managing director s report

Transcription

1 managing director s report I am pleased to report the results of operations of the Group for the year under review in respect of its four main divisions - Property Development, Retail and Commercial Property, Hotel and Plantation. P ROPERTY D EVELOPMENT The Property Development Division emerged as the main contributor to the Group both in terms of turnover and net profit. It contributed RM227 million in turnover and RM16 million in pre-tax profit as compared to RM4 million turnover and RM10 million loss in the previous period. The profit registered was marginal in relation to turnover as it was reduced by interest expense and high initial infrastructure costs. Bandar Tasik Puteri Urban Regional Centre enjoyed successful sales launches with strong demand for its homes. This was attributed to the timely re-packaging of the homes to meet market demand for affordable housing. For the financial year under review, Bandar Tasik Puteri registered RM159 million in progress billings and RM12 million in pre-tax profit. In 1999, Bandar Tasik Puteri launched a total of 1,657 units of new affordable homes and shop office, namely: Oak Homes single storey units in January 1999; Millennium Neighbourhood Mall units of shop offices in August 1999; and Fir Homes double storey units in October Sales were encouraging with 1,573 units sold grossing a sales value of RM166 million, a threefold increase over the previous period s sales of 382 units with sales value of RM43 million. By April 2000, cumulative sales at Bandar Tasik Puteri had exceeded RM300 million. M ANAGING D IRECTOR Dato Jeffrey Ng Of the units launched, 1,500 units of houses will be ready for occupation by end of year 2000, which would see an initial estimated population of 7,500 moving into Bandar Tasik Puteri. To cater for the convenience of homeowners, a number of amenities are now in the pipeline to provide comprehensive services to accommodate their needs such as primary and secondary schools, bus terminals, police stations as well as retail and shopping amenities. Bandar Tasik Puteri, a planned Urban Regional Centre for the North Klang Valley, is a 2,670-acre development which spans over 12 to 15 years. It comprises three distinct development corridors; the Quality Corridor for upmarket housing, the Value Corridor for economy housing and the Commercial Corridor for its commercial centre. The Group is currently developing the Value Corridor in line with market demand. Bandar Tasik Puteri will provide a rejuvenating primary home environment for people of all income groups and also a 435-acre vibrant commercial centre which comprises business, entertainment and recreational facilities that will generate viable economic activities and employment for the surrounding population in the North Klang Valley in the medium and long term. Its 18-hole golf course which is nearing completion is designed by an internationally-renowned golf consultant, and has a clubhouse that is compact, functional and practical with recreational facilities such as swimming pool and tennis court. In view of the success of its sales launches, the Group is actively seeking new landbank for expansion or potential joint ventures with landowners for future development in order to build up the profit contribution from this division. In addition to the development at Bandar Tasik Puteri, our upmarket residential development in Sydney, the Marina One apartments, was completed during the year and has started to contribute to the Group s income. The Marina One is adjacent to the Rushcutters Harbourside Sydney. It has 78 units of luxurious apartments with superb views of the Rushcutters Park and the marina at Rushcutters Bay and is priced between AUD600,000 to AUD1,700,000. During the year, 31 units were sold and contributed RM67 million (AUD27.5 million) in turnover and RM10 million (AUD4.0 million) in net profit to the Division. The Group expects the balance to be substantially sold by the end of this year. Scenic view of Tasik Puteri Golf & Country Club as seen from the putting-green

2 RE TA I L A N D C O M M E R C I A L PR O P E RT Y The Retail and Commercial Pro p e rty Division s turnover decreased to RM20.9 million for the year under re v i e w f rom RM29.5 million in the previous period due to reduced rental rates and lower occupancy levels. In tandem with the drop in revenue, the Division re c o rded a lower pre-tax profit of RM7.8 million compared to RM17.6 million in the previous period. During the year, the average occupancy rate of City Square Shopping Complex declined drastically from 95% to 69% and average rental rate dropped by 21% as a result of the economic crisis and rental reduction in our e ff o rts to assist tenants to pull through this difficult year. In view of changing market demands, City Square Shopping Complex is re-positioning itself as a Home Destination Centre, whereby the family can shop for all its requirements within the complex. Our business strategy is to capture a niche market by enhancing its identity, tenancy mix and customer volume. The shopping centre is designed to specialise in audio-visual and electronic products and services, sports and re c re a t i o n a l m e rchandise, quality home furnishing, art galleries and food and family entertainment amenities. The first phase of renovation costing approximately RM3 million to open up the g round floor and two lower ground floor levels to make them more accessible was completed. When roadwork in its immediate vicinity completes, the complex will u n d e rtake its second phase of renovation to create a new main entrance to enhance its frontage. It will also undertake landscaping work to improve the facade of the complex. With these eff o rts, coupled with the re c o v e ry of the economy and retail businesses, City S q u a re Shopping Complex will see an improvement in rental revenue in the future. The Empire Tower was affected by the oversupply of office space in the Klang Valley. Stiff competition from new office buildings, tenants moving to cheaper premises or to their own buildings, continued downsizing and closure of businesses by tenants f u rther aggravated the situation. Hence, its average occupancy rate declined fro m 84% to 68%, and the average rental rate dropped by 21%. Club House facilities at Ta s i k Puteri Golf & Country Club The oversupply situation is anticipated to remain as office space in the Klang Valley is expected to expand f rom 5.0 million square metres to 7.1 million square metres when buildings currently under constru c t i o n complete whilst demand is expected to lag behind the supply of office space. Notwithstanding these adverse factors, Empire Tower expects to maintain its occupancy level with its core corporate tenants and innovative marketing strategies. Empire Tower being a Grade-A office building located in the City Square Centre is in a strong position to increase its market share of corporate and multi-national tenants as the economy recovers and when the roadwork in its vicinity completes. HO T E L The year under review was a year to remember as it marked the Gro u p s first foray into the overseas hospitality industry. The opening of the new Rushcutters Harbourside Sydney, a 260-room 4 1 /2-star boutique hotel benefits the Group through synergistic sales linkages that promote cross selling among its hotels in Malaysia and Australia. With the opening of this latest hotel, the Group now owns four hotels totalling 1,444 rooms in 4 to 5-star c a t e g o ry at diversified locations. They are the Crown Princess Kuala Lumpur, Hotel Fairlane Kuala Lumpur, F e rringhi Beach Hotel Penang and Rushcutters Harbourside Sydney. The Hotel Division re c o rded a turnover of RM36.6 million re p resenting 13% of the Gro u p s turn o v e r. This was an increase of 23% over that of the previous period which was mainly attributable to the newly opened Rushcutters Harbourside Sydney. However, the Division re p o rted a higher net loss of RM21.9 million as c o m p a red to the previous period s net loss of RM19.5 million. This was attributed to losses incurred by Rushcutters Harbourside Sydney which was in its gestation period. The overall results of our three hotels in Malaysia was a loss of RM18.6 million which was a slight i m p rovement compared to a RM19.5 million loss in the previous period. The improvement was due to revamped cost stru c t u res and stringent cost control measures although the hotels were operating in an oversupply situation. The effects of the economic downturn and oversupply of rooms contributed to the decline in overall hotel occupancy in Kuala Lumpur from 56% to 49% despite various international events held to boost tourism, such as the Shopping Fair 99, World Cup Golf 99 and the Formula One Grand Prix at Sepang. asia pacific land berhad 6 The Crown Princess Kuala Lumpur perf o rmed below the industry standard as its occupancy fell drastically fro m 32% to 19%. In addition to the already difficult business conditions, the hotel had to endure unnecessary delay in the completion of public roadwork in its vicinity pro-longed by co-ordination and design-re l a t e d p roblems. The roadwork that commenced in the first quarter of 1996 is still not completed as of to-date.

3 The Hotel Fairlane Kuala Lumpur, with its strategic location, performed well above industry standard. Occupancy rate increased from 50% to 72% which was one of the highest among Kuala Lumpur s city hotels. However, average room rate declined by 13% as the hotel faced immense pressure from continuing price war in room rates. The Ferringhi Beach Hotel Penang improved its performance slightly on the back of higher room rates which increased by 5% whilst maintaining its occupancy rate at 46%, which was lower than the overall occupancy rate of 61% of resort hotels in Penang. The Rushcutters Harbourside Sydney, in its first year of operations, reported a loss during its gestation period. As the hotel establishes its presence in the market, its performance is expected to improve. In the coming years, hotels in Kuala Lumpur will continue to face an increase in supply of hotel rooms. A new supply of approximately 2,700 rooms currently under construction will add to the existing 24,000 rooms. However, with the Group s ongoing aggressive promotional activities and efforts taken by the Ministry of Culture, Arts & Tourism in wooing tourists to Malaysia and promoting domestic tourism, it is expected that its hotels will experience a gradual improvement in occupancy levels and average room rates in the coming years. As improvement in business conditions was already seen towards the end of last year, this Division expects to make an operational profit before interest for the year To achieve that, the Division has aggressively moved into new markets which can provide higher yields whilst continuing to focus on optimising cost, increasing market share and improving its competitive edge in terms of service, productivity and efficiency. P LANTATION The Group has 9,700 acres of plantation land in Sabah of which 3,900 acres are planted with oil palm. By end of year 2000, the entire plantation land will be substantially planted and we can expect harvesting to commence in The Rushcutters Harbourside Sydney as seen from the Rushcutters Park Official opening of the Rushcutters Harbourside Sydney on 27 August 1999 by The Honourable Bob Carr MP, the Premier of New South Wales. With him are directors, Tan Sri Dato Low Yow Chuan and Dato Jeffrey Ng Rooftop swimming pool area at Rushcutters Harbourside Sydney overlooking the magnificent harbourside skyline of Sydney A PPRECIATION On behalf of the Management, I wish to extend our heartfelt appreciation to all staff of the Group for their dedication and contribution towards the Group s turnaround this year. I would also like to thank all our valued shareholders, customers, business associates, bankers and government authorities for their reliable support throughout the year. Dato Jeffrey Ng Managing Director 5 May 2000 asia pacific land berhad 7

4 board of directors 1 Tan Sri Dato Low Yow Chuan 5 Low Gee Tat 2 Dato Hanafiah Bin Hussain 3 Dato Lee Kim Sai 4 Tan Sri Datuk Seri Chong Hon Nyan 6 Low Gee Teong 7 Dato Jeffrey Ng management team 1 Daniel Tan Woo Kuang 7 Chan Kam Lye 2 Loke Mun Kit 8 Low Gee Tat 3 Wee Beng Sang 4 Low Gee Soon 9 Stephen Yang Kok Chee 10 Low Gee Teong Oh Leen May 11 Dato Jeffrey Ng 6 Woon Siew Choo 12 Mal McArdle

5 p rofile of directors and management team 1 Tan Sri Dato Low Yow Chuan, Chairman Tan Sri Dato' Low Yow Chuan, aged 67, has been a Chairman of AP Land since 18 April He is a business entrepreneur with more than 40 years of experience in the hotel and property industries, having managed the Federal Hotel chain and developed numerous hotels and several large commercial projects which include the landmark City Square Centre, an integrated commercial complex comprising City Square Shopping Complex, Crown Princess Kuala Lumpur, a 5-star deluxe hotel and Empire Tower, a Grade-A office building and Low Yat Plaza, a shopping complex. He was awarded the FIABCI Property Man of the year 1994 award. Tan Sri Dato' Low Yow Chuan spearheaded the development of Bandar Tasik Puteri, a 2,670- a c re Urban Regional Centre development project in Rawang, which comprises both aff o rdable and upmarket residential homes and commercial centres providing business, entertainment, sports and recreational facilities and amenities to serve the growing population of the North Klang Valley. He also sits on the board of the Low Yat Group of Companies which comprise several private limited companies which are principally involved in hotel business and property related activities. 2 Dato Jeffrey Ng Tiong Lip, Managing Director and Audit Committee Member Dato' Jeff rey Ng, aged 43, was appointed to the Board of AP Land on 9 Febru a ry He has been holding the position of the Managing Director of AP Land since 30 May 1992 and was appointed as a member of the AP Land Audit Committee on 23 May He is also a member of The Institute of C h a rt e red Accountants, Australia, Malaysian Association of Certified Public Accountants and Malaysian Institute of Accountants. After graduating with a Bachelor of Economics degree from Monash University, Australia in 1979, he gained audit working experience in an international accounting firm in Melbourne for 4 years. He was conferred a Fellowship by the Malaysian Institute of Directors in Since 1998, Dato' Jeffrey Ng has served as a Vice President of the Malaysian Association of Hotel Owners (MAHO). He is a member of the Young Presidents Organisation (YPO) since 1985 and held the post as Chapter Chairman of YPO from 1992 to He was formerly the Secretary General of FIABCI (The International Real Estate Federation), Malaysia Chapter from 1994 to 1997 and remains a member of FIABCI. He has over 16 years of extensive experience in audit, finance and corporate planning, executive management of business operations in the property and hotel industry. He is also a director of several private limited companies in the Low Yat Group of Companies which are principally involved in hotel business and pro p e rty re l a t e d activities. 3 Tan Sri Datuk Seri Chong Hon Nyan, Independent Non-executive Director and Chairman of the Audit Committee Tan Sri Chong Hon Nyan, aged 76, has been an independent non-executive director of AP Land since 1 December 1992 and was appointed as the Chairman of the Audit Committee of AP Land since 23 May He has previously held the posts of Secretary General Ministry of Finance from 1971 to 1974, Deputy Finance Minister from 1974 to 1976, Minister in the Prime Minister's Department in 1977, Minister of Health from 1978 to 1983 and Minister of Tr a n s p o rt from 1983 to 1984 in the Government. He has attended meetings of the World Bank, International Monetary Fund, Asian Development Bank, Columbo Plan, World Health Organisation, Commonwealth Finance Ministers and Economic and Social Commission for Asia and the Pacific region (ESCAP) and has often led the Malaysian delegation to such international conferences. Tan Sri Chong is also a non-executive director in several companies. He is currently a Patron of the Young Men Christian Association (YMCA) Kuala Lumpur, a Patron of the Boys Brigade Malaysia and a member of the National Economic Consultative Council. He is also the honourary Chairman of the Tan Sri Lee Yan Lian Charitable Foundation and a member of the Board of Governors of the International Medical University. 4 Dato Lee Kim Lee Hoo, Independent Non-executive Director and Audit Committee Member Dato' Lee Kim Sai, aged 63, joined the Group on 1 October 1995 when he was appointed as the Director and Chairman of Rawang Lakes Sdn Bhd, a wholly-owned subsidiary of AP Land. He was appointed as an independent non-executive director to the Board of AP Land on 15 March He served in the Selangor State Executive Committee from 1974 to 1982 and was formerly the Minister of Labour from 1985 to 1988, the Minister of Housing & Local Government from 1989 to 1990 and the Minister of Health from 1990 to Dato' Lee is also presently a director of several private limited companies and holds the post as Chairman in a public listed company. 5 Dato Hanafiah Bin Hussain, Independent Non-executive Director and Audit Committee Member Dato' Hanafiah Bin Hussain, aged 73, was appointed as an independent non-executive director to the Board of AP Land on 1 October 1993 and has been a member of the AP Land Audit Committee since 23 May He holds a Bachelor of Arts (Commerce) degree from the University of Manchester, England and is a member of The Institute of Chartered Accountants in England and Wales. Dato' Hanafiah has extensive experience in auditing, finance and banking industries and was formerly the Executive Chairman of Bank Bumiputra Malaysia Berhad from 1990 to 1992, the Chairman of South East Asian Bank Ltd. Mauritius from 1990 to 1992, the President of the Associated Malay Chambers of Commerce of Malaysia from 1966 to He was a founder partner of the Firm of Chart e red Accountants, Hanafiah Raslan and Mohamed from 1964 to asia pacific land berhad 9