GSH swings into 4Q and FY2016 losses

SINGAPORE (Feb 28): GSH Corp, the property developer and owner of Sutera Harbour Resort in Kota Kinabalu, swung into losses of S$3.3 million (RM10.47 million) in the 4Q2016 after revenue fell 69.8% to S$17.7 million from a year ago.

For the three months to December, GSH’s property business contributed S$1.7 million in revenue compared to S$45.4 million a year ago.

Following the first phase of the sales launch of GSH Plaza in FY2015, the group’s strategy is to launch the second phase of sales and leasing at GSH Plaza once the building obtains temporary occupation permit (TOP) in 1Q2017.

GSH’s hospitality business grew by 22% to S$15.9 million from S$13 million due mainly to the increase in room occupancy rates at its two hotels in Sutera Harbour Resort in Kota Kinabalu, Sabah.

Higher administrative expenses of S$6.5 million were incurred in 4Q2016, compared to S$3.1 million in 4Q2015, due mainly to the implementation of a new wage structure as required by the Malaysian authorities for all hotels.

Due to the fall of rental rates in Dubai, the valuation of the group’s investment property in Dubai was reduced by S$2.0 million.

For FY2016, GSH reported a loss of S$3.6 million from earnings of S$16.4 million a year ago. Revenue fell 46.2% to S$87.2 million.

Looking ahead, GSH says slower economic and rising interest rates may continue to weigh on the market. However, with the influx of Chinese investment in Malaysia in the medium to long term, the country’s property outlook looks positive.

For the hospitality industry, GSH continues to stay positive on the hospitality industry given the Sabah state government’s commitments and initiatives for developing tourism.

Shares of GSH closed at 58 Singapore cents. —

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Eversendai slips into the red with RM193 mil 4Q loss

KUALA LUMPUR (Feb 28): Provision for doubtful debts and higher costs caused Eversendai Corp Bhd to slip into the red with a net loss of RM193.08 million for the fourth quarter ended Dec 31, 2016 (4QFY2016), compared with a net profit of RM7.29 million a year earlier.

Revenue dropped 30.3% to RM340.97 million from RM489.32 million in 4QFY2015.

For the full financial year, Eversendai suffered a net loss of RM257.50 million, compared with a net profit of RM55.37 million in FY2015, due to provisions and impairments on fair value of financial assets, provision of doubtful debts, higher costs and low utilisation of the fabrication facility due to the slow recovery of the oil and gas industry.

“This is the first year the company is recording a loss owing to both internal and external factors,” said Eversendai managing director Tan Sri A K Nathan.

“The group has since identified all shortfalls, re-strategised and aligned towards moving out of the losses incurred during the financial year of 2016 with progressive profits projected from the 1st quarter of 2017 onwards,” he said in a statement.

Revenue for FY2016 dipped 11.97% to RM1.57 billion from RM1.79 billion in the previous year.

Of the revenue, 62.1% was contributed by the businesses in the Middle East region, 14.3% by operations in Malaysia, 9.7% by operations in India, 13.4% from the oil and gas segment and the remaining 0.5% from operations in Thailand, the group said.

“To date the group has secured projects worth RM801.4 million for the year 2017, of which RM117.4 million is from the oil and gas sector, bringing Eversendai’s orderbook to approximately RM3 billion,” it added.

The group said it secured RM1.8 billion worth of jobs for FY2016.

On prospects, the group said it is confident to achieve higher revenue and profitability moving forward, particularly with the recovery of the oil and gas industry.

“It has been a tough year for the group, but we are confident we will achieve our target working progressively towards declaring profits.

“The recovery in the oil and gas industry will give us a good push to improve the business further. We know it is going to be upward trends for the Eversendai Group from here on,” said Nathan.

At 4.33pm, Eversendai fell 11 sen or 17.19% to 53 sen, for a market capitalisation of RM456.6 million. —

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Waldorf Astoria, legendary New York hotel, closes for facelift

Waldorf Astoria

NEW YORK (Feb 28): It’s goodbye for now to the grand Art Deco lobby and celebrities crossing paths en route to “The Towers” at the Waldorf Astoria: one of the world’s most luxurious hotels is closing for renovation.

The legendary establishment opened at its Park Avenue location in midtown Manhattan in 1931 with more than 1,400 rooms, the largest — and tallest — anywhere at the time. 

It has hosted a stream of international political leaders, movie stars, tycoons and power players of all kinds for more than 85 years.

From Marilyn Monroe to Grace Kelly, US presidents Herbert Hoover to Barack Obama, as well as global leaders in town for the United Nations General Assembly every year, the Waldorf Astoria has been the place to be.

The hotel is massive, occupying a full city block of prime New York real estate.

Famous for its upscale services, the Waldorf says it invented the concept of 24-hour room service.

The Art Deco style is carried through details down to the door handles in the lobby bathrooms.

However, the grande dame is showing her age.

‘Very, very sad’

Guests have complained about dated rooms, peeling paint and issues with cleanliness.

The hotel’s owner, Anbang Insurance Group, says it will close the hotel for major renovations starting Wednesday. The work is due to last two to three years.

The Chinese company bought the historic gem in 2014 from the Hilton hotel chain for US$1.95 billion (RM8.66 billion).

Although it has released no official renovation plan, Anbang is expected to convert a large number of rooms into luxury apartments with boutique stores on the ground floor, leaving only a small part of the building as a hotel.

The façade — which became an official landmark in 1993, joining the Empire State Building and Brooklyn Bridge — is in no danger.

But the interior is not protected under the landmark designation, and some are worried that such treasures as the four-story grand ballroom and sprawling mosaic by the French artist Louis Rigal decorating the entrance will disappear forever, despite Anbang’s promise to consult preservation officials.

“I’m very, very sad,” said 70-year-old Donna Karpa from Washington, a regular from the age of five who was in town for the weekend.

“I’d come every year as a little girl,” she said. “We would come with my family for Christmas and we’d see the Rockettes (dance show) and we would go ice skating at Rockefeller Center. It’s great and the location is wonderful!”

Sandra Thomson, a Briton from Birmingham, left enchanted after six days in the hotel with her family to celebrate her daughter’s 18th birthday.

“We just absolutely loved it!” she said. “I love the architecture, all the Art Deco and also the history. It’s just an icon of America, isn’t it? And you want to experience it.”

‘All the one-percenters’

Besides the guests’ many wows, the hotel’s employees — 1,400 of them in total — chiefly remember the rich, famous and powerful who have frequented the Waldorf every day.

A stay by Angelina Jolie and Brad Pitt — one of Hollywood’s most glamorous couples until their breakup last year — is still fresh in everyone’s minds. But each has a favourite memory of a striking encounter.

Michael Romei, head concierge of the 42-story central tower known as the “The Towers” — a hotel-within-a-hotel boasting the most luxurious suites — has stopped counting the celebrities he’s met during his 23 years of service.

His best memory: “Being blessed by the Dalai Lama.”

“This is such a great place to work!” said Paul Hopkins, who has been a bellhop here for a dozen years. “Right in the elevators, you can meet so many celebrities, all the different presidents, lots of CEOs, all the one-percenters!”

Some criticise Obama’s break with decades of tradition in 2015 following Anbang’s takeover by deciding not to stay at the Waldorf and to no longer put up US diplomats here during the UN’s General Assembly. 

Ivona — a hostess at the hotel’s Peacock Alley restaurant who declined to give her last name — called it a “slap in the face.”

But just like many of the guests, the hotel’s employees agree that even if they adore the place, it’s time to refresh.

“We love the nostalgia, but it’s kind of dated,” said Ron Ruth, an aircraft mechanic from San Francisco who came for his 23rd wedding anniversary. 

“The heating and the cooling, and the bathrooms are really small, too small for my wife!” 


Boustead 4Q earnings surge on lower operating costs, declares 3.5 sen dividend

KUALA LUMPUR (Feb 28): Boustead Holdings Bhd said its net profit for the fourth quarter ended Dec 31, 2016 (4QFY2016) swelled by 28 times to RM120.7 million or 5.95 sen per share, from RM4.2 million or 0.26 sen per share a year ago, due mainly to a reduction in operating costs.

Operating costs fell 7.58% to RM2.25 billion from RM2.43 billion in 4QFY2015, resulting in stronger profitability despite a marginal 0.82% drop in revenue to RM2.42 billion from RM2.44 billion.

The diversified group declared a fourth interim dividend of 3.5 sen per share, payable on March 28. This brings the total payout for FY2016 to 17.5 sen.

In a filing to Bursa Malaysia, Boustead said full year (FY2016) net profit saw a 28-fold rise to RM369 million from RM13.2 million in FY2015. Earnings per share shot up to 20.03 sen from 0.8 sen.

Revenue, however, was down 3.36% to RM8.37 billion from RM8.66 billion.

Moving forward, Boustead said it expects FY2017 to be another challenging year, both globally and domestically, due mainly to uncertainties surrounding global economy, contagious effect of Brexit in the European market, future changes in US policies and other geopolitical risks.

“On the domestic front, the economy is expected to expand between 4% and 5%, notwithstanding the depreciation of ringgit and volatile commodity prices, which may impede growth.

“The diversified nature of the group’s business in six segments of Malaysian economy would augur well for the group,” it added.

In a related statement, Boustead deputy chairman and managing director Tan Sri Lodin Wok Kamaruddin said the group’s strong foundation will enable it to remain resilient and deliver “commendable earnings” in the face of the challenging economic climate.

“Although the tough economic landscape is set to persist in the year ahead, we are optimistic that we will be able to deliver sustained earnings,” he said.

“We are focused on reinforcing our strong fundamentals and capitalising on key growth drivers within the group’s six core businesses, while tapping into viable opportunities for growth moving forward,” he added.

Boustead’s share price was up one sen or 0.35% at RM2.83 at 3.32pm, giving it a market capitalisation of RM5.7 billion. —

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Help for first-timers buying resale HDBs, but no easing of cooling measures


ON Feb 20, Finance Minister Heng Swee Keat announced in his Budget statement that, with immediate effect, the Central Provident Fund’s (CPF) Housing Grant had been raised to $50,000 for first-timer couples buying four-room or smaller HDB flats from the resale market. For those who purchase five-room or bigger flats, the grant has been raised to $40,000.

The CPF Housing Grant was previously capped at $30,000. Including the Additional CPF Housing Grant, capped at $40,000, and the Proximity Housing Grant, capped at $20,000, first-timer couples can now receive up to $110,000 in subsidies.

According to Cushman & Wakefield Research director Christine Li, the move is timely, as a large volume of build-to-order HDB units, totalling about 18,000 units, reached the end of their Minimum Occupation Period as at end-2016. This is 80% higher than the number of units that reached MOP in 2015.

“The grant can therefore help soak up additional HDB resale supply, particularly for those who need to dispose of resale flats after they have taken pos­session of new BTOs, executive condomi­niums and private properties,” says Li.

HengRHB Research expects the move to translate into a slight boost in demand for resale HDB units and help stabilise resale prices. It will also alleviate demand pressure on new BTO launches, especially in mature estates.

ERA key executive officer Eugene Lim agrees. He expects resale HDB transaction volume “to receive a good boost, as resale flats are now cheaper, and this might swing more purchasers towards a resale flat instead of having to wait three years or so for a BTO flat”.

The Budget did not include the easing of property cooling measures. Minister for National Development Lawrence Wong signalled in an interview with Bloomberg TV on Feb 21 that the residential property curbs were expected to stay for some time.

Wong said the cooling measures had “helped achieve a soft landing in the property market” and demand remained “very resilient”. He also added that the government was studying measures to boost revenue, including higher taxes, to help ease pressure on the budget as spending increases.

Earlier this month, president and CEO of CapitaLand Lim Ming Yan said the cooling measures are expected to stay in place for at least another year. “We see volume picking up and price declines have slowed. We see this trend continuing for 2017. There is no compelling reason for the government to make major changes at this point,” he said.

Private-home prices declined 3% in 2016, in a third consecutive year of decline. As no changes were introduced to the existing property cooling measures, RHB Research maintains its expectation of a 3%-to-7% decline in residential property prices this year.

This article first appeared in The Edge Property Singapore, a pullout of The Edge Singapore, on Feb 20, 2017.

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Mah Sing’s 4Q net profit falls 24% to RM85.61 mil

KUALA LUMPUR (Feb 28): Mah Sing Group Bhd’s net profit for the fourth quarter ended Dec 31, 2016 (4QFY2016) dropped 24% to RM85.61 million, from RM112.89 million a year ago, mainly due to lower contribution from its M City development in Jalan Ampang and Icon City in Petaling Jaya that were at the tail end of development in 2016.

Revenue had also dropped 4% to RM742.18 million in 4QFY2016, from RM773.14 million a year ago.

For its full year (FY2016), Mah Sing made a net profit of RM361.36 million, which is 6.5% lower from RM386.68 million a year ago. Revenue came in 4.9% lower at RM 2.96 billion, versus RM3.11 billion a year ago (FY2015).

It proposed a final dividend of 6.5 sen per share.

In a statement, Mah Sing’s group managing director Tan Sri Leong Hoy Kum said the company intends to leverage on its healthy balance sheet to pursue new, strategically-located landbanks.

“Our cash pile and low net gearing allows us to look out for potential land acquisitions, joint ventures and investment. Our focus is mainly in Greater Kuala Lumpur, but we are also open to other high growth locations in Malaysia,” he said.

The group currently has a cash pile of RM923.8 million with a low net gearing ratio of 0.02 times.

On its prospects, Mah Sing said it achieved approximately RM1.78 billion sales in FY2016 by offering products in line with market demand, namely beginner homes for the mass market and also upgrader homes in selected locations.

It said moving forward, it plans to focus on building more accessible homes.

“As we enter into the new financial year, we will continue to adopt a strategic approach and phase out our launches. The focus will be on accessible homes, with 73% of our residential sales target price point at RM700,000 and below,” said Leong

Currently in the pipeline for the group are a new township in Rawang, final tower of D’sara Central, Residensi Seri Wahyu in Lakeville Residence, Cerrado Block C and D in Southville City@KL South, landed link homes in Meridin East, Johor; and serviced apartments in Southbay City, Penang.

At the close of the morning session today, Mah Sings shares closed up one sen or 0.69% higher at RM1.46, with a market capitalisation of RM3.52 billion. —

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I-Bhd to launch ‘Internet of Things’-ready serviced residences in June

DoubleTree by Hilton

PETALING JAYA (Feb 28): Property developer I-Bhd is planning to launch “Internet of Things” (IoT)-ready serviced residences in i-City, Shah Alam in June, said marketing director Monica Ong.

With an estimated gross development value (GDV) of RM124 million, the serviced residences will sit on top of the upcoming DoubleTree by Hilton, she told

The hotel will occupy the ground floor to level 23 of the tower while the serviced residences will start from level 24 to level 42.

The serviced residences, which has a working name of “Converse @ i-City” will comprise 200 fully furnished and IoT-ready units with built-up ranging from 480 to 880 sq ft. Prices start from RM480,000 per unit.

In September 2016, the property developer partnered with Huawei to implement the smart city and IoT-ready home concept in i-City. Some of the enhancement features in Converse @ i-City are 100MB internet connectivity and thumb print door access to each residential unit, in addition to smart parking and traffic management control.

“The serviced residences above DoubleTree by Hilton will be launched in June 2017, the target buyers are young professionals who value brand association and those ‘early tech adopters’,” said Ong, adding that the development is set to be completed in 2019 together with the hotel.

As for the 23-storey DoubleTree by Hilton, the construction of the hotel started in 2016 and piling work is in progress, she said.

“The concept follows that of Hilton Worldwide guidelines.  However, this establishment will have enhanced state of the art technology — guest room management system for better guest experience,” she shared.

With a gross development value (GDV) of RM250 million, DoubleTree by Hilton will offer 300 rooms, it is targeted to be opened in 2019.

Ong said the emergence of DoubleTree by Hilton fits i-City’s development as both a real estate development and tourist destination.

As i-City is an international business hub during the day and a lifestyle haven at night, DoubleTree by Hilton would cater to the demands of the business community and travellers who are attracted to the leisure activities in i-City, she continued.


“We already have a 3-star Best Western Hotel, which was opened since 2015, in i-City, and now we have a 4-star DoubleTree by Hilton coming up in 2019 and a 5-star hotel in the pipeline.”

The Best Western Hotel is recording an average occupancy rate of more than 80% and I-Bhd is confident the response for DoubleTree by Hilton will be similar, she noted.

“The Hilton group has recognised Shah Alam as one of the growth centres in the Klang Valley and the partnership with Hilton Worldwide will enable i-City to leverage on its expertise in providing hotel development and management services,” she said.

Going forward, Ong pointed out that besides the serviced residences above DoubleTree by Hilton, there will be another launch by I-Bhd between November this year and the first quarter of 2018. 

“The take-up for i-City residential properties that already launched has been good. In the next 12 months, we are scheduled to hand over another 3,360 units in addition to some 1,000 units that were completed since 2010.”

Meanwhile, I-Bhd’s 8 Kia Peng in Kuala Lumpur has been recording a satisfactory take-up rate with most of the buyers being from the neighbouring countries, she added.

“Our focus for 8Kia Peng sales is the international market. However, in light of the global market sentiment, we are currently re-strategising our marketing plans.”