Message to Shareholders

Dear Shareholders,

Spring has come and with it, budding and blossoms!

This symbolizes not only the dawning of the post-Covid era, but the tentative recovery of GSH.

Our Hospitality business has begun to recover, especially after the lifting of global movement constraints and easing of health protocols, in recent months.

This also bodes well for our Property business, with labour mobility helping construction and the resumption of travel enabling site visits and sales.

Hospitality

The gradual return of travellers to Kota Kinabalu in the second half of 2022, was a turning point for Sutera Harbour Resort. The Hospitality business saw a surge of 83.9% in revenue to S$32.1 million, and managed to narrow the loss after tax of S$9.1 million in FY2021 to S$6.3 million in the latest full-year. As China and Hong Kong reopen their borders, in early 2023, the prospect of further growth in this segment is bright.

Property

In FY2022, the Property sector saw a dip in sales by 12.1% to S$41.2 million, as sales activities were hampered by the Chinese market, under its zero- Covid policy. Moreover, successful construction of Eaton Residences in Kuala Lumpur and receipt of the Certificate of Practical Completion (CPC) in FY2021, meant there were fewer sales contributions in FY2022.

In line with the resultant lower revenue, the Property sector saw profits after tax decline 26.3% to S$6.7 million, for the full year. The pace of construction of our Coral Bay project in Kota Kinabalu is expected to pick up this year and we should see more contributions and sales for the project.

As for China, our Chongqing project has progressed steadily, despite the negative impacts of the pandemic. Thanks to its strategic location and excellent quality, construction of the first phase of residential units, is on target for completion, in the second quarter of 2023. As for the hotel, it is planning for a second quarter opening, this year as well.

Financial Highlights

Overall for the year just ended, the Group managed to narrow its net loss attributable to shareholders by 11.4%, from a loss of S$21.0 million in FY2021, to S$18.6 million in FY2022. This was achieved on the back of a 10.1% decrease in Group Revenue to S$86.1 million.

As of 31 December 2022, the Group turned in a loss per share (based on the weighted average of 1,956,934 shares) of 0.95 Singapore cent, while net asset value per ordinary share stood at 15.25 cents. Net debt-to-equity ratio (excluding non-controlling interests), rose to 1.23.

During the year in review, the Group’s operating activities generated net cash of S$65.0 million which contributed to the 48.7% rise in cash, cash equivalents and time deposits to S$59.5 million.

Looking Ahead

We envisage that China’s reopening for international travel, will be very positive for the Group. It will spur sales activities for our Property business, while providing the impetus to further boost occupancy rates at our hotels in Kota Kinabalu.

Appreciation

As always, we are ever grateful for the support of all our stakeholders and we hope to be able to see the Group turnaround soon. For the moment, we think that it would be prudent to conserve cash, while our businesses stabilize and recover.

We also deeply appreciate the hard work of our Board of Directors, Management and staff. In particular, we would like to thank our Vice Chairman and Lead Independent Director, Mr Francis Lee; Independent Director Ms Huang Lui and Non-Executive Director Ms Juliette Lee, for their tireless services and invaluable contributions to the Board. All three of them will be retiring at this upcoming Annual General Meeting.

Thank you all for standing together with us, during such extremely challenging times. You can be sure that we will work even harder in the coming years, to take the Group to new heights.

See you at our Annual General Meeting, at 10.30am, on Friday 28 April 2023!

Dr Sam Goi Seng Hui
Executive Chairman

Gilbert Ee Guan Hui
Chief Executive Officer