Wee Hur incurs first loss in over 40 years of business, hard hit by the pandemic

WEE Hur Holdings reported a loss of about S$25 million - its first red ink in over 40 years of business - for the first half of FY 2021, as the mainboard-listed property developer and builder has been hard hit by the pandemic.

In contrast, it posted S$14.3 million in net earnings for H1 FY 2020 ended June.

Executive chairman Goh Yeow Lian commented: "Having been in business for more than 40 years, this is the first time the group is losing money... With more countries accelerating the vaccination plan, we are optimistic that the impact of Covid-19 will be reduced when more countries are lifting their travel restrictions in the near future."

The company's revenue dropped by 15 per cent to S$85.5 million, compared to S$100.8 million for H1 FY 2020.

The company's purpose-built student accommodation (PBSA) and construction businesses both incurred losses while the gain from the worker dormitory business declined substantially, according to the financial results released on Friday night.

The company stated that its construction business will complete projects nine to 12 months late, or even longer. Additional costs will be incurred due to the prolonged construction period, increase in labour costs, escalation of material prices and compliance of stringent safe management measures.

Its Tuas View Dormitory's capacity was reduced by almost 30 per cent, after the number of beds allowed for occupation was cut from 16,800 to 11,808 under the new requirement for workers' dormitories.

Moreover, the reduced numbers of foreign workforce and competition from newly built temporary worker dormitories led to a low occupancy.

The PBSA business in Australia had not been spared either, due to border closures since March 2020. The occupancy rate for its PBSA properties that are in operation decreased to around 36 per cent, but Wee Hur did not disclose the pre-pandemic occupancy rate in the financial results.

Its newly built PBSA in Adelaide has been closed since the beginning of the year so as to keep operating costs low. The company sees Australia's border closure to be in place for the whole of 2021 against the backdrop of the Delta variant and low vaccination rate there.

The company, however, reported that its residential property business is holding up well, and will be launching Bartley Vue, a 115-unit condominium in Bartley in September 2021.

Wee Hur's net asset value was S$0.42 per share as at June 30, marginally lower than the S$0.45 as at Dec 31, 2020. Loss per share was 2.71 Singapore cents, compared to an earnings per share of 1.56 cents for H1 FY2020.

Despite it posting a loss, there will be an interim dividend of 0.2 Singapore cent payable on Sept 10.

The counter closed flat at S$0.205 on Friday, before the financial performance went public.

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