Singha Estate announces 92% increase in total revenue to THB5.79 billion for 1H2022
The company returns to profit-making for the first time after five-consecutive loss-making quarters, pushing the second half results to surpass the full-year target, driven by 4 businesses across the portfolio together with the new housing project.
Bangkok (August 16, 2022) – Singha Estate Public Company Limited reported its total revenue of 5.79 billion baht in the first half of 2022 (1H2022), jumped 92 per cent YoY. The significant improvement in financial performance was mainly resulted from an increase in revenue across 4 existing businesses and the revenue recognition from sale industrial area for the first-time in the second quarter. Thanks to our strategies during the past 2 years to diversify our investment across all cores and connected businesses. The strategic move has led 2022 revenue to double the performance over the last year, recaching its new high.
An increase in revenue due primarily to the robust performance of hospitality business, reported at 3.761 billion baht, tripled the total revenue from the same period of 2021. This was attributed to the sharp recovery in performance of CROSSROADS Phase 1 hotels together with the UK Portfolio hotels which increased 128 per cent compared to the same period last year and made up to 75 per cent of total revenue from hospitality business. Moreover, the Company foresees the great momentum of the Outrigger Portfolio and Thailand Portfolio hotels which generate revenue from sales and services increased over 8 times from the same period last year, contributed 25 per cent of total revenue from hospitality business. The Company has set the revenue target of those portfolio to reach goal of 35 per cent of its total revenue from hospitality business in stabilized period or more than 4 billion baht. This reflects a positive signal to future revenue growth which can be substantial when tourism sector recovers to surpass pre-pandemic.
At the same time, revenue generated from commercial business in 1H2022 increased 5 per cent YoY mainly from the solid average occupancy rate at 88 per cent. Meanwhile, the Company could achieve the higher average rental rate amidst the challenging situation. Therefore, the revenue from rental and services improved by 132 per cent from the same period last year to 4.371 billion baht in 1H2022. The revenue from sales of real estate also improved to 1.419 billion baht in the said period. The increase was attributed to the recognized revenue from The ESSE Asoke and The ESSE at Singha Complex together with the revenue from sale industrial area in S Industrial Estate Angthong for the first time in the second quarter of 2022.
Mrs. Thitima Rungkwansiriroj, Chief Executive Officer of Singha Estate Plc, or “S”, revealed that the success of business restructuring became fruitful in Q2/2022, particularly the additional investing in the hotel portfolio which could provide a diversified and seasonal balanced portfolio. Tropically the second quarter is considering as the high season of United Kingdom and Fiji, leading the revenue of those portfolio to increased 40 and 100 per cent, compared to the same period last year. Moreover, investing in industrial estate and infrastructure business is helping diversify revenue stream via customer base and generating recurring income in the long run. During the said quarter, Singha Estate achieved total land transfer and realized the revenue from sale industrial area of 77 rais to B.Grimm Power (Angthong). Regarding the accelerated business recovery and the effective cost management, the Company announced its second quarter 2022 financial results, posting a returning to strong profitability at 102 million baht. We are confident that the strong performance will keep up the momentum.
Looking into the remainder of 2022, the financial performance is expected to have a progressive improvement, rising 30 per cent from the first half of the year, benefited by the robust performance of hospitality business and the revenue from sale houses and condominium units. The Company foresees the positive sentiment of operating results in July 2022, showing the average occupancy rate at 70 per cent. We expect the hospitality business to continue its robust recovery particularly in the high travel season of Thailand and Maldives in Q4/2022. Moreover, we continue to uplift the properties in order to strengthen hotel efficiency and increase average room rates (ADR) in the future. Consequently, CROSSROADS hotels and UK Portfolio hotels are expected to enhance ADR to surpass the pre-COVID19 level by 41 and 27 per cent, respectively. Apart from the continuous outstanding performance from CROSSROADS and UK Portfolio, another key driver that will escalate the operating results is from Thailand hotel portfolio, following the fully re-opening the country in July, resulting in SAii Laguna Phuket and SAii Phi Phi Island Village to achieve an occupancy rate of 68 and 63 per cent, respectively. Therefore, with the potential of the company's hotels which based in prime location of the five most popular tourist destinations around the world and the success of the Company’s brand awareness, we are fully confident to the stronger performance of Thailand hotel portfolios, expected to generate nearly double the revenue growth in the second half of the year.
Singha Estate also expects the accelerated transferred activities of the Santiburi the Residences in the second half of the year. Moreover, the Company set target to transfer the new project “Siraninn Residences” by the fourth quarter of the year. This will lead the full-year revenue from residential to grow by 50 per cent YoY or more than 3.3 billion baht in 2022 from the new housing project “Siraninn Residences” which is expected to launch in September this year. The project is located on Pattanakarn 32, one of the most premium locations for urban housing projects today. Siraninn Residences is a two-story horizontal luxury detached housing project, surrounded by quality communities, offering exclusively only 28 units which the estimated price starts from 65 to 180 million baht, and 4 home offices whose price is estimated around 20 million baht each. The company has been receiving interests from customers who have loyalty towards Singha Estate brand. We, thus, confident to achieve the transfer target in Q4/2022, according to business plan.
The Company has set the ambitious target of new project launch of 52 billion baht within 5 years, pushing forward the luxury housing market through three new segments which has estimated price per unit starts from 10 to 100 million baht. Other two segments will be officially launched in 2022. With its current progress of land acquisition, the Company has secured 2 land plots and the remaining target are nearly to be completed for project development which will be ready to launch of 4 projects within 2023. The Company fully expects to acquire another 5-7 land plots per year and will continue to launch the projects with an estimated value of 10 billion baht per year.
“Regarding the progress of long-term lease agreement on the Company’s retail space with S Prime Growth Leasehold Real Estate Investment Trust (SPRIME), on June 24, 2022, the Company has leased the retail space in the Suntowers building to the SPRIME with the transaction amount of 213 million baht, in which the particular retail space has an occupancy rate at 98 per cent currently. The Company strongly believed that the investment of SPRIME is focus on the potential assets that would provide a profitable in the long-term. However, the Company still considers postponing the long-term lease of Singha Complex into SPRIME owing to the fluctuated capital market. As well as the economic situation still under pressure from the higher interest rate, inflation, fuel price, pandemic, and the international political conflicts. However, the Company is confident that the performance of Singha Complex will generate profit from operation around 400 million baht per year,” said Thitima.