Far East Consortium International Limited · HKEX:35
Far East Consortium International — FY2020 Earnings Presentation
53 slides from Far East Consortium International's earnings presentation, June 2020
Slide 1: FY2020 Annual Results
FY2020 Annual Results June 2020 1
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. FY2020 Annual Results Summary 2. Review of Operations 3. Prospects 4. Appendices 3
Slide 4: 1. FY2020 Annual Results Summary
1. FY2020 Annual Results Summary Concept of Queen’s Wharf Brisbane 4
Slide 5: Steering Through a Challenging Environment
Steering Through a Challenging Environment Property Development Recurring Income Business • Robust sale of residential properties • 3 new contributors in hotel operations – The Ritz-Carlton, Perth • 3 projects completed in FY2020 Revenue – Astoria Crest, The Garrison, – Oakwood Premier AMTD Singapor
Slide 6: Growth in Revenue Despite Global Economic Headwinds
Growth in Revenue Despite Global Economic Headwinds • Profitability affected by a number of “one-off items” and lower contribution from hotel business. FY2020 FY2019 % change Revenue (HK$’M) 7,451 6,842 +8.9% Gross profit (HK$’M) 2,259 2,610 -13.4% Net profit attributable to shareholders (HK$’M) 366
Slide 7: Diversification Helped Mitigate Headwinds in Hotel Operations
Diversification Helped Mitigate Headwinds in Hotel Operations HK$’M FY2020 FY2019 % change Recurring revenue Hotel Operations and Management 1,346 1,818 -26.0% - Dorsett Group(1) 1,224 1,685 -27.3% - TWC Hotel Group 121 133 -8.7% Car Park Operations and 760 720 +5.5% Facilities Management Gaming Ope
Slide 8: Adjusted Cash Profit Remained Strong
Adjusted Cash Profit Remained Strong HK$’M FY2020 FY2019 % change Net profit attributable to shareholders 366 1,714 -78.7% Adjustments: Loss/(Gain) on investment property revaluation (post tax) 38(1) (548)(1) -107.0% Depreciation and amortization(2) 438 399 +9.6% Gain on bargain purchase of TWC - (1
Slide 9: Gross Margins Affected by Global Macro Events and Lower Margin from Perth Project
Gross Margins Affected by Global Macro Events and Lower Margin from Perth Project FY2020 FY2019 Gross profit Gross profit Gross profit Gross profit Revenue Revenue (after depreciation) (before depreciation) (after depreciation) (before depreciation) HK$’M HK$’M Margin HK$’M Margin HK$’M HK$’M Margin
Slide 10: Adverse Foreign Exchange Movement Impacted NAV and Profitability
Adverse Foreign Exchange Movement Impacted NAV and Profitability • Assuming constant exchange rate, net profit attributable to shareholders and net assets(1) would have been HK$30 million and HK$1,665 million higher, respectively. • The Australian dollar has since rebounded strongly against the Hong
Slide 11: A Diversified and Resilient FEC
A Diversified and Resilient FEC Description Geographies Property Development • Diverse portfolio of quality residential projects in Asia Pacific and Europe. • Pipeline projects with HK$51.6 billion expected attributable GDV and 10,423,000 sq.ft. expected attributable SFA as at 31 March 2020. • HK$12
Slide 12: Balanced and Diversified Portfolio
Balanced and Diversified Portfolio Specific actions taken: Business diversification allows FEC to take advantage of property cycles in different countries Total Assets by Geography(1) Total Assets by Business Segment(1) United Kingdom, 7% Continental Europe, 2% Hotel operations and management, 46% T
Slide 13: Specific Cost Control Measures Taken Across Regions to Weather the COVID-19 Headwinds
Specific Cost Control Measures Taken Across Regions to Weather the COVID-19 Headwinds Specific actions taken: Streamlining of operations. Meticulous review of all expenses and costs. Cancellation of certain incentive payments. With the rationalization programme implemented, the Group expects net sav
Slide 14: Positioning the Group to Return to a “New Normal”
Positioning the Group to Return to a “New Normal” • Active sell down of inventory HK$4.8 billion as at 31 March 2020. Planning New Launches/ • Examine option to Review Hotel Portfolio • Explore sale of retail assets. redevelop certain HK Active Sell down hotels to residential • New launches in FY202
Slide 15: Active Management of Balance Sheet to Steer Through a Challenging Period
Active Management of Balance Sheet to Steer Through a Challenging Period • Gearing level expected to decline with foreign currency and treasury positions recovery and repayment of construction loan following completion of major residential projects. As at 31.3.2020 As at 31.3.2019 Notes: (1) Include
Slide 16: Ample Access to Liquidity
Ample Access to Liquidity • Existing liquidity available of HK$12.1 billion (cash position and undrawn facilities) far exceeds the capex of HK$2.4 billion. • Presales of HK$12.2 billion provides a clear vision of future cash inflow stream. • Ability to raise further liquidity by leveraging unencumbe
Slide 17: Objective of Long Term Dividend and NAV/Share Growth Not Changed
Objective of Long Term Dividend and NAV/Share Growth Not Changed 10-Year NAV CAGR : 7.1% 10-Year DPS CAGR: 12.2% 13.29 22.0 22.0 12.41 11.59 19.0 10.79 18.5 9.79 16.0 16.0 9.12 9.02 15.0 8.45 13.0 6.70 5.84 6.00 7.0 6.0 6.0 NAV/share (1)(HK$) Interim Dividend (HK$ Cents) Final Dividend (HK$ Cents) T
Slide 18: 2. Review of Operations: Property Development
2. Review of Operations Property Development Aspen at Consort Place, London 18
Slide 19: Completed Projects During FY2020
Completed Projects During FY2020 Astoria Crest, Sham Shui Po The Towers at Elizabeth Quay, Perth The Garrison, Tai Wai 19
Slide 20: New Launch – Tower 4 at Queen’s Wharf Residences, Brisbane
New Launch – Tower 4 at Queen’s Wharf Residences, Brisbane A World-Class Integrated Resort in Queensland, Australia Executive Summary Occupies 10% of CBD footprint, connecting the CBD to Location the Brisbane River and South Bank Expected attr. SFA 253,000 sq.ft. Expected attr. GDV HK$1,406 million
Slide 21: New Launch – Aspen at Consort Place, London
New Launch – Aspen at Consort Place, London An Exquisite Apartment Lifestyle Amidst a Vibrant and Cosmopolitan New Community Executive Summary At the heart of one of London’s most dynamic new Location quarters: South Quays with excellent public transport connectivity Expected attr. SFA 390,000 sq.ft
Slide 22: New Launches Earlier in the Year
New Launches Earlier in the Year Projects Executive Summary In the middle of The Star Gold Coast’s world-class integrated Location resort in Broadbeach, Gold Coast The Star Residences Expected attr. SFA 109,000 sq.ft. – Epsilon, Expected attr. GDV HK$501 million Gold Coast Total units 457 apartments
Slide 23: Upcoming Project in FY2021 – Bourke Street, Melbourne
Upcoming Project in FY2021 – Bourke Street, Melbourne An Exciting Mixed-Use Development Next to Our Previous Projects Executive Summary 640 Bourke Street, an exciting mixed use development providing for a variety of uses including retail, café, Location commercial office, public gallery spaces and c
Slide 24: Upcoming Project in FY2021 – Holland Road, Singapore
Upcoming Project in FY2021 – Holland Road, Singapore A New Freehold and Luxury Condominium in a Great Neighbourhood 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 expa
Slide 25: Upcoming Project in FY2021 – New Cross Central, Manchester
Upcoming Project in FY2021 – New Cross Central, Manchester (Launched) An Up-and-Coming Exciting Neighbourhood in Manchester Executive Summary At the centre of an up-and-coming exciting neighbourhood in Manchester, NOMA & Northern Location Quarter and within close proximity to Victoria Railway Statio
Slide 26: Upcoming Project in FY2021 – Shatin Heights, Hong Kong
Upcoming Project in FY2021 – Shatin Heights, Hong Kong A World-Class Project Surrounded by Lush Greenery Executive Summary Locates at a quiet area with development potential in Location Shatin, Hong Kong Expected attr. SFA 84,000 sq.ft. Expected attr. GDV HK$1,671 million • 62 apartments Details • 4
Slide 27: Upcoming Project – Northern Gateway, Manchester
Upcoming Project – Northern Gateway, Manchester Land Acquisition Paves the Way for the One of the Largest Residential Schemes in the UK 530 family homes and first- Received planning Executive Summary time buyer apartments in approvals for New the Collyhurst Village Cross Central and The site covers
Slide 28: 2. Review of Operations: Hotel Operations & Management
2. Review of Operations Hotel Operations & Management The Ritz-Carlton, Perth 28
Slide 29: FEC Took Prompt Actions to Stay Ahead
FEC Took Prompt Actions to Stay Ahead • Dramatically reducing • Explore monetization • Target new demand • Leverage government • Benefit from geographical overheads through options. amid coronavirus incentives and diversification. standing down – Convert to residential. pandemic. compensation workfo
Slide 30: Hotel Performance by Region (2H FY2020 Impacted by COVID-19)
Hotel Performance by Region (2H FY2020 Impacted by COVID-19) 300 (LC) United Kingdom 100% Australia HK – 4-star Hotel (LC) (LC) 84% 400 61% 100% 800 81% 100% 65% 75% 200 53% 300 75% 600 75% 50% 200 50% 400 754 50% 100 354 25% 589 128 131 100 25% 200 25% 0 0% 0 0% 0 0% 1H FY2020 2H FY2020 2H FY2020 1
Slide 31: New Additions in FY2020
New Additions in FY2020 The Ritz-Carlton, Perth Oakwood Premier AMTD Singapore J-Hotel by Dorsett • FEC brought back Ritz-Carlton to Australia. • Dorsett Hospitality International’s 1st boutique • Opened on 15 November 2019. • Completed acquisition on 18 November 2019. hotel in Kuala Lumpur. • Locat
Slide 32: 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, tourism and infrastructural uses. • Town Pla
Slide 33: 2. Review of Operations: Car Park Operations
2. Review of Operations Car Park Operations EXO Car Park, Melbourne 33
Slide 34: Organic Growth and Regional Diversification
Organic Growth and Regional Diversification 31-Mar-20 31-Mar-19 No. of No. of No. of No. of Car Park Bays Car Park Bays Australia Owned and managed 23 4,382 22 4,038 • COVID-19 impacted the performance from March 2020. Managed only 365 76,441 404 73,611 • Taken appropriate actions to mitigate the im
Slide 35: New Acquisition and Management Contracts Secured in Car Park Operations
New Acquisition and Management Contracts Secured in Car Park Operations New Car Park Acquisition New Management Contracts Secured – Sky City Casino Car Park NZ – Royal Melbourne Institute of Technology – No. of Bays: 3,256 – No. of Bays: 3,200 – EXO Car Park Victoria Harbour – Melbourne Health Portf
Slide 36: 2. Review of Operations: Gaming Operations
2. Review of Operations Gaming Operations Concept of Queen’s Wharf Brisbane 36
Slide 37: First Full-Year Contribution From TWC
First Full-Year Contribution From TWC • Three full-services casinos in the Czech Republic. 11 months ended FY2020/ 31 March 2019/ As at 31 March 2020 • Due to the outbreak of COVID-19, the three casinos under As at 31 March 2019 the Group were ordered to temporarily close by the local Revenue(1) (HK
Slide 38: Strategic Alliance with The Star
Strategic Alliance with The Star 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 A$1.6 billion financings for Queen’s Wha
Slide 39: Strategic Alliance with The Star: Other Compelling Projects
Strategic Alliance with The Star: Other Compelling Projects The Star Gold Coast Precinct The Star Sydney • Ongoing planning landmark residential and hotel towers adjacent to The Star Sydney, to be operated by The Ritz- Carlton. • FEC’s stake: 33.3%. • Hotel/Residential. Pyrmont Precinct, Sydney • Tw
Slide 40: 2. Review of Operations: Other Businesses
2. Review of Operations Other Businesses The Towers at Elizabeth Quay, Perth 40
Slide 41: BC Group – Strong Growth in Loan Book
BC Group – Strong Growth in Loan Book Latest update Loans and advances • Fast growing platform offering mortgage financing in Australia. A$’M • Aiming to offer same services soon in New Zealand, Malaysia and the UK. • Funding primarily provided by leading financial institutions and 976 institutional
Slide 42: New Business – Far East Vault
New Business – Far East Vault Latest security system: Facial recognition Real time QR codes Email notifications of Palm vein scans 1st Dedicated 5-star vault to use intelligent security every entry and exit technologies in Hong Kong. Other features: • Will start operations in Q3 2020. Up to US$1 mil
Slide 43: 3. Prospects
3. Prospects The Star Residences, Gold Coast 43
Slide 44: Short and Medium Term Outlook
Short and Medium Term Outlook Mitigation Strategies Property Hotel Operations and Car Park Operations and Gaming and for COVID-19 Development Management Facilities Management Entertainment • Implement additional cost • Total attr. GDV of projects • 31 hotels under operation • Continue to evaluate an
Slide 45: Strengthen Sustainable Development Governance
Strengthen Sustainable Development Governance Environment Governance Social Property Development: • Formation of Steering Committee. • Integrated green building elements • Strive to contribute to communities into property design work. • Adoption of Terms of Reference. in which FEC operates while • I
Slide 46: Awards Rewarding Continued IR and ESG Efforts
Awards Rewarding Continued IR and ESG Efforts IR Magazine Awards – Greater China 2019 • Best Overall Investor Relations 9th Asian Excellence Award 2019 2019 5th Investor Relations Awards by HKIRA FinanceAsia's Best Companies Poll 2020 • Tied First for the 30 Years of • • Corporate Governance Awards
Slide 47: Thank You
Thank You Questions & Answers For more information, please contact: Investor Relations Department: ir@fecil.com.hk Or visit the Company’s website: www.fecil.com.hk FEC Official WeChat 47
Slide 48: 4. Appendices
4. Appendices The Towers at Elizabeth Quay, Perth 48
Slide 49: Strong Pipeline for Sustainable Growth
Strong Pipeline for Sustainable Growth Projects under presale Cumulative presales Expected attr. SFA(1) Expected attr. GDV(2) Expected Cumulative presale Notes: Location As at 31.03.2020 (HK$'M) (sq.ft.) (HK$'M) Completion as % of GDV (1) The figures represent approximate saleable 1 West Side Place
Slide 50: Presales Remain Healthy and Provide Visibility
Presales Remain Healthy and Provide Visibility HK$’M Cumulative attributable contracted pre-sales as at 31 March 2019 14,614 During FY2020: - Presales contracted during the year 3,761 - Presales contracted for completed units transferred to inventories (207) - Recognized as revenue (excluding comple
Slide 51: Hotel Operating Performance
Hotel Operating Performance Dorsett Group FY2020 FY2019 YoY change Hong Kong Occupancy rate 70.8% 95.3% -24.5ppts Average room rate (HK$) 578 802 -27.9% RevPAR (HK$) 409 764 -46.5% Malaysia Occupancy rate 65.6% 74.7% -9.1ppts Average room rate (MYR) 197 194 1.5% RevPAR (MYR) 129 145 -11.0% Mainland
Slide 52: 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$'M) (HK$'M) 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 busine
Slide 53: 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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