Final Results
Aseana Properties Limited
29 April 2008
Date: 29 April 2008
On behalf of: Aseana Properties Limited ('Aseana' or 'the Company')
Embargoed for: 0700hrs
Aseana Properties Limited
Full Year Results for the period 22 September 2006 to 31 December 2007
The board of directors (the 'Board') of Aseana Properties Limited, an Asian
property developer investing in Malaysia and Vietnam and quoted on the Official
List of the London Stock Exchange, is pleased to announce the audited results of
the Company and its subsidiaries (the 'Group') for the period 22 September 2006
to 31 December 2007. These results have been audited by the Company's auditors,
Mazars LLP, in accordance with the International Financial Reporting Standards
as adopted by the European Union and the consolidated Financial Statements
according to the IAS Regulations.
Group Highlights
• Consolidated loss attributable to the equity holders of the Company for
the period ended 31 December 2007 of US$3.260 million and include the
management fee expense of US$3.632 million.
• An earning loss per share of US cents 1.76.
• Group revenue of US$45.176 million.
• Establishing a gateway for investments into two of South East Asia's
rapidly growing real estate markets.
• Invested 46% of the US$162 million raised at the time of listing and will
invest the balance in a number of projects in Vietnam over 2008.
• Completed acquisition of five property development projects in Malaysia
under the Initial Portfolio on Admission.
• Committed approximately US$78 million cash to new investments in Malaysia
and Vietnam.
• Projects launched totalled US$388 million in gross development value
('GDV').
• The Group's overall portfolio of investments today includes ten projects
in the cities of Kuala Lumpur, Kota Kinabalu and Sandakan in Malaysia, and
Ho Chi Minh City and Danang in Vietnam.
Operational Highlights
• Three mixed prime commercial and residential projects officially launched
in Malaysia, namely biz hub @ One Mont' Kiara, SENI Phase One and Sandakan
Harbour Square Phase Two. All projects registered very encouraging sales to
date.
• In November 2007, the Group made its first investment in Vietnam to
develop a 5-star resort hotel and residences in the world famous 'China
Beach' area in Danang.
• A further two Memorandum Of Understandings to develop two commercial
office projects in District 1, Ho Chi Minh City, Vietnam, with a total
estimated GDV of US$386 million
Commenting on the Company's results, Dato' Mohammed Azlan bin Hashim, Chairman
of Aseana Properties Limited, said:
'The Group will continue to be active in Vietnam sourcing new opportunities
and reinforcing business networks. Leveraging the development experience of
Ireka, the Development Manager, we believe that the Group is very well placed to
take advantage of the booming real estate development market in Vietnam.
'2008 will be another promising year for real estate development in Vietnam.
Despite the current uncertainties in the international financial market, Vietnam
continues to progress steadily. We expect the implementation of some of the
country's infrastructure and development projects to create a sufficient level
of domestic consumption growth, which we expect will fuel the real estate
development market in Vietnam. We remain optimistic of the Group's performance
in Vietnam.
'In Malaysia, in view of the country's strong economic fundamentals and
despite the current global financial uncertainties, we are confident that the
local real estate market will continue to perform well over 2008 and beyond.'
Enquiries:
Aseana Properties Limited Contactable via Redleaf
Redleaf Communications Tel: 020 7822 0200
Adam Leviton / Samantha Robbins Email: al@redleafpr.com
Fairfax I.S. PLC Tel: 020 7598 5368
James King
Notes to Editors
• Ireka Development Management, the Manager, is a wholly-owned subsidiary of
Ireka Corporation Berhad, a company listed on the Bursa Malaysia since 1993,
which has 40 years of experience in construction and property development.
• The Company will typically invest in development projects at the
pre-construction stage, with a primary focus on location within the major
cities of Malaysia and Vietnam.
• Investment will be made in projects where it is believed there will be a
minimum 30% annualised return on equity ('ROE') on investments in
Vietnam and a minimum 20% ROE on investments in Malaysia.
• No one underlying single asset will account for more than 30% of the gross
assets of the Company at the time of investment.
• It is the intention that the Net Proceeds of the Placing will be fully
invested in accordance with the investment policy within 12 months of
Admission.
• The Directors believe the following factors should provide sustainable
growth in the real estate sectors of both Malaysia and Vietnam:
• An increasing standard of living and urbanisation driven by a
burgeoning young and middle class population
• Clear Government role in encouraging participation of private sectors
in real estate development, as well as encouraging and promoting land
and property ownership
• Improving availability of mortgages to encourage property ownership
• Favoured Foreign Direct Investment (FDI) destinations driving demand
for commercial and industrial properties
CHAIRMAN'S STATEMENT
Aseana Properties made a successful debut on the Official List of the London
Stock Exchange on 5 April 2007. Amidst the current challenging global market
conditions, Aseana Properties and its group of companies ('the Group')
have established a strong presence in the real estate market in Malaysia and
Vietnam in 2007. The goal is to become a gateway for investments into these two
rising property markets of South East Asia. Key milestones achieved this year
include:
• Deployment of approximately US$52 million cash for new investments in
Malaysia, including the completion of acquisition of five property
development projects which comprised the initial portfolio on admission;
• Deployment of approximately US$23 million cash for new investments in
Vietnam; and
• Launching of projects with Gross Development Value totalling US$388
million.
The Group's portfolio of investments today includes ten projects in Kuala
Lumpur, Kota Kinabalu and Sandakan in Malaysia, and Ho Chi Minh City and Da Nang
in Vietnam. Leveraging on the strengths of Ireka Development Management Sdn.
Bhd. ('the Development Manager'), Aseana Properties has remained focused
on the premier segment of the property markets of Malaysia and Vietnam as these
two countries continue to achieve robust economic growth.
In 2008, the main focus in Malaysia will be centred on implementing and
delivering existing projects in the portfolio. Several of these projects are
now in full swing of the development cycle and are expected to contribute
positively to the Group, commencing in the current financial year. In Vietnam,
Aseana Properties will continue to seek investment opportunities to strengthen
and deepen our presence there. For the investments committed, the Development
Manager is making good headway in obtaining approvals from the respective
authorities. The management are confident that some of these projects will be
able to commence construction in 2008.
On a macroeconomic front, the Group will continue to monitor closely the issues
and developments in the global credit and banking industry and the effects it
may have on our investments. The approach adopted is to ensure that the Group
has in place a prudent debt-equity structure for its investments, by closely
aligning the debt and equity requirements with the nature of cash flows and
tenure of the projects.
Though relatively new as a Group, we strive for excellence. This is reflected in
our expectations from the management of total diligence, commitment to
excellence and integrity. We believe the strengths and experience of the
appointed Development Manager in hands-on execution, local market knowledge and
innovation in products will be key to our performance in 2008.
On a personal note, I would like to take this opportunity to thank my fellow
Directors for their commitments and invaluable counsel over the period. I also
wish to extend my thanks to shareholders, government authorities, bankers and
business associates for their continued support and confidence in the Company
and the Group.
Dato' Mohammed Azlan Bin Hashim
Chairman
29 April 2008
FINANCIAL HIGHLIGHTS
PERFORMANCE SUMMARY
Period ended 31
December 2007
Total Return
Ordinary share price 4.25%
FTSE All-share index 5.32%
FTSE Real Estate Index -36.80%
Capital Values
Total assets less current liabilities (US$ M) 301.96
Net asset value per share (US$) 0.95
Ordinary share price (US$) 1.04
FTSE Real Estate Index 3,627.60
Gearing
Gearing (Note 1) 33.38%
Gearing (net of cash) -17.94%
Earnings Per Share
Earnings per ordinary share - basic -1.76
- diluted -1.76
Total Expenses Ratio
As a percentage of total assets less current liabilities (Note 2) 1.81%
Notes
1. Gearing: Total Borrowings/Shareholders' Fund
2. Total expense ratio: (Management Fees, Operating and Administrative Expenses)/
Total Assets less Current Liabilities
3. The Group's performance data are from 16 May 2007 to 31 December 2007 while
the FTSE indices are on calendar year.
Audited Consolidated Income Statement
For the period 22 September 2006 to 31 December 2007
2007
Continuing activities Notes US$
Revenue 3 45,176,071
Cost of sales (46,239,698)
Gross loss (1,063,627)
Other income 1,084,430
Administrative expenses (976,293)
Management fees 4 (3,631,693)
Other operating expenses (848,064)
Operating loss (5,435,247)
Investment income 4,320,485
Finance costs (132,689)
Net loss before taxation (1,247,451)
Taxation 5 (1,982,731)
Net loss for the period (3,230,182)
Equity minority interest (29,998)
Loss for the period attributable to the equity (3,260,180)
holders of the parent
Loss per share attributable to shareholders of the company - US cents per share
• Basic 6 (1.76)
• Diluted 6 (1.76)
Audited Consolidated Balance Sheet as at 31 December 2007
Assets Group
US$
Non-current assets
Property, plant & equipment 389,556
Investment in associate 12
Prepaid land lease payment 2,300,663
Land held for property development 16,798,134
Long term receivables 6,048,000
Total non-current assets 25,536,365
Current assets
Property development costs 213,585,677
Trade and other receivables 18,609,214
Cash and cash equivalents 122,890,641
Total current assets 355,085,532
TOTAL ASSETS 380,621,897
Equity and Liabilities
Equity
Share capital 12,500,000
Share premium 227,233,267
Share based payment reserve 117,799
Exchange fluctuation reserve 469,497
Retained earnings (2,725,443)
Shareholders' equity 237,595,120
Minority interests 1,845,682
Total equity 239,440,802
Current liabilities
Trade and other payables 58,269,002
Finance lease liabilities 23,939
Bank loans and borrowings 17,381,300
Current tax liabilities 2,986,364
Total current liabilities 78,660,605
Non-current liabilities
Finance lease liabilities 41,971
Bank term loans 26,584,146
Long term loans 35,890,646
Deferred tax liabilities 3,727
Total non-current liabilities 62,520,490
Total liabilities 141,181,095
TOTAL EQUITY AND LIABILITIES 380,621,897
Audited Consolidated Statement of Changes in Equity
For the period ended 31 December 2007
Retained Share Share Premium Share-based Exchange Total
Earnings Capital Payment Fluctuation
Reserve Reserve
Group
US$ US$ US$ US$ US$ US$
Issue of shares - 12,500,000 237,500,000 - - 250,000,000
Loss for the financial period (3,260,180) - - - - (3,260,180)
Fair value of share options - - (652,536) 652,536 - -
granted
Fair value of share options 534,737 - - (534,737) - -
exercised
Share issue costs - - (9,614,197) - - (9,614,197)
Currency translation - - - - 469,497 469,497
differences
Shareholders' equity as at (2,725,443) 12,500,000 227,233,267 117,799 469,497 237,595,120
31 December 2007
Audited Consolidated Cash Flow Statement
For the period 22 September 2006 to 31 December 2007
Group
US$
Cash Flows from Operating Activities
Net loss for the financial period (1,247,451)
Depreciation of property, plant & equipment 30,953
Amortisation of leasehold land payment 9,916
Operating profit before working capital changes (1,206,582)
Changes in working capital:
Decrease in inventories 2,167,598
Increase in property development costs (3,743,106)
Increase in leasehold land payment (2,300,663)
Increase in receivables (5,079,922)
Increase in payables 12,155,747
Net cash used in operations 1,993,072
Tax paid (1,142,124)
Net cash flows from operating activities 850,948
Cash Flows From Investing Activities
Acquisition of subsidiaries, net of cash (37,883,066)
Acquisition of land held for property (13,212,866)
Advances to associate 252,019
Purchase of property, plant and equipment (49,467)
Purchase of shares in associate (12)
Net cash used in investing activities (50,893,392)
Cash Flows From Financing Activities
Net proceeds from issue of shares 152,385,803
Repayment of borrowings (22,774,397)
Drawdown of borrowings 41,067,791
Repayment of finance lease liabilities (96,086)
Repayment of amount owing to directors (889,021)
Net cash flows generated from financing activities 169,694,090
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE FINANCIAL PERIOD 119,651,646
Effect of changes in exchange rates 469,497
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE FINANCIAL PERIOD -
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL PERIOD 120,121,143
Notes to the Audited Group Financial Statements
1 General Information
Aseana Properties Limited was incorporated in Jersey on 22 September
2006 under the laws of Jersey. The Company was registered under the number
94592. The Company's registered office is located at Walker House, 28-34 Hill
Street, St. Helier, JE4 8PN. The Company is domiciled in Jersey.
On 5 April 2007, the Company was listed on the main market of the
London Stock Exchange.
The principal activities of the Group are acquisition, development
and redevelopment of upscale residential, commercial and hospitality projects in
the major cities of Vietnam and Malaysia. The Group will typically invest in
development projects at the pre-construction stage and also selectively invest
in projects in construction and newly completed projects with potential capital
appreciation.
The financial information set out in this announcement does not
constitute the Company's statutory financial statements for the period ended 31
December 2007, but is derived from those financial statements. The auditors
have reported on the statutory financial statements for the period ended 31
December 2007; their report was unqualified.
This announcement was approved by the Board of Directors on 29 April
2008.
2 Basis of Preparation
The final results have been prepared in accordance with the accounting policies
adopted by the Company and are consistent with those adopted in the Company's
interim results for the period ended 30 June 2007. The Group financial
statements have been prepared in accordance with International Financial
Reporting Standards ('IFRS'), and IFRIC interpretations issued, and
effective, or issued and early adopted, as at the date of these financial
statements. The Group financial statements have been prepared under the
historical cost convention as modified for financial assets and financial
liabilities at fair value.
There are no comparative consolidated financial statements as this is the first
report since the company's incorporation.
The Group has not adopted certain standards in the preparation of the financial
statements as they are either not effective as at 31 December 2007 or not
applicable to the Group's business.
3 Revenue and Segmental Information
The gross revenue represents the proportionate sales value of development
properties attributable to the work in progress performed for the period 15 May
to 31 December 2007.
The Company is an investment holding company and has no operating revenue. The
Group operating revenue for the period mentioned are from the sale of
development properties in Malaysia. The Company's property investment in Vietnam
has not commenced business.
Group
US$
Revenue from sale of development properties 43,073,785
Sales of completed units 2,102,286
45,176,071
The Directors consider that the Group has only one reportable segment and the
results and position of this segment is as disclosed in the Consolidated Income
Statement and Consolidated Balance Sheet.
4 Management Fees
Under the Management Agreement between the Company and Ireka Development
Management Sdn Bhd dated 27 March 2007, the Company shall pay to the Development
Manager a fee in respect of managing the assets of the Group and other
obligations undertaken by it under the Management Agreement at the rate of 2%
per annum of the net asset value, calculated on the last business day of March,
June, September and December of each calendar year, and payable quarterly in
advance.
In addition to the annual management fee, the Development Manager shall be
entitled to a performance fee calculated at 20% of the out performance net asset
value over a total return hurdle rate of 10%. No performance fee has been paid
during the period ended 31 December 2007.
5 Taxation
Group
US$
Current period 1,997,209
Deferred tax (14,478)
Total tax expense for the period 1,982,731
The numerical reconciliation between the income tax expenses and the product of
accounting profit multiplied by the applicable tax rate is computed as follows:
Group
US$
Accounting loss (1,247,451)
Income tax at a rate of 26% (324,337)
Add :
Tax effect of expenses not deductible in determining taxable profit 3,683,488
Less :
Tax effect of income not taxable in determining taxable profit (1,376,420)
Total tax expense for the period 1,982,731
The Company has been granted exempt company status within the meaning of Article
123A of the Income Tax (Jersey) Law 1961 (as amended). The effect of such
special status is that the Company is treated as non-resident company for the
purpose of Jersey tax laws and is therefore exempt from Jersey income tax on its
profits arising outside Jersey, and, by concession, on bank deposit interest
arising in Jersey and from any obligation to withhold Jersey income tax from any
interest or dividend payments made by it. This status is renewable on an annual
basis upon payment of a fee of £600 to the Controller of Income Tax in Jersey,
and it is the Company's intention to maintain this status.
The directors intend to conduct the Group's affairs such that the central
management and control is not exercised in the United Kingdom and so that
neither the Company nor any of its subsidiaries carries on any trade in the
United Kingdom. The Company and its subsidiaries will thus not be residents in
the United Kingdom for taxation purposes. On this basis, they will not be
liable for United Kingdom taxation on their income and gains other than income
derived from a United Kingdom source.
Certain subsidiaries in Malaysia are subject to Malaysian income tax on income
arising from property development activities after deduction of allowable
expenses.
6 Loss Per Share
2007
US$
Loss for the period attributable to the equity holders of the parent 3,260,180
Weighted average number of shares:
Basic 185,616,440
Diluted 186,050,708
Loss per share (US cents) :
Basic 1.76
Diluted 1.76
Basic loss per share is calculated by dividing the net loss for the period of
the Company by the weighted average number of ordinary shares in issue during
the period.
For diluted loss per share, the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all potential dilutive options over
ordinary shares. Potential ordinary shares resulting from the exercise of share
options have an anti-dilutive effect.
7 Acquisition of Business
Aseana Properties Limited is the parent company of a group of companies involved
in property development business. The acquisition of the following companies by
the Company was completed on 15 May 2007 and funded by raising US$88 million by
the issue of 88 million ordinary shares in Aseana Properties at an issue price
of US$1.00 per share and cash consideration of US$45,785,572.
(a) Acquisition of Ireka Land Sdn Bhd
On 15 May 2007, the Group acquired 100% of the issued share capital of Ireka
Land Sdn Bhd for a total consideration of US$49.117 million. The transaction has
been accounted for using the purchase method of accounting.
Net Assets
US$
Net asset acquired
• Property, plant & equipment 217,175
• Property development costs 51,548,127
• Trade and other receivables 10,509,886
• Cash and cash equivalents 4,200,723
• Trade and other payables (17,878,429)
• Current tax liabilities (2,007,730)
• Bank borrowings (32,042,284)
• Deferred tax liabilities (10,287)
• Hire purchase (91,327)
• Bank Loans (6,055,611)
• Minority interest (15)
8,390,228
Fair value adjustment to property development costs 40,726,538
Fair value of net assets acquired 49,116,766
Satisfied by:
Issuance of shares 34,587,457
Cash consideration (including deferred cash consideration as 14,529,309
disclosed in Note 7 (c))
Total consideration 49,116,766
Net cash outflow arising on acquisition (see Note 7 (c))
Ireka Land Sdn Bhd contributed US$39.253 million revenue and profit of US$6.862
million to the Group's loss before tax for the period between the date of
acquisition and the balance sheet date.
There are no other fair value adjustments other than the adjustment disclosed
above relating to property development costs.
If the acquisition of Ireka Land Sdn Bhd had occurred on 1 January 2007, they
would have added approximately US$42.949 million to Group income and a profit of
approximately US$7.224 million to Group loss before tax for the period.
(b) Acquisition of Amatir Resources Sdn Bhd
On 31 May 2007, the Group acquired 99.9% of the issued share capital of Amatir
Resources Sdn Bhd for a total consideration of US$66.428 million. The
transaction has been accounted for by using the purchase method of accounting.
Net Assets
US$
Net asset acquired
• Property development costs 14,523,080
• Trade and other receivables 1,279,034
• Cash and bank balances 290,496
• Trade and other payables (2,758,460)
• Bank overdraft and borrowings (2,903,227)
• Long term loans (2,014,195)
• Term loans (7,474,714)
• Minority interest (686,385)
255,629
Fair value adjustment to property development costs 66,172,832
Total consideration 66,428,461
Satisfied by:
Issuance of shares 39,086,377
Deferred cash consideration 4,645,832
Cash consideration 22,696,252
Total consideration 66,428,461
Net cash outflow arising on acquisition
Cash consideration 27,342,084
Less deferred cash consideration (4,645,832)
Cash and cash equivalents acquired 2,479,002
25,175,254
Amatir Resources Sdn Bhd contributed US$1.938 million revenue and profit of
US$0.528 million to the Group's loss before tax for the period between the date
of acquisition and the balance sheet date.
There are no other fair value adjustments other than the adjustment disclosed
above relating to property development costs.
If the acquisition of Amatir Resources Sdn Bhd had occurred on 1 January 2007,
they would have added approximately US$1.938 million to Group income and a
profit of approximately US$0.597 million to Group loss before tax for the
period.
(c) Acquisition of ICSD Ventures Sdn Bhd
On 15 May 2007, the Group acquired 60% of the issued share capital of ICSD
Ventures Sdn Bhd for a total consideration of US$20.344 million. The transaction
has been accounted for by the purchase method of accounting.
Net Assets
US$
Net asset acquired
• Property, plant & equipment 140,198
• Land held for property development 5,885,930
• Property development costs 7,126,291
• Inventories 2,167,598
• Trade and other receivables 1,992,427
• Cash and bank balances 382,157
• Hire purchase creditors (70,669)
• Bank term loans (5,862,481)
• Deferred tax liabilities (6,745)
• Trade and other payables (3,715,697)
• Bank overdraft and borrowings (5,176,548)
• Tax liabilities (124,721)
• Minority interest (1,095,105)
1,642,635
Fair value adjustment to property development costs 18,701,588
Total 20,344,223
Satisfied by:
Issuance of shares 14,326,166
Cash consideration (including deferred cash consideration as disclosed 6,018,057
below)
Total consideration 20,344,223
ICSD Ventures Sdn Bhd contributed US$3.984 million revenue and a loss of
US$0.863 million to the Group's loss before tax for the period between the date
of acquisition and the balance sheet date.
There are no other fair value adjustments other than the adjustment disclosed
above relating to property development cost.
If the acquisition of ICSD Ventures Sdn Bhd had occurred on 1 January 2007, they
would have added approximately US$3.984 million to Group income and a loss of
approximately US$0.94 million to Group loss before tax for the period.
The acquisitions of Ireka Land Sdn Bhd ('ILSB') and ICSD Ventures Sdn Bhd
('ICSD') include a total deferred cash consideration of US$3,256,674.
Therefore, the net cash outflow arising on these two acquisitions is:
US$
Cash consideration 20,547,366
Less deferred cash consideration (3,256,674)
Cash and cash consideration (4,582,880)
12,707,812
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