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Interim Financial Information For The Six Months And Full Year Ended 31 December 2023

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Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Financial Position

Review of performance of the Group

Revenue

In the second half of FY2023, the Group generated revenue of $50.06 million, a 158% surge compared to the corresponding period in 2H2022 when strict Covid-19 measures of the Chinese municipal authorities were in place at that time. Revenue generated by our China attractions were significantly higher than 2H2022 with huge number of visitor arrivals during the summer holidays and National Day golden week holidays as domestic tourism recovered strongly and returned to near pre-Covid normalcy.

Singapore Flyer also reported higher revenue in 2H2023 compared to 2H2022 with significant increase in ticket revenue from tour group segment as international tourist arrivals continue to recover and ride operations gradually resumed to its normal operating hours. Retail and F&B revenue increased substantially amid higher footfall, while net rental income from retail leases and event space rental as well as F1 revenue also increased.

Overall visitation to all our attractions totalled 2.06 million visitors for 2H2023, 216% higher than the corresponding period of 0.65 million visitors in 2H2022.

Cumulatively, overall revenue for the full year of FY2023 amounted to $82.14 million, 191% higher than FY2022. Overall revenues from our attractions were significantly higher on substantial increase in visitor arrivals. In comparison to FY2022 with the prolonged closure of Shanghai Ocean Aquarium ("SOA") for more than three months and low visitor numbers to our China attractions amidst intermittent lockdowns and strict Covid-19 measures severely impacted visitor numbers and normal operations. Rides on Singapore Flyer were also suspended for about three months due to a technical issue in FY2022.

Other income for 2H2023 increased from corresponding period, mainly due to higher amounts from government grants including wage support grant and claim for marketing partnership programme from Singapore Tourism Board being recognised; while income from concessionaire sales and interest income also increased.

Operational Results

Total Expenses (excluding finance cost) for 2H2022 was $28.44 million, 22% higher than 2H2022. Exchange loss of $0.22 million was recorded in this period, as Renminbi weakened further against the Singapore Dollar in the current period. Excluding the exchange losses in both periods, total expenses for 2H2023 would have been 46.7% higher than 2H2022 as business operations at our attractions returned to normalcy while 2H2022 was still severely impacted by the zero-Covid policy in China and Singapore Flyer was operating at shorter week and hours at that time. There was an impairment loss amounting to $0.42 million for certain design costs incurred for our Xi'an project which were capitalised as construction-in-progress previously.

Changes in inventories and purchases of goods increased, as retail and F&B sales increased significantly at SOA and Singapore Flyer. Sales and marketing expenses increased, mainly due to higher sales and other taxes as well as increased advertising and promotional expenses. Loss on disposal of property, plant and equipment decreased significantly, as there was a write-off of 24 units of old drive shafts amounting to $0.16 million at Singapore Flyer during the corresponding in 2H2022. Rental expense increased substantially, mainly due to the higher variable land rental at SOA as revenue generated in 2H2023 was significantly higher than 2H2022. Property and other taxes increased, mainly due to the upward revision in annual value of the Giant Observation Wheel ("GOW") in 2023. Staff cost increased 34.8%, mainly due to higher salary cost arising from more headcount, salary increment, increased provident fund contributions and accrual of performance bonus. Utilities expense increased compared to 2H2022, mainly due to significantly higher expenses at Singapore Flyer as electricity tariff more than doubled upon renewal of electricity contract in October 2022 and higher consumption due to longer operating hours of 7 days of 12 hours daily in 2H2023 compared to mainly 5 days of 8 hours daily in 2H2022; while utilities expenses at China attractions also increased. Other expenses increased mainly due to higher packaging expenses, bank charges, audit fee, directors fee, and others.

Profit before tax was $24.36 million for 2H2023, compared to a loss before tax of $2.10 million recorded in 2H2022.

Cumulatively, profit before tax was $34.62 million for FY2023, compared to loss before tax of $11.59 million in FY2022; mainly attributable to higher revenue generated offset by higher expenses incurred and lower exchange loss recorded.

Balance Sheet items

Inventories increased 15.8% from $2.01 million at 31 December 2022 to $2.33 million at 31 December 2023, mainly due to increase of GOW spare parts for Singapore Flyer, and increase in retail stock and fish feeding stock at UWX.

Reserves decreased 35.5% from $11.62 million at 31 December 2022 to $7.50 million at 31 December 2023, mainly due to the translation loss arising from the weaker RMB against SGD at the end of the current year compared to the end of last year.

Trade and other payables (non-current and current) increased 34.6% from $8.03 million at 31 December 2022 to $10.81 million at 31 December 2023, mainly due to accrual of performance bonus at HQ and subsidiaries level for FY2023 while no performance bonus were accrued in FY2022, increase in deposits from online travel agencies as online ticket sales increased, increases at Singapore Flyer mainly arising from rental deposits received under retail lease arrangements whereby lease expiry date is more than 12 months, higher property tax payable, higher outsourced part-timers salary, and higher Q4 GST output taxes payable as revenues increased; offset by certain expenses accrued in last year being paid in the current year.

Deferred income decreased 31% from $0.17 million at 31 December 2022 to $0.12 million at 31 December 2023, mainly due to the periodic recognition of deferred income to profit & loss in the current period.

Deferred tax liabilities decreased 14.0% from $16.58 million at 31 December 2022 to $14.26 million at 31 December 2023, mainly due to the re-estimation of deferred tax position for the investment property, offset by deferred tax recognised on the current year distributable profits of our China subsidiaries which are subjected to 5% withholding tax.

Current tax liabilities increased 374.7% from $0.2 million at 31 December 2022 to $0.94 million at 31 December 2023, mainly due to the provisions of income taxes for 4Q2023 by the China subsidiaries while no income taxes were provided in 4Q2022 due to the losses incurred then, as well as income tax provision for YA2024 at HQ.

Cash Flow Statement

The Group generated net cash of $23.12 million from operating activities in 2H2023, compared to net cash generated of $4.46 million in 2H2022 when business volume in China was significantly lower due to the zero-Covid policy at that time. Instalment repayment of borrowings and interest in 2H2023 totalled $0.53 million for the temporary bridging loan taken up by Singapore Flyer in July 2021.

As at 31 December 2023, the Group's cash and cash equivalent balance amounted to $169.80 million.

Commentary

The National Bureau of Statistics of China reported that China's gross domestic product ("GDP") grew 5.2% for the full year of 2023 following the lifting of Covid-19 restrictions at the beginning of the year, amid various support measures as well as a low base comparison from the prior year which was marked by Covid-19 lockdowns.

On the tourism sector, The China Tourism Academy has estimated that domestic tourism will see remarkable growth in both visitor numbers and revenue to over 6 billion domestic visits and 6 trillion yuan in 2024, following the recovery of tourism sector in 2023. Shanghai has also in December 2023 launched the "Visit Shanghai" campaign to boost inbound tourism, with the goal of making the city a world-famous tourist destination and the first stop in China for inbound travellers. The Shanghai Administration of Culture and Tourism reported that in 2024, Shanghai will continuously optimise its inbound tourism environment and attract more international tourists through various grand festive events such as the Shanghai Tourism Festival and the China Shanghai International Arts Festival. With the aim of prolonging overnight stay of inbound tourists and boosting their consumption, the city will launch multi-layered and differentiated tourist itineraries and develop a number of metropolitan tourist attractions, while also raising inbound tourism service experience by further easing the convenience of payment and customs clearance of inbound tourists.

Singapore's economy grew by 1.1% in 2023, as reported by the Ministry of Trade and Industry ("MTI"). On the tourism sector, the Singapore Tourism Board ("STB") had reported that Singapore's tourism sector recovered strongly with 13.6 million international visitor arrivals in 2023, and estimated tourism receipts of $24.5 to $26.0 billion. STB expects continual recovery of the tourism sector in 2024 on improved international flight connectivity and increased capacity, as well as the implementation of the mutual 30-day visa-free travel between China and Singapore.

However, external environment remain challenging and geopolitical uncertainties will continue to weigh on the global economy, dampen growth, and affect the pace of travel recovery. The Group will continue to monitor, adapt and manage the impact on its operations.