Straco Corporation Limited

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Extracted from the Annual Report 2017

"We would also like to share that the Group was awarded the Enterprise Award at the prestigious Singapore business awards in recognition of our past achievement, in particular our turning around of the Singapore Flyer since we took over in 2014."

ANOTHER GOOD YEAR

Amidst an improving overall economic climate, the tourism market in China and Singapore remained buoyant in 2017. This has contributed to another good year as the Group's results fell largely in line with our performance expectations. Overall, the Group's operations remained strong with revenue increasing by 2.6% to S$128.44 million and net profits increasing by 2.7% to S$47.7 million from a year ago. As we progress into the new year, the Group continues to generate sustainable margins at both the operating and net income levels.

We are pleased with the overall year on year increase in visitor numbers which contributed to the growth in Group revenue last year. We remain committed to generating greater organic growth in visitor numbers at our existing attractions through various upgrading initiatives and marketing programs.

In view of this continued strong performance, and consistent with our previous payout ratio, we propose a first and final dividend of 2.5 cents per share. This proposed payment represents 45% of the net distributable profit for the year. We remain committed to generating favorable returns for our shareholders, while balancing our cash requirements for new projects, asset renewal and enhancements.

We would also like to share that the Group was awarded the Enterprise Award at the prestigious Singapore Business Awards in recognition of our past achievements - in particular, our turning around of the Singapore Flyer since we took over in 2014.

STAYING RELEVANT

Last year, we shared on some of the major asset enhancement programs which we will be embarking on for our existing attractions, including the Singapore Flyer and our aquariums in China. We will continue to make progress in this regard but the work is likely to span several years as we seek to minimize disruption to normal operations. The Group is also on the lookout for good projects to build or acquire, and will continue to assess potential tourism investments. We do however, remain uncompromising in the standards of our assessment criteria, and will only select projects that offer true long term potential for sustainable development and favorable returns.

TOURISM IN CHINA AND SINGAPORE REMAIN STRONG

Amidst a recovering world economy, domestic tourism in China maintained its momentum, with strong support from the Chinese government for the industry, registering double-digit increases in both tourist trips and revenues in 2017. Meanwhile, visitors to Singapore also increased 6.2% year on year, hitting a record of 17.44 million, with visitors from China, Indonesia and India contributing to the bulk of the growth in visitor arrivals. We are convinced that this is part of a continuing and sustainable trend, which presents a great opportunity for us to capitalize on for growth. We will continue to stay focus on enhancing our capabilities in attractions development and management to stay ahead of the curve and make full use of these opportunities.

WORD OF APPRECIATION

As always, I would like to thank our staff, management, directors and partners for their part in our continuing success:

  • Our ground staff and management team across our subsidiaries for their unwavering commitment to product development and service quality. Their positive attitude and ability to adapt to the evolving business environment is the key factor keeping us at the forefront of the industry.
  • Our various other stakeholders, business partners and consultants who have contributed to our sustained performance.
  • My fellow directors on the Board and all directors of our group companies for their valuable advice and guidance.
  • Last but not least, our shareholders for their trust and encouragement.

We will continue to build on the strong foundation and that we have laid and adopt a multi-pronged approach in generating value through effective corporate governance, innovation and seizing investment opportunities.

Wu Hsioh Kwang
Executive Chairman