Far East Orchard posts Q1 loss of S$700,000 as pandemic hurts hotel revenues

MAINBOARD-LISTED property player Far East Orchard sank into the red in the first quarter, as the Covid-19 pandemic battered its hospitality business.

Net losses came to S$700,000 for the three months to March 31, reversing earnings of S$900,000 in the year-ago period, the group said in a business update on Thursday.

Its revenue sank by 29 per cent year on year, to S$27.6 million, which Far East Orchard blamed in part on lockdowns in Australia and low tourist arrivals in Singapore.

The decline came in spite of hotel openings during the quarter - such as The Clan Hotel in Singapore, the first overseas property under the group's Quincy brand in Melbourne, and the launch of premium brand A by Adina through a joint venture in Canberra.

Far East Orchard, which owns and runs hospitality properties across Europe and the Asia-Pacific, noted that its year-on-year losses were compounded by the year-ago base. The impact of the pandemic did not kick in until end-March 2020, even as the group recognised contributions from a property joint venture in Woodlands in Q1 2020.

Still, the British purpose-built student accommodation (PBSA) business was highlighted as a bright spot, especially with contributions from a new acquisition in Bristol. The PBSA portfolio had occupancy of more than 80 per cent as at March 31, 2021. Demand is expected to be sustained, including pre bookings for the next academic year.

Far East Orchard group chief executive Alan Tang said that the industry "faces a long and challenging road to recovery" as international travel remains extremely limited. "Nonetheless, we are taking a long-term view on the situation, and continuing to deepen our presence in key markets for hospitality and PBSA," he added in a statement.

Its shares closed at S$1.14, up by S$0.01 or 0.89 per cent, before the news.