Far East Orchard reported Wednesday its first half net loss — or the loss attributable to equity holders — widened to S$1.9 million from S$900,000 in the year-ago period as the Covid-19 pandemic continued to weigh on the hospitality business.
Revenue for the January-to-June period fell 15 percent on-year to S$54.9 million, the property and lodging company said in a filing to SGX.
The loss after tax for the six-month period was S$5.9 million, narrowing slightly from S$6.0 million in the year-ago period, the filing said.
“The group’s performance continues to be materially impacted by the Covid-19 pandemic,” Far East Orchard said in the statement.
“In particular, the hospitality business remains the hardest hit as ongoing lockdowns and border closures impeded international travel and tourism. The financial impact would have been more severe if not for the continued contracted business of hotels in Singapore for the use as government isolation facilities, and corporate accommodation requirements for foreign workers,” the company said. “Various government support grants, most of which ended by June 2021, had also partially mitigated the impact.”
Far East Orchard added that operating losses were mitigated by contributions from the purpose-built student accommodation (PBSA) segment in the U.K., including the full six-month contribution from PBSA asset King Square Studios acquired in November 2020.
The U.K. PBSA portfolio maintained an occupancy level over 80 percent as of end-June as the country is seeing record high university applications for the upcoming academic year, the company said.
The company’s outlook was cautiously optimistic.
Alan Tang, group CEO, pointed to spikes in community Covid cases and new Covid variants globally.
“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,” Tang said in the statement. “The resilience of our performance is also underpinned by our commitment to executing its lodging platform strategy, through selective and prudent expansion of its hospitality and PBSA portfolios, while continuing to exercise prudence in managing our resources.”
Far East Orchard said it had continued its expansion plan, with the hospitality arm, Far East Hospitality, opening three hotels in the first half: The Clan Hotel in Singapore, the Quincy Hotel Melbourne in Australia and the Far East Village Hotel Yokohama in Japan.
Its Australia joint venture, TFE Hotels, launched its “A by Adina” hotel brand earlier this year, opening A by Adina locations in Canberra and Sydney, the statement said. In addition, Far East Orchard is slated to open a fourth hotel on Singapore’s Sentosa Island in the second half.