Straco Corporation Limited • Annual Report 2014
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“IN SINGAPORE, THE FLYER ACQUISITION WAS
PREMISED ON THE RISE OF THE ASEAN ECONOMY,
SINGAPORE’S STANDING AS A TOP ASIAN
DESTINATION, AND THE ATTRACTION’S ICONIC
LOCATION IN THE MARINA BAY SKYLINE.”
CHAIRMAN’S STATEMENT
SUSTAINED GROWTH AMID GLOBAL UNCERTAINTY
2014 marked a new phase in Straco’s growth story. Following a year-long, rigorous
bidding process, the Group emerged as the new owner of the Singapore Flyer,
one of the world’s largest observation wheels and an iconic landmark in the
Singapore Skyline. This acquisition represents a considerable boost to our portfolio
of tourism assets, and is set to create further value with our proven best practices,
a strengthened operations team, as well as enhancements to the assets and visitor
experience.
The Group’s operations remained strong, as overall visitations increased for our
mainland China projects. After including the Singapore Flyer’s operating results
for the month of December, the highlights of our 2014 operating performance
include:
• A 26.7% increase in revenue to $92.3 million
• A 10.5% increase in net profit to $37.7 million
• Operating cash flow of $37 million generated
In view of our good performance, we are proposing a first and final dividend
of 2 cents per share this year. The proposed payment represents 45% of the
net distributable profit for the year. We will continue to reward our supportive
shareholders, subject to the need to balance our cash requirements for business
expansion and capital asset replacement.
REGULATORY SHIFTS IN CHINA, A NEW CHAPTER IN SINGAPORE
This past year, we continued to feel the after effects of regulatory reform in China.
The China Tourism Law introduced in the preceding year has led to a relative decline
in group travel for domestic tourists, but supports the general trend towards free
individual travelers, which bodes well for our visitor yields.
Towards the end of the year, we also saw the introduction of new government
guidelines and oversight to manage visitor flows to tourist attractions to ensure
orderliness and to prevent overcrowding. These include the regulation of traffic
to tourism zones in China, including those where our attractions are situated.
These measures will work in concert with new policies on paid leave, which will
