% 11% • 31 Completed hote
Slide 12: Seeding New Growth
Seeding New Growth • Synergistic businesses supports core businesses’ growth • Significant value creation opportunities in these businesses FEC Stake Highly Synergistic Business 25% stake • Integrated resort targeting Asia Pacific customers • Mortgage financing platform targeting Asian middle class
Slide 13: Specific Cost Control Measures Taken To Ensure Long Term Sustainability
Specific Cost Control Measures Taken To Ensure Long Term Sustainability Specific actions taken Meticulous review of all Streamlining of operations expenses and costs With the rationalization programme Cancellation of certain Delayed certain capital implemented, the Group expects net incentive paymen
Slide 14: Balance Sheet Gearing Remained Healthy
Balance Sheet Gearing Remained Healthy • Efforts being made to extend debt maturity HK$ mn As at 30.9.2020 As at 31.3.2020 Total bank loans and notes 25,414 23,460 Investment securities 3,714 3,027 Bank and cash balances(1) 3,476 3,040 Liquidity position 7,190 6,067 Net debt(2) 18,224 17,393 Carryin
Slide 15: Clear Plan to Manage Balance Sheet
Clear Plan to Manage Balance Sheet • Expected settlements and refinancings to reduce debt due within a year HK$ bn Total short-term debt as of 30.9.2020 11.9 Refinancing of debt under discussion / completed (5.0) Private placement of 12.25-year notes and capital to be released through Ruby Bond (0.6
Slide 16: Continued Ample Access to Liquidity
Continued Ample Access to Liquidity • Existing liquidity available of HK$12.4 bn (cash position and undrawn facilities) far exceeds the capex of HK$2.1 bn • Presales of HK$13.4 bn provides visibility on future cash inflow streams • Ability to raise further liquidity by borrowing against unencumbered
Slide 17: Objective of Long Term Dividend and NAV/Share Growth Is Intact
Objective of Long Term Dividend and NAV/Share Growth Is Intact • Resilient NAV despite current challenging business environment • Continue to deliver a sustainable and attractive dividend: a priority for the Group 10-Year NAV CAGR : 7.1% 10-Year DPS CAGR: 12.2% 13.29 22.0 22.0 12.41 12.31 11.59 19.0
Slide 18: 2. Review of Operations: Property Development
2. Review of Operations Property Development Aspen at Consort Place, London 18
Slide 19: Project Delivery During FY2021
Project Delivery During FY2021 West Side Place, Melbourne (Towers 1 and 2) No. of units: 1,377 Total attr. GDV: HK$5.3 bn ARTRA(1), Singapore No. of units: 400 Total attr. GDV: HK$3.1 bn Note: (1) The Group has a 70% interest in the development. 19
Slide 20: Upcoming Project in 2H FY2021 – Hyll on Holland, Singapore
Upcoming Project in 2H FY2021– Hyll on Holland, Singapore A New Freehold and Luxury Condominium in a Great Neighborhood Executive Summary Close to Orchard and Singapore Botanic Garden and is Location limited by Holland Village, Farrer Road, and Dempsey Cluster, which are known among both locals and
Slide 21: Upcoming Project in 2H FY2021 – Victoria Riverside, Manchester
Upcoming Project in 2H FY2021 – Victoria Riverside, Manchester An Attractive Residential-led Development with Spacious and High-Quality Public Realm Executive Summary Located to the north east of Manchester city centre, the project is bordered by Dantzic Street to the north and Location west, Gould
Slide 22: Completion in 2H FY2021 – MeadowSide Plot 5, Manchester
Completion in 2H FY2021 – MeadowSide Plot 5, Manchester An Attractive Mix of City Living, Urban Amenities and Parkland Peace in the City Centre Executive Summary A landmark project located in the heart of The Noma Quarter, north of Manchester city centre, overlooking Location Angel Meadow Park, the
Slide 23: 2. Review of Operations: Hotel Operations & Management
2. Review of Operations Hotel Operations & Management The Ritz-Carlton, Perth 23
Slide 24: FEC Took Prompt Actions to Stay Ahead
FEC Took Prompt Actions to Stay Ahead • Reducing overheads • Keep exploring • Target new demand • Leverage government • Benefit from geographical through standing monetization amid coronavirus incentives and diversification down workforce and opportunities to pandemic compensation cutting fixed cost
Slide 25: Gradual Recovery in Our Hotel Operations
Gradual Recovery in Our Hotel Operations • Global hotel portfolio has enjoyed a gradual improvement in OCC (1) since June 2020 • Hong Kong remains the main contributor to the Group’s hotel operations • Vaccine will be big game changer Global Hong Kong OCC (%) OCC (%) 93.4% 91.8% 90.4% 89.4% 82.4% 65
Slide 26: Decisive Actions and Clear Strategy Resulting in Outperformance
Decisive Actions and Clear Strategy Resulting in Outperformance Monthly Hong Kong and FEC Hotel Occupancy Rate: OCC(%) 100% 82% 76% 80% 70% 71% 62% Dorsett Hong Kong 60% 52% Hong Kong Market (overall) 60% 49% 50% 44% 34% 37% 40% 20% 0% Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Source: Hong Kong Tour
Slide 27: Kai Tak Development – Project Progressing Well
Kai Tak Development – Project Progressing Well Kai Tak Development • The HK Government’s most significant investment in infrastructure in recent decades • Total area: over 320 hectares • Kai Tak Outline Zoning Plan: A mix of community, housing, business, entertainment, tourism and infrastructural us
Slide 28: 2. Review of Operations: Car Park Operations
2. Review of Operations Car Park Operations EXO Car Park, Melbourne 28
Slide 29: Performance of Car Park Operations Impacted by COVID-19
Performance of Car Park Operations Impacted by COVID-19 • COVID-19 hampered the performance from March 2020 30.9.2020 31.3.2020 • Taken appropriate actions to mitigate the impact, including strategically reducing No. of No. of No. of No. of Car Park Bays Car Park Bays overheads by eliminating expens
Slide 30: Value-Added Technology Reduces Costs and Enhances Value
Value-Added Technology Reduces Costs and Enhances Value Leading Technology Platform • Car park operator with in-house technology capability • Control centre in Melbourne overseeing all operated car parks • Able to efficiently roll out technology to existing and new sites End-to-end Car Park Service
Slide 31: 2. Review of Operations: Gaming Operations
2. Review of Operations Gaming Operations Concept of Queen’s Wharf Brisbane 31
Slide 32: TWC Remains Resilient Despite Challenging Operating Environment
TWC Remains Resilient Despite Challenging Operating Environment • Three full-services casinos in the Czech Republic • The three casinos under the Group were ordered to temporarily close Revenue(1) by the local government in March 2020 and re-opened in early June 1H FY2021 1H FY2020 2020 33.0% YoY HK
Slide 33: QWB: Equity Investment Phase Almost Over; Harvesting Period Coming Soon
QWB: Equity Investment Phase Almost Over; Harvesting Period Coming Soon Queen’s Wharf Brisbane Flagship Integrated Resort Podium - Public entertainment precinct Podium - Public entertainment precinct • World-class integrated resort destination • FEC’s stake: 25% • Hotel/Retail/Casino • Executed AUD1
Slide 34: Strategic Alliance with The Star: Other Compelling Projects
Strategic Alliance with The Star: Other Compelling Projects The Star Gold Coast Precinct The Star Sydney • Ongoing planning for landmark residential and hotel towers adjacent to The Star Sydney, to be operated by The Ritz-Carlton • FEC’s stake: 33.3% • Hotel/Residential Pyrmont Precinct, Sydney • Fi
Slide 35: 2. Review of Operations: Other Businesses
2. Review of Operations Other Businesses The Towers at Elizabeth Quay, Perth 35
Slide 36: BC Group – Moving Into a New Growth Phase
BC Group – Moving Into a New Growth Phase Latest update Australia and UK residential market outlooks • Completed RMBS deal in November, transaction was upsized to AUD416 mn • With a low interest rate environment, renters are likely to find it cheaper to buy than rent • Fast growing platform offering
Slide 37: New Business – Far East Vault
New Business – Far East Vault Latest security system: Facial recognition Real time QR codes Palm vein scans Email notifications of A Dedicated 5-star vault to use intelligent every entry and exit security technologies in Hong Kong • Commenced business in October 2020 Other features: • Provides aroun
Slide 38: 3. Prospects
3. Prospects The Star Residences, Gold Coast 38
Slide 39: Outlook
Outlook Mitigation Strategies for COVID-19 Catalysts for 2H FY2021 New launches • Adjust the level of workforce, in particular in the - Victoria Riverside in Manchester hotel operations - Full launch of Hyll on Holland(1) in Singapore • Continue to review all of the overheads with a view Hotel OCC i
Slide 40: Strengthen Sustainable Development Governance
Strengthen Sustainable Development Governance Environment Governance Social Property Development: • Formation of Steering Committee • Integrated green building elements – Two regular meetings annually into property design work – Plan to set a 10-year sustainable plan • Strive to contribute to commun
Slide 41: Focus on IR and ESG Continued To Be Recognized
Focus on IR and ESG Continued To Be Recognized FinanceAsia's Best Companies Poll 2020 2020 6th Investor Relations Awards by HKIRA • Best Mid-Cap Company in Hong Kong • Best IR Company • Best CEO in Hong Kong - Ranked 2nd – Tan Sri • Best IR by Chairman / CEO – Tan Sri Dato’ Dato’ David Chiu David Ch
Slide 42: Thank You
Thank You Questions & Answers For more information, please contact: Investor Relations Department: ir@fecil.com.hk Or visit the Company’s website: www.fecil.com.hk FEC Official WeChat 42
Slide 43: 4. Appendices
4. Appendices The Towers at Elizabeth Quay, Perth 43
Slide 44: Strong Pipeline for Sustainable Growth
Strong Pipeline for Sustainable Growth Projects under presale Cumulative presales Expected attr. SFA(1) Expected attr. GDV(2) Expected Cumulative presale Notes: Location (1) The figures represent approximate saleable As at 30.09.2020 (HK$'M) (sq.ft.) (HK$'M) Completion as % of GDV 1 West Side Place
Slide 45: Hotel Operating Performance
Hotel Operating Performance Dorsett Group 1H FY2021 1H FY2020 YoY change Hong Kong Occupancy rate 71.7% 82.5% -10.8ppts Average room rate (HK$) 409 659 -37.9% RevPAR (HK$) 294 544 -46.0% Malaysia Occupancy rate 32.4% 72.6% -40.2ppts Average room rate (MYR) 154 195 -21.0% RevPAR (MYR) 50 142 -64.8% M
Slide 46: Significant Hidden Value in FEC’s Hotel Portfolio
Significant Hidden Value in FEC’s Hotel Portfolio Capital Value @ 31.3.2020 Revaluation Surplus City / Country Description Rooms (HK$ mn) (HK$ mn) Hotels in operation Hong Kong 1 Dorsett Wanchai Hong Kong Amid Wanchai and Causeway Bay 454 3,880 3,633 2 Cosmo Hotel Hong Kong In Hong Kong's prime busi
Slide 47: Details of Major Investment Properties
Details of Major Investment Properties Total GFA Total GFA Current Investment Properties Pipeline Investment Properties (sq. ft.) (sq. ft.) FEC Building, Central, Hong Kong 3,000 Queen’s Wharf Brisbane(1), Brisbane 430,600 (2) FEC Building, Nathan Road, Hong Kong 38,200 The Star Residences (Tower 1
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