Revenues generated from the Singapore Flyer were 33% higher than the year-ago period 

 

TOURIST attraction developer and operator Straco : S85 0% has posted a 64.5 per cent increase in net profit to S$10.5 million for the first half ended Jun 30, up from S$6.4 million in the previous corresponding period.

 

In a bourse filing on Monday (Aug 12), the group attributed this to a revival in the tourism industry, saying that it received 13 per cent more visitors than the year-ago period, and that all of its attractions were profitable for the six-month period.

 

Straco executive chairman Wu Hsioh Kwang said: &ldquo In this challenging economic environment, domestic tourism has accounted for most of our improved China revenue. We remain cautiously optimistic about the tourism recovery in China.&rdquo

 

Operating revenue grew 11.9 per cent to S$35.9 million, up from S$32.1 million in the previous corresponding period.

 

Revenues from its attractions in China were around the same level as H1 2023, it noted, while revenue from the Singapore Flyer came in 33 per cent higher.

 

Earnings per share for the period increased to 1.23 Singapore cents, from 0.75 cent.

 

The company did not declare an interim dividend, as it &ldquo intends to conserve cash&rdquo and its practice is to recommend final dividend payment annually after the close of its fiscal year.

But it cautioned that the pace of recovery in China remains moderate due to reduced consumer spending

 

TOURISM facilities operator Straco Coproration reported a net profit of S$5 million for its first quarter ended Mar 31, 2024, more than triple the S$1.6 million recorded in the previous corresponding period.

 

This was due to the full resumption of the Singapore Flyer&rsquo s operations in the first quarter, as well as higher visitor numbers for the group&rsquo s attractions in China, the mainboard-listed company said in a voluntary business update on Wednesday (May 29).

 

In the year-ago period, rides on the Singapore Flyer, which it operates, were suspended for 27 days for spoke cables replacement works and daily operation hours had not fully resumed, the company noted.

 

Revenue for the first quarter grew 38.2 per cent to S$17.3 million, from S$12.5 million a year earlier. Meanwhile, operating profit more than doubled to S$7.4 million, from S$3.1 million the previous year.

 

But while the group has recorded &ldquo significant improvement in profitability&rdquo , Straco cautioned that the pace of recovery in China remains moderate &ldquo as consumers have reduced spending due to persisting challenges in the macro environment&rdquo .

 

TOURISM facilities operator Straco Corporation on Thursday (Feb 29) recorded a net profit of S$19.3 million for the second half of 2023, reversing from a S$2.3 million net loss in the year-earlier period.

 

This came as revenue surged 158.3 per cent to S$50.1 million, from S$19.4 million the year before.

 

The company, which operates the Singapore Flyer, attributed the income surge to the 2022 financial half&rsquo s low base. That was when Chinese municipal authorities were still imposing strict Covid-19 measures, it noted.

 

It pointed out that revenue generated by its attractions in China were significantly higher due to a jump in visitor arrivals during the summer holidays and National Day golden week holidays as domestic tourism recovered strongly and returned to pre-Covid normalcy.

 

The group also reported higher revenue from the Singapore Flyer, on a rise in ticket revenue from the tour group segment as international tourist arrivals continue to recover and ride operations gradually resumed to normal operating hours.

 

Formula1, as well as an increase in net rental income from retail leases and event space rental, lifted income as well, the company said.

 

Overall, the company&rsquo s attractions hosted more than two million visitors in the second half, 216 per cent higher than the corresponding period, which saw just about 650,000 visitors.

 

The group meanwhile noted that its other income for the second half rose on higher amounts from government grants including the wage support grant and claims corresponding to the Singapore Tourism Board&rsquo s marketing partnership programme.

 

Income from concessionaire sales and interest income rose as well.

 

For the full year, the company&rsquo s income came in at S$82.1 million, 191 per cent higher than FY22 when there were several disruptions to operations at its attractions, including a three-month suspension of rides on the Singapore Flyer due to a technical issue.

 

The board has proposed a first and final cash dividend of 1.5 Singapore cents per share, and a special cash dividend of 0.5 cents per share for the financial period.

 

The total dividend proposed is double the one cent per share declared this time last year.

With the free 30 days visa travel just effected, business at the Singapore Flyer likely to jump with the influx of visitors

STRACO: Aiming to unleash great potential of Singapore Flyer

Singapore Flyer: The loan that Straco took to buy it in 2014 has been fully repaid.&bull The iconic Singapore Flyer is a work in progress. You read that right. It' s not a passive investment sitting at the edge of Marina Bay. The owner, Straco Corporation, is actively working on transforming it into a greater asset. &bull That was what two key insiders let on in a radio interview this week. &bull   Below we run excerpts (edited for brevity) of the session fronted by Straco' s CFO, Amos Ng, and Senior Vice President (Corporate Development & Risk Management) Sean Wu. &bull   Post-pandemic,  Straco (market cap: ~$400 million) looks to be a  turnaround story  after its 3Q2023 net profit came in at  S$16.3 million. It ended that quarter with net cash of  $165.92 million, up from S$143 million as at end-2022.

Q: How would you describe your value proposition and business model?

Sean:  To put it succinctly, I would say that our value proposition is the offering of a memorable attraction experience made possible by thoughtful design, curated content, and interactive technology.

In terms of our business model, our main source of revenue would be our ticket sales, which is supplemented by F& B and retail income. In this business, the upfront capex and ongoing running costs are high.

So you really need to ensure a quality product that commands a minimum ticket price and you also need to have a critical mass of tourists with the purchasing power to make it viable in the long run.  Location is really important to us and you' ll notice that our assets are all located in first-tier cities in China and Singapore.
 

Q: In terms of business model, can I say that it is more of a company that works on the ticketing to retail customers?

 
Sean:  Definitely. And for the most part, we will be focusing on the free individual travelers who pay the full ticket price rather than tour groups.

 

Q: We talked about the Singapore Flyer. Your Shanghai Ocean Aquarium and Underwater World Xiamen, they are all located in China. Why is this the case? And to what extent can that be attributed to the roots of the firm?

 

Amos:  Though a Singapore-based company, the group started out in China, seizing the opportunity following the opening up of China in the 80s. Some of your listeners may not know that initially there was a Temasek linked company that was a founder-shareholder of the group, but they' ve divested its shareholding prior to listing.

Shanghai Ocean Aquarium is located across The Bund and next to the Oriental Pearl TV Tower. 95% of the aquarium' s visitors are China-based. 

The group' s first success was its flagship, the Shanghai Ocean Aquarium, next to the Oriental Pearl TV Tower. Shortly after the aquarium' s soft launch in 2002,  we were faced with SARS and our team was involved in implementing all the precautionary measures and chief among them were the thermal scanners at the entrance. 

Fortunately, SARS came and went within a year.  In year 2020, the group faced the challenging COVID-19 which brought everything to a standstill. But having the earlier SARS experience, despite  the protracted resurgence and extended periods of lockdown, I think we weathered the storm well, due to our financial discipline, strong balance sheet and dedicated workforce.

 

Q: What is the scale of Straco Corporation' s operations right now, how many geographical markets are you guys in in total, which is the most important market financially and the role of Singapore in this regard?

 

Sean:  In Singapore, we have the Singapore Flyer and in China we have three attractions namely 2 aquariums in Shanghai and Xiamen respectively and we also have a cable car project in Xi' an near the site of the Terracotta Warriors.

" I think if we are able to fully realize our aspirations for the Flyer in the form of asset enhancements, I believe it will definitely take us to the next level of market visibility and growth." -- Sean Wu

Financially, China still holds the lion' s share of our revenue at around 2/3, but we believe that the Singapore Flyer has huge potential to be a vibrant new precinct for our local tourism industry.

I think if we are able to fully realize our aspirations for the Flyer in the form of asset enhancements, I believe it will definitely take us to the next level of market visibility and growth.
 

Q: You said that there is tremendous growth potential for the Singapore Flyer, especially with asset enhancements. Tell us a little bit more about that.

 

Sean:    We bid for the Flyer because we we saw this potential to redevelop it and I think within two years of taking over, we had already gone into the deep end of conceptualizing the next stage of development. We' ve already engaged an award-winning architect to do the stage two design of our terminal building, which is the building just under the Flyer itself.
 

" Allow me to just clear one misconception of the investing public about our acquisition of Singapore Flyer. Many people thought that we were actually buying a lemon or we were doing national duty, but far from it. I mean, we saw the potential of this iconic attraction." -- Amos Ng

Of course in terms of the theming and the kind of activities that will be included in the future, we also done done  a big revamp of that and we are currently in talks with the authorities to see whether this would be viable and and see how how they can meet us somewhere in terms of the support that they can give us.
 

Amos:  Allow me to just clear one misconception of the investing public about our acquisition of Singapore Flyer. Many people thought that we were actually buying a lemon or we were doing national duty, but far from it.

I mean, we saw the potential of this iconic attraction and fast forward, I' m pleased to say that we have repaid the bank loan that we took to acquire the Singapore Flyer  and we we will probably realize the full potential going forward.

 

Q: Let' s take a look at the financials. Straco reported  $16.3 million  net profit for the third quarter of FY2023, and the numbers came after the firm swung into the black in H12023 on the back of China' s reopening and higher Singapore Flyer revenue. How would you assess your financial performance so far? Has the pace of recovery in China been to your expectations?

 

Amos:  Allow me to put things in perspective. Over the three years of COVID pandemic from 2020 to 2022, the group made a cumulative loss of just  $215,000. 

And during these three years, we' ve also generated net cash, net operating cash flow, of  $17.77 million. So I must say that we have weathered this storm pretty well and showed the robustness of our business model.

You asked about the outlook for 2024  -- I must say that the our local teams are still quite optimistic about 2024. I mean, the  local management teams of all our subsidiaries.    And they have actually put up a growth budget, much to the delight of our board.


» There' s a lot more from the radio interview which you can listen  here.   

 

Straco Corporation S85 0.00% has reported earnings of $16.3 million for the 3QFY2023 ended Sept 30 with China&rsquo s post-Covid reopening providing a significant boost.

 

In comparison, the company reported earnings of just $175,000 for 3QFY2022.

 

Revenue for 3QFY2023 tripled y-o-y to $35.5 million, compared to $11.7 million the same period last year.

 

For the quarter ended Sept 30, Straco&rsquo s China businesses reported significant improvements in revenue and profitability compared to the same period last year, with the return of crowds during the summer holidays in China a major contributing factor.

 

The company notes that there were no business disruptions during the quarter and that China&rsquo s transition to a post-Covid era since the last quarter of 2022 has been positive.

 

Meanwhile, Straco&rsquo s Singapore Flyer also reported significantly higher revenue in 3QFY2023 compared to the same period last year as international visitors returned to Singapore after all Covid-related border restrictions were lifted by the government on Feb 13.

 

Straco&rsquo s net cash generated from operating activities amounted to $25.29 million in 3QFY2023, compared to $4.3 million in 3QFY2022 

 

Year-to-date, the company&rsquo s revenue for the first three quarters of 2023 increased by 228.7% y-o-y to $67.54 million. Its earnings for the 9MFY2022 ended Sept 30 came to $22.7 million, compared to a net loss of $8.3 million for the first three quarters of FY2022, which experienced a much tougher operating environment.    

 

As at Sept 30, Straco&rsquo s net cash holdings stood at $165.9 million.

 

STRACO Corporation, which operates tourism facilities such as the Shanghai Ocean Aquarium and the Singapore Flyer, reported a net profit of S$6.4 million for the half year ended June 2023.

 

This puts it back into the black, after a net loss of S$8.5 million in H1 2022.

 

The S$6.4 million net profit takes into account an exchange loss of nearly S$1.5 million as the renminbi weakened against the Singapore dollar in the current period, the company said in an earnings announcement on Monday (Aug 14).

 

The improved business performance came on the back of higher revenues across all of its three Chinese attractions as China eased its strict Covid-19 measures in December 2022.

 

The Singapore Flyer also reported significantly higher revenues as international visitor arrivals gradually recovered &ndash an improvement from last year when rides were suspended for about three months due to a technical issue found during a routine maintenance inspection, said the company.

 

For the first half of the year, Straco posted a 264 per cent gain in revenue to S$32.1 million, more than three times that of the S$8.8 million revenue it earned in H1 2022.

 

Earnings per share for the half year stood at 0.75 Singapore cent, compared to a loss per share of 0.99 cent in the same period last year.

 

The company did not declare a dividend as it usually pays out a final dividend annually at the end of the financial year.

TOURISM attractions operator Straco Corporation : S85 -7% is expecting a &ldquo substantial net loss&rdquo for FY2022, as compared to the net profit recorded in FY2021, the group said on Wednesday (Feb 8).

 

One reason it cited for the net loss is a decrease in revenue from Straco&rsquo s China attractions from FY2021 to FY2022. Additional measures, such as lockdowns imposed by Chinese municipal authorities in line with the zero-Covid policy, impacted visitor numbers, Straco said.

 

The group also recorded material exchange losses due to the weakened yuan against the Singapore dollar in FY2022. In FY2021, the group recorded exchange gains. 

 

As land lease relief and government grants from job support schemes were discontinued in FY2022, Straco recognised lower wage-support grants compared with the year before. 

 

The group is expecting a decrease in other income compared with FY2021, due to a one-off arbitration award for an insurance claim in FY2021.

 

Last June, Straco&rsquo s subsidiary and operator of the Singapore Flyer, Straco Leisure, was awarded S$103,727 (subject to a 10 per cent deductible) for property damage arising from machinery breakdown, and S$8.2 million for the loss of profits