Hiap Hoe shutters leisure-business operations, expects virus to weaken H1 2020 performance

PROPERTY developer Hiap Hoe on Thursday said that it expects its financial performance for the first half of 2020 to be "adversely impacted" by the outbreak of the virus, compared to the corresponding period a year ago.

It will cease all leisure-business operations until April 30, in line regulations imposed by the Singapore government on the provision of public entertainment, it said in a statement on Thursday.

The company's website says that its leisure-business properties under its fully-owned subsidiary Hiap Hoe Strategic include SuperBowl Holdings, which manages some 10 integrated sports and recreational facilities such as bowling centres and amusement centres, and holds several investments in commercial properties.

Occupancy rates across its hotels have dropped, and the company also reported weaker operating performances across its portfolio. The mainboard-listed company did not specify the extent to which its occupancy rates and operating performance have fallen.

"The company will implement cost-containment measures, including the temporary closure of rooms and amenities in its hotels and shortening employee work hours.  

"Hiap Hoe will also take the necessary steps to conserve cash flow by postponing non-essential capital expenditures."

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The company attributes its weak performance to increased border restrictions and strict social-distancing measures implemented by governments due to the rapid spread of the novel coronavirus.

However, it said the full extent of the novel coronavirus' impact on the company's financial performance for the first half of FY2020 and beyond cannot be ascertained at this point. 

"The group is keeping a close watch on the development of the Covid-19 outbreak and the company will make further announcements to keep shareholders updated on material developments."

Hiap Hoe's shares closed one Singapore cent lower, or down 1.43 per cent to 69 Singapore cents on Thursday.