Far East Consortium International Limited · HKEX:35
Far East Consortium International — H1 FY2016 Earnings Presentation
44 slides from Far East Consortium International's earnings presentation, November 2015
Slide 1: FY2016 Interim Results Presentation
FY2016 Interim Results Presentation For the six months ended 30 September 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. Business Update 2. FY2016 Interim Results Summary 3. Review of Operations 4. Prospects 3
Slide 4: 1. Business Update
1. Business Update 4
Slide 5: Business Update
Business Update Development agreements on Queen’s Wharf Brisbane signed on 16 November 2015. Project is expected to generate strong recurring cashflow stream for the Group Won tender of Alexandra View residential project in Singapore for S$377mn in November 2015 (FEC 70% and NWD 30%) Privatisa
Slide 6: Financial Highlights (1H FY2016)
Financial Highlights (1H FY2016) Revenue and gross profit decreased by 35.9% and 27.4% respectively to HK$1,857 million and HK$629 million respectively, compared with that in 1H FY2015. Results were affected by adverse currency exchange rate movements, lower booking of residential sales and lower
Slide 7: Queen's Wharf Brisbane Project
Queen’s Wharf Brisbane Project • Development agreements and JV agreements signed on 16 November 2015 • Integrated Resort Component (IR) : 5 world class hotels (including Ritz-Carlton Hotel owned by Echo) with approximately 1,100 new premium hotel rooms, high end food (50 restaurants) and commercial
Slide 8: Queen's Wharf Brisbane Project
Queen’s Wharf Brisbane Project Investment Plan GFA Breakdown (Approx., subject to planning) $A million Total FEC’s stake FEC Portion Component Expected GFA (sq.m.) Total investment of IR (100%) 1,930 n/a n/a Residential 167,160 Hotel 89,130 Bank financing of IR (60%) 1,157 n/a n/a Retail lettable ar
Slide 9: Overview of Australian Casino Environment
Overview of Australian Casino Environment City Sydney Melbourne Brisbane Gold Coast Perth Adelaide Darwin City population(‘000)(2014 June) 4,452 (+1.8% yoy) 4,269 (+2.2% yoy) 2,177 (+1.7% yoy) 614 (+1.6% yoy) 1,945 (+2.3% yoy) 1,277 (+1.0%) 123 (+1.7% yoy) State/territory New South Wales Victoria Qu
Slide 10: Alexandra View Residential Project in Singapore
Alexandra View Residential Project in Singapore Diversification of FEC development portfolio FEC has 70% stake of the project Land price @ approx. S$850/sq. ft. Location Alexandra View, Singapore Plot 1: 8,398.5 sq.m. Site Area Plot 2: 30.8 sq.m. Allowable Development Residential with Commerci
Slide 11: Privatisation of Dorsett
Privatisation of Dorsett Privatisation of Dorsett completed in October 2015 153,772,358 new FEC shares issued (approximately 7.42% of the enlarged share capital) and HK$394 million cash was paid to independent Dorsett’s shareholders Privatisation Benefits - 7 unencumbered hotels - Dorsett capi
Slide 12: NAV Enhancement after Privatisation of Dorsett
NAV Enhancement after Privatisation of Dorsett Enhancement of FEC net asset value (“NAV”) Pre-deal Post-deal HK$'M HK$'M Equity attributable to shareholders of the Company (as at 30.9.2015) 8,855 8,855 Hotel revaluation surplus(HK$11,042M@73.97%, as at 31.5.2015) 8,168 8,168 Other assets revaluation
Slide 13: 2. FY2016 Interim Results Summary
2. FY2016 Interim Results Summary 13
Slide 14: Results Key Highlights
Results Key Highlights 1HFY2016 1HFY2015 YoY change Revenue (HK$ M) 1,857 2,895 -35.9% Gross profit (HK$ M) 629 865 -27.4% Net profit attributable to shareholders (HK$ M) 263 401 -34.3% EPS (HK cents) - Basic 13.7 21.6 -36.6% - Fully diluted 13.7 21.4 -36.0% Dividend per share (HK cents) - Interim 3
Slide 15: Impact of Exchange Rate Movements
Impact of Exchange Rate Movements Unfavorable currency movements affected performance However, underlying performance remain resilient Local currency loan serves as natural hedge Currency exchange rate comparison 30.9.2015 31.3.2015 % change 30.9.2015 30.9.2014 % change HK$ HK$ HK$ HK$ HK$/AUD
Slide 16: GP Margin Analysis
GP Margin Analysis 1HFY2016 1HFY2015 Gross profit Gross profit Gross profit Gross profit Revenue Revenue (before depreciation) (after depreciation) (before depreciation) (after depreciation) HK'M HK'M % HK'M % HK'M HK'M % HK'M % Sales of properties 889 299 33.6% 299 33.6% 1,817 433 23.8% 433 23.8% H
Slide 17: Dual Engine Strategy & Balanced Regional Portfolio
Dual Engine Strategy & Balanced Regional Portfolio By Geography By Business Revenue Breakdown (1H FY2016) Dual Engine Strategy： Malaysia United 6% Kingdom Leasing and others 2% Singapore 4% 3% Residential property development: Car Park Operations and High growth potential Facilites Management 16%
Slide 18: Prudent Capital Management
Prudent Capital Management FEC consolidated As at As at 30.9.2015 31.3.2015 HK$ million HK$ million FEC debt maturity profile (1) Bank loans and bonds Due within 1 year 2,124 3,821 Due more Due 1-2 years 2,230 530 than 5 years Due 2-5 years 4,036 5,167 11% Due within Due more than 5 years 1,016 301
Slide 19: Substantial War Chest to Meet Capex Requirement
Substantial War Chest to Meet Capex Requirement Presales HK$7.5bn provides clear visibility of cashflow stream War chest can be enhanced by leveraging unencumbered hotels War chest HK$ M Group cash and liquidity@30.9.2015 3,800 Undrawn banking facilities - Corporate use 2,100 Undrawn banking fac
Slide 20: Healthy Interest Coverage
Healthy Interest Coverage Financial year 2009 2010 2011 2012 2013 2014 2015 1HFY2016 1HFY2015 HK$m Profit before tax 222 493 555 718 1,024 1,246 1,328 323 538 Finance cost 126 110 186 166 168 281 224 115 102 Depreciation and 79 84 129 152 181 234 297 164 141 amortisation EBITDA 427 687 870 1,036 1,3
Slide 21: Proven Track Record
Proven Track Record Financial Year ended 31 March 2009 2010 2011 2012 2013 2014 2015 CAGR Revenue (HK$m) 1,733 2,342 1,654 1,761 3,732 4,066 5,110 19.8% Sales of properties (HK$m) 951 1,376 245 46 1,946 1,589 2,962 20.8% Hotel operations and management (HK$m) 679 616 867 1,096 1,153 1,785 1,454 13.5
Slide 22: 3. Review of Operations: Property Development
3. Review of Operations Property Development 22
Slide 23: Summary of Project Presales/Pipeline
Summary of Project Presales/Pipeline Cumulative Cumulative Expected attributable Expected Expected presale as % Projects under presale Location presale saleable floor Area(1) attributable GDV (1) completion(2) of GDV @30.9.2015 (HK$m) (sq. ft.) (HK$m) % 1 View Pavilion (remaining) Shanghai 178 61,00
Slide 24: Clear Visibility of Cashflow Stream
Clear Visibility of Cashflow Stream Expected completion in 2H FY2016/2017 View Pavilion, Shanghai (remaining) King’s Manor, Shanghai Eivissa Crest, Hong Kong 58 apartments 479 apartments and 90 townhouses 106 apartments 61,000 sq. ft. SFA 712,000 sq. ft. SFA 36,000 sq. ft. SFA 94% presold 41% pre-so
Slide 25: Mid Term Pipeline is Robust
Mid Term Pipeline is Robust Expected completion in FY2018 and thereafter The Towers at Elizabeth Quay, Perth Aspen Crest, Hong Kong The Fifth, Melbourne 400 apartments, 402 apartments 234 apartments 320,000 sq. ft. SFA 64,000 sq.ft. SFA 284,000 sq. ft. SFA 71% registered pre-sold* 99% pre-sold 71% p
Slide 26: 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 Queen’s Wharf, Brisbane ~2,500 residential apartments Residential 33,000 sq.ft. SFA ~2,000 residential apartments (50% stake) 2,000,000 sq.ft. SFA ~118 apartments 706,000 s
Slide 27: West Side Place – Melbourne
West Side Place – Melbourne 27
Slide 28: Land Bank
Land Bank Gross Floor Area Land Bank Location (sq.ft.) Fong Lok Wai Hong Kong 410,000 (1) California Garden - remaining Shanghai 3,800,000 (2) Gangtonyuan Guangzhou 500,000 New Times Plaza Guangzhou 115,000 (3) 4,825,000 (1) FEC has a 25.33% stake. Gross floor area indicated is the portion attributa
Slide 29: Growth in Rental / Investment Properties
Growth in Rental / Investment Properties Attributable GFA GFA Current Investment Properties (sq.ft.) Pipeline Investment Properties (sq.ft.) FEC Building, Central, Hong Kong (O) 16,000 Upper West Side Retail, Melbourne (R) 15,000 FEC Building, Nathan Road, Hong Kong (O) 38,000 West Side Place, Melbo
Slide 30: 3. Review of Operations: Hotel operations and management
3. Review of Operations Hotel operations and management 30
Slide 31: Hotel Recurring EBITDA
Hotel Recurring EBITDA Six months ended 30 September 2015 2014 HK$'000 HK$'000 Growth Reported revenue 634,058 714,615 Dividend / interest from securities and financial (11,978) (9,724) products investment Recurring revenue 622,080 704,891 -11.7% Profit before taxation 44,755 88,416 Interest income
Slide 32: Hotel Operating Statistics
Hotel Operating Statistics 1HFY2016 1HFY2015 Hong Kong • Strength in HK$ affected overall performance (i) Occupancy rate 85.7% 93.6% Average room rate (HK$) (i) 679 831 • Decrease in RevPAR in Hong Kong was due (i) RevPAR (HK$) 582 778 to the decline in number of overnight visitors' Malaysia arrival
Slide 33: Proactive Steps Taken to Streamline Hotel Operations
Proactive Steps Taken to Streamline Hotel Operations Cluster hotel management to reduce overheads Streamlining of overlapped functions following privatisation - Listing - Accounting/Auditing - Legal Reallocation of capital into higher return projects Cost Savings + Higher Return on Capital Emp
Slide 34: 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 @31.5.2015 Hong Kong 1 Cosmopolitan Hotel, Hong Kong Hong Kong Near Wanchai and Causeway Bay 454 2,623 357 2,266 2 Silka West Kowloon, Hong
Slide 35: Consistent Delivery of Room Growth
Consistent Delivery of Room Growth No. of rooms 10,000 9,087 9,000 8,083 8,083 8,000 7,343 7,343 7,000 6,869 6,043 6,043 6,000 5,429 5,000 4,894 4,000 3,834 3,901 3,000 2,980 2,956 1,549 2,000 1,309 1,549 1,000 0 FY2016F FY2017F FY2018F FY2019F FY2020F FY2021F FY2022F FY2006A FY2007A FY2008A FY2009A
Slide 36: Consistent Delivery of Room Growth (Cont'd)
Consistent Delivery of Room Growth (Cont’d) Currently Owns 20 Hotels with additional 12 Hotels in Pipeline Hotel in Development Pipeline Number of hotel rooms is expected to grow by 50% over the next 6 years Number (1) (2) of Hotel Location No. of rooms Hotel operators No. of Owned and No. of rooms
Slide 37: 3. Review of Operations: Car park operations and facilities management
3. Review of Operations Car park operations and facilities management 37
Slide 38: Steady Contribution from Car Park Business – Care Park
Steady Contribution from Car Park Business – Care Park • Approx. 4,300 car park bays added to the car park management portfolio • Assuming constant exchange rate, revenue from this division increased by 14.3% • Third party owners include local governments, shopping malls, retailers, universities, ai
Slide 39: Car Park Business – Care Park (Cont'd)
Car Park Business – Care Park (Cont’d) Advanced Technology Our Clients 39
Slide 40: 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 30 September 2015, the Group ha
Slide 41: 4. Prospects
4. Prospects
Slide 42: Company Outlook
Company Outlook Group will continue with regional diversification strategy - Recent additions to development pipeline in Brisbane and Singapore are good examples Group well positioned to benefit in long term growth of hospitality sector - Dorsett now 100% owned - More than 3,000 rooms will be ad
Slide 43: Company Award 2015
Company Award 2015 AsiaMoney Best Small Cap Companies 2015 iNova Corporate Website Bronze Award 2015 Top 3 in Grand Prix for Overall Investor Relations IR Magazine (small cap) Top 3 in Best Investor Relations Officer IR Magazine (small & mid cap) IR Magazine Top 3 in Best in Sector: Real Estate Trav
Slide 44: Thank You
Thank You Questions & Answers FEC Official WeChat
Far East Consortium International — H1 FY2016 Earnings Presentation on 6ix