Far East Orchard reports 9M21 net loss widened as hospitality segment weighed

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Far East Orchard reported Tuesday its net loss for the first nine months of the year widened to S$12.6 million, from S$6.3 million in the year-ago period as Covid-related lockdowns and tightened restrictions continued to weigh on the hospitality segment.

“The hospitality business segment, particularly in Australia with its extended lockdowns in the third quarter, encumbered the group’s performance due to the ongoing and resurgence of Covid-19. Australia dollar also weakened against Singapore dollar,” Far East Orchard said. That resulted in an exchange loss of S$5 million for the nine-month period, compared with a year-ago gain of S$5.9 million, the company said.

“The losses were cushioned by operating profit from the PBSA [purpose-built student accommodation] business segment, rental income from medical suites, businesses from government isolation and movement control order (MCO) in Singapore, as well as various support from government grants during the period,” Far East Orchard said.

Revenue for the January-to-September period dropped 10.2 percent on-year to S$75.4 million, the property and hospitality company said in a filing to SGX.

In the third quarter, Far East Orchard opened its fourth hotel, the 191-key Oasia Resort Sentosa on Singapore’s Sentosa Island, marking the company’s first spa resort foray. The Australia joint venture, TFE Hotels, opened the Adina Apartment Hotel in Munich, Germany, the filing said.

Outlook

Alan Tang, group CEO of Far East Orchard, said the company was still trying to minimise pandemic-related disruptions.

“Even with the progressive easing of restrictions, recovery will be gradual and will take time. The two core pillars of the hospitality and PBSA in our lodging platform strategy continue to be effective in supporting our pursuit of the diversification strategy,” Tang said in the filing.

“The wellness industry took off during this period, and the launch of Oasia Resort Sentosa was timely,” Tang said. “For PBSA in the U.K., we expect rising demands from international students. We are optimistic that the demand will persist and will continue to exercise prudence while looking for opportunities to expand this business segment.”

Read Far East Orchard’s filing to SGX.