HPL’s FY15 PATMI decreased 34.4% to S$81.7m due to lower contributions from the property development segment (given slower sales at The Met condominium in Bangkok and Mar14 TOP of Tomlinson Heights) and weaker performances from Singapore hotels which were affected by stronger competition with reduced consumer spending and lower corporate travel demand.

We understand that ongoing refurbishment and repair works at the Four Seasons Resort Bali at Jimbaran Bay and the Holiday Inn at Vanatu also affected the hotel segment’s performance. These were partially offset by a higher share of results of JV/associates which rose from S$33m to S$36.2m mostly due to divestment gains of certain Shanghai assets by an associate.

In terms of the topline, FY15 revenues dipped 5.7% to S$579.5m similarly due to lower contributions from both the group’s Hotel and also Property Development segments. Overall, we judge these results to be in line with expectations as FY15 PATMI and revenues constitutes 101.8% and 99.3% of our full year estimates. Maintain BUY with an unchanged fair value estimate of S$5.32.

Source: OCBC Research - 29 Feb 2016