Far East Orchard's half-year net loss widened to S$1.9m

FAR East Orchard's net loss for the half year ended June 30 widened to S$1.9 million from S$853,000 the previous year as the pandemic continues to weigh on its hospitality business amid persistent lockdowns and border closures.

Revenue was 15 per cent lower to S$54.9 million from S$64.9 million the previous year while loss per share stood at 0.41 Singapore cent versus 0.19 cent the previous year.

The decrease in revenue from its hospitality business was partly cushioned by higher revenue from the purpose-built student accommodation (PBSA) properties in the UK, said Far East Orchard in a press statement on Wednesday. This included the full six months contribution from a PBSA asset, King Square Studios, acquired in November 2020.

As at June 30, the group's PBSA portfolio in the UK maintained an occupancy level of over 80 per cent. UK continues to see a record high university application for the academic year 2021/22.

With the easing of restrictions on in-person teaching and learning, universities have been able to structure their courses without constraints, said the group in its financial statements.

The group therefore remains confident of the PBSA demand and expects the pace of booking to pick up from July 2021.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The financial impact was also partially offset by the continued contracted business of hotels in Singapore to be used as isolation facilities and corporate accommodation requirements for foreign workers. Various government support grants also helped though most of the grants ended by June 2021.

Despite the challenging operating environment, the group had pushed ahead with its expansion plans for the first half of the year.

Its hospitality arm, Far East Hospitality, had opened three new hotels across Asia Pacific including The Clan Hotel in Singapore, Quincy Hotel Melbourne in Australia and Far East Village Hotel Yokohama in Japan.

Its joint venture in Australia, TFE Hotels, launched the A by Adina hotel brand in February with the opening of A by Adina, Canberra. It was followed by the completion and opening of the A by Adina, Sydney in April.

Meanwhile, its fourth new hotel - Oasia Resort Sentosa - at Sentosa Island is also slated to open in the second half of the year.

Group chief executive officer of Far East Orchard Alan Tang said in a press statement that the return to normalcy is an "arduous journey". The team had, however, responded with efforts that have helped cushion the impact of the pandemic on the hospitality business, he said.

"We expect that Covid-19 will continue to impact the group's performance. Taking a long-term approach, we remain hopeful that global tourism will slowly but surely improve as vaccination rollout progresses globally," he added.

Shares of Far East Orchard ended Wednesday flat at S$1.13.