Far East Consortium International Limited · HKEX:35
Far East Consortium International — FY2016 Earnings Presentation
47 slides from Far East Consortium International's earnings presentation, Jun 24, 2016
Slide 1: FY2016 Annual Results
FY2016 Annual Results 24 June 2016
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 Achievements 2. FY2016 Annual Results Summary 3. Review of Operations 4. Prospects 3
Slide 4: 1. Key Achievements
1. Key Achievements Melbourne night view, Australia 4
Slide 5: Key Achievements
Key Achievements • Completed privatisation of Dorsett Corporate Action • Completed refinancing of FEC CNH bond with unsecured syndicated loan at attractive refinancing rate • Queen’s Wharf development project • JV with Star/CTF to develop Sydney and Gold Coast casino sites New Projects • Alexandra V
Slide 6: Financial Highlights
Financial Highlights FY2016 FY2015 YoY change Revenue (HK$ M) 3,995 5,110 -21.8% Gross profit (HK$ M) 1,706 1,946 -12.3% Gross profit margin 42.7% 38.1% +4.6ppts Net profit attributable to shareholders (HK$ M) 734 957 -23.3% (1) Adjusted cash profit (HK$ M) 853 836 2.0% EPS (HK cents) - Basic 37 51
Slide 7: Continued Growth in Adjusted Cash Profit
Continued Growth in Adjusted Cash Profit (1) FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 HK$ M HK$ M HK$ M HK$ M HK$ M HK$ M HK$ M HK$ M Profit attributable to shareholders of the 86 324 394 448 903 914 957 734 Company Add / (less): Attributable revaluation loss / (gain) 3 (166) (312) (1
Slide 8: Privatisation of Dorsett – Value Enhancing Transaction
Privatisation of Dorsett – Value Enhancing Transaction • Transaction completed in October 2015 Vote of Confidence • 97.8% of independent shareholders voted in favour Cost Savings • Efficiency gain from streamlined operations • Direct access to Dorsett’s cash flow (stronger credit recognition) Flexib
Slide 9: Sydney and Gold Coast – Expanding our Production Base
Sydney and Gold Coast – Expanding our Production Base New JV MOUs with CTF and The Star signed to develop The Star casino sites in Sydney and Gold Coast Planning approval in progress Sydney Gold Coast 9
Slide 10: Queen's Wharf Brisbane – Adding to Our Future Recurring Income
Queen’s Wharf Brisbane – Adding to Our Future Recurring Income For details: http://www.destinationbrisbaneconsortium.com.au/ 10
Slide 11: Queen's Wharf Brisbane – Adding to Our Development Pipeline
Queen’s Wharf Brisbane – Adding to Our Development Pipeline Investment Plan Residential Component (Approx., subject to planning) Total FEC Portion Expected SFA Expected GDV FEC’s Stake Component (A$ million) (A$ million) (sq.m.) (A$ million) Total investment of IR (100%) 1,930 n/a n/a Tower 4 48,200
Slide 12: Brisbane Casino – A Significant Market with Favorable Licence Conditions
Brisbane Casino – A Significant Market with Favorable Licence Conditions City Sydney Melbourne Brisbane Gold Coast Perth Adelaide Darwin City population(‘000)(2015 June) 4,904 (+1.7% yoy) 4,513 (+2.1% yoy) 2,345 (+2.3% yoy) 614 (+1.6% yoy) 2,112 (+3.4% yoy) 1,277 (+1.0%) 123 (+1.7% yoy) State/territ
Slide 13: Pipeline Addition in SG/HK during Down Cycle
Pipeline Addition in SG/HK during Down Cycle Singapore - Alexandra View Residential with Commercial at Allowable Development 1st storey GFA 442,970 sq. ft. S$377 million Land price (S$851 / sq. ft.) Number of apartments (1) 400 Alexandra View, Singapore Hong Kong - Shatin Heights Parc GFA 88,800
Slide 14: 2. FY2016 Results Summary
2. FY2016 Results Summary Water’s edge of the Swan River, Perth 14
Slide 15: Strong HK$ Beneficial to FEC During Overseas Investment Phase
Strong HK$ Beneficial to FEC During Overseas Investment Phase Net profit would have been HK$27.6m higher assuming constant exchange rates Rates as at 31.3.2016 31.3.2015 % change HK$/AUD 5.93 5.92 0.2% HK$/RMB 1.20 1.25 -4.0% HK$/MYR 1.97 2.09 -5.7% HK$/GBP 11.12 11.46 -3.0% HK$/SGD 5.74 5.63 2.0%
Slide 16: Overall GP Margin Expanded Albeit Challenging Hotel Market
Overall GP Margin Expanded Albeit Challenging Hotel Market FY2016 FY2015 Gross profit Gross profit Gross profit Gross profit Revenue (before (after Revenue (before (after depreciation) depreciation) depreciation) depreciation) HK$ M HK$ M % HK$ M % HK$ M HK$ M % HK$ M % Sales of properties 1,979 1,0
Slide 17: Interest Coverage Remains Healthy
Interest Coverage Remains Healthy HK$ M FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Profit before tax 222 493 555 718 1,024 1,246 1,328 979 Finance costs 126 110 186 166 168 281 224 228 Depreciation and amortisation 79 84 129 152 181 231 294 316 EBITDA 427 687 870 1,036 1,373 1,758 1,846
Slide 18: Substantial War Chest to Drive Future Growth
Substantial War Chest to Drive Future Growth Presales HK$7.5bn provides clear visibility of cash flow stream War chest can be enhanced by leveraging unencumbered hotels War chest HK$ M Group cash and liquidity @ 31.3.2016 3,750 Undrawn banking facilities - Corporate use 1,900 Undrawn banking fac
Slide 19: Prudently Gearing Up Amid Favorable Rate Environment
Prudently Gearing Up Amid Favorable Rate Environment Debt maturity profile Due within 1 year Due more than 5 16% As at As at years 8% 31.3.2016 31.3.2015 HK$ M HK$ M Due 1- 2 (1) years Bank loans and bonds 14% Due within 1 year 1,864 3,821 Due 2- 5 years Due 1-2 years 1,691 530 62% Due 2-5 years 7,1
Slide 20: Increasingly Diversified and Balanced Portfolio
Increasingly Diversified and Balanced Portfolio By Geography By Business Revenue Breakdown (FY2016) Singapore 3% Car Park Operations & United Facilities Management Kingdom 16% 3% Hotel Operations & Management Mainland 33% China 36% Australia & Leasing and others New Zealand 2% 33% Malaysia Sales of
Slide 21: Proven Track Record
Proven Track Record For the year ended / as at 31 March (In HK$m, unless otherwise stated) 2009 2010 2011 2012 2013 2014 2015 2016 CAGR Revenue 1,733 2,342 1,654 1,761 3,732 4,066 5,110 3,995 13% Sales of properties 951 1,376 245 46 1,946 1,589 2,962 1,979 11% Hotel operations and management 679 616
Slide 22: Reliable Return to Shareholders Whilst Maintaining Growth
Reliable Return to Shareholders Whilst Maintaining Growth FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Year-end NAV/share(1) (HK$) n/a n/a 6.00 6.70 8.45 9.12 9.02 9.79 Basic EPS (HK cents) 5 18 21 23 50 51 51 37 Diluted EPS (HK cents) 2 18 21 23 50 51 51 36 Dividend Total dividend per sh
Slide 23: 3. Review of Operations
3. Review of Operations Property Development Royal Riverside Internal Concept Artwork, Guangzhou 23
Slide 24: Strong Pipeline for Sustainable Growth
Strong Pipeline for Sustainable Growth Expected Expected Cumulative Cumulative attributable attributable Expected presale Projects under presale Location presales SFA(1) GDV(1) completion(2) as % of GDV @31.3.2016 (HK$ M) (sq. ft.) (HK$ M) % 1 Eivissa Crest(3) Hong Kong 629 36,000 767 FY2017 82% 2 A
Slide 25: West Side Place, Melbourne – Strong Response
West Side Place, Melbourne – Strong Response 4 Residential Towers, Feature Ritz Carlton Hotel and commercial area SFA Approx. 2,000,000 sq.ft. Net lettable area Approx. 65,000 sq.ft. Number of 2,500+ apartments Number of hotel 263 (Ritz Carlton Hotel) rooms Launch time Tower 1 and 2: June 2016 25
Slide 26: Other Projects in Australia – Balanced Pipeline in Portfolio
Other Projects in Australia – Balanced Pipeline in Portfolio Upper West Side Stage 4, Melbourne The Towers at Elizabeth Quay, Perth 388,000 sq. ft. SFA 320,000 sq. ft. SFA 641 apartments 379 apartments Queen’s Wharf, Brisbane The FIFTH, Melbourne 706,000 sq.ft. attributable SFA 284,000 sq. ft. SFA ~
Slide 27: Alpha Square, London – Entrance into UK Residential Market
Alpha Square, London – Entrance into UK Residential Market Planning recently obtained Features Residential and hotel component SFA 388,000 sq.ft. 221,000 sq.ft. Net lettable area (incl. retail and other facilities) Number of hotel rooms 231 27
Slide 28: Royal Riverside, Guangzhou
Royal Riverside, Guangzhou Feature 5 Residential Towers SFA 728,000 sq.ft. Number of apartments 607 Tower 2: Jan 2016 Launch time Tower 1: Apr 2016 Tower 3 – 5: 2016Q4 28
Slide 29: California Garden, Shanghai
California Garden, Shanghai King’s Manor 712,000 sq.ft. SFA 479 apartments and 90 townhouses Royal Crest II 259,000 sq.ft. SFA 180 apartments and 42 townhouses 29
Slide 30: Projects in Hong Kong
Projects in Hong Kong Eivissa Crest Aspen Crest Tai Wai 36,000 sq.ft. SFA 64,000 sq.ft. SFA 33,000 sq.ft. SFA 106 apartments 234 apartments 118 apartments Sham Shui Po Sha Tau Kok Tan Kwai Tsuen 28,000 sq.ft., SFA 99,000 sq.ft. SFA 51,000 sq.ft. SFA 72 apartments 263 apartments 24 town houses 30
Slide 31: Projects in Malaysia / Singapore
Projects in Malaysia / Singapore Alexandra View, Singapore Dorsett Bukit Bintang, Kuala Lumpur 290,000 sq. ft. attributable SFA (70% stake) 215,000 sq. ft. SFA 400 apartments 252 apartments 31
Slide 32: Land Bank – Future Pipeline
Land Bank – Future Pipeline Attributable GFA 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. GFA indicated is the portion attr
Slide 33: Details of Investment Properties
Details of Investment Properties Attributable Current Investment Properties GFA Pipeline Investment Properties GFA (sq. ft.) (sq. ft.) FEC Building, Central, Hong Kong (O) 16,000 Upper West Side Stage 4, Melbourne (R) 4,900 FEC Building, Nathan Road, Hong Kong (O) 38,000 The FIFTH Retail, Melbourne
Slide 34: 3. Review of Operations – Hotel operations and management
3. Review of Operations Hotel operations and management Dorsett Shepherds Bush, London 34
Slide 35: Overall Occupancy Maintained Albeit Challenging HK Market
Overall Occupancy Maintained Albeit Challenging HK Market FY2016 FY2015 Hong Kong • Strength in HK$ and decline in number of Occupancy rate (i) 86.0% 92.7% overnight visitors' arrivals in Hong Kong Average room rate (HK$) (i) 731 856 affected overall performance. (i) RevPAR (HK$) 629 794 Malaysia •
Slide 36: Proactive Branding and Marketing Initiatives
Proactive Branding and Marketing Initiatives Hotel upgrades completed - Cosmopolitan Hotel, Hong Kong – to be renamed Dorsett Wan Chai - Dorsett Kuala Lumpur Diversify customer sources - e.g. Korea, Japan, South East Asia, Australia, Europe and US Active use of E-marketing - WeChat - Dorsett o
Slide 37: New Hotel in HK Opening Soon – Silka Tsuen Wan, Hong Kong
New Hotel in HK Opening Soon – Silka Tsuen Wan, Hong Kong - A new build hotel development in Tsuen Wan, Hong Kong - 157,066 sq.ft. with 409 bedroom 3-star business hotel 37
Slide 38: Dorsett City – A New Pearl in the City of London
Dorsett City – A New Pearl in the City of London - A new build hotel development in Aldgate, City of London - 103,000 sq. ft. 13-storey (basement + 12 storey) 270 bedroom 4-star business hotel - 253 guests rooms, 17 guest suites - Restaurants, executive lounge, fitness centre, meeting rooms, and a r
Slide 39: Substantial Development Profit Not Yet Recognised
Substantial Development Profit Not Yet Recognised Capital Value Book Value Revaluation City Description Rooms @ 31.3.2016 @ 31.3.2016 Surplus (HK$ M) (HK$ M) (HK$ M) Hotels in operation Hong Kong Cosmopolitan Hotel 1 Hong Kong Near Wanchai and Causeway Bay 454 2,543 348 2,195 (to be renamed as Dorse
Slide 40: Clear Pipeline for Room Growth
Clear Pipeline for Room Growth No. of rooms 10,000 9,065 9,000 Approximately 6,000 rooms as at 31 March 2016 7,5677,567 7,830 8,000 7,363 6,722 7,000 6,0436,043 6,000 5,429 12 owned and/or managed hotels in the 5,000 4,894 development pipeline in next 6 years 4,000 3,834 3,901 3,000 2,980 2,956
Slide 41: 3. Review of Operations – Car park operations and facilities management
3. Review of Operations Car park operations and facilities management Toorak Place, Melbourne 41
Slide 42: Care Park – Steady Cash Flow with Constant Growth
Care Park – Steady Cash Flow with Constant Growth 4,600 car park bays added to the car park portfolio in FY16, up 7% YoY Assuming constant exchange rate, revenue from this division increased by 11.5% As at 31 March 2016 As at 31 March 2015 No. of No. of No. of Bays No. of Bays Car Park Car Park
Slide 43: Steadily Growing Facilities Management Services – APM
Steadily Growing Facilities Management Services – APM Asset-light business model with steady growth expected NorthBank Upper West Side Vogue - 188 apartments, 16 floors - “UWS” is a 2,200 apartment development - 505 apartments, 30 floors - Services Provided: Building Management, located in the hea
Slide 44: 4. Prospects
4. Prospects The Towers at Elizabeth Quay, Perth
Slide 45: Company Outlook – Solid Foundation For Growth
Company Outlook – Solid Foundation For Growth • Strong response to the launch of West Side Place Property development business momentum • Residential sites at Singapore and Hong Kong added into development pipeline remains strong • JV with the Star and CTF for Sydney and Gold Coast development • 3,0
Slide 46: Company Awards FY2016 Demonstrate Recognitions
Company Awards FY2016 Demonstrate Recognitions Top 3 Best for Shareholder’s Rights & Equitable AsiaMoney Treatment across Asia (excluding Japan) Top 3 Best Overall for Corporate Governance in AsiaMoney Hong Kong Top 3 Best for Disclosure & Transparency in Hong AsiaMoney Kong Top 2 Best for Sharehold
Slide 47: Thank You
Thank You Questions & Answers FEC Official WeChat
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