Aseana Prop. Regulatory News (ASPL)

29 Apr 2008 07:01

Aseana Properties Limited29 April 2008 Date: 29 April 2008On 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 Asianproperty developer investing in Malaysia and Vietnam and quoted on the OfficialList of the London Stock Exchange, is pleased to announce the audited results ofthe Company and its subsidiaries (the "Group") for the period 22 September 2006to 31 December 2007. These results have been audited by the Company's auditors,Mazars LLP, in accordance with the International Financial Reporting Standardsas adopted by the European Union and the consolidated Financial Statementsaccording 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, Chairmanof Aseana Properties Limited, said: "The Group will continue to be active in Vietnam sourcing new opportunitiesand reinforcing business networks. Leveraging the development experience ofIreka, the Development Manager, we believe that the Group is very well placed totake 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, Vietnamcontinues to progress steadily. We expect the implementation of some of thecountry's infrastructure and development projects to create a sufficient levelof domestic consumption growth, which we expect will fuel the real estatedevelopment market in Vietnam. We remain optimistic of the Group's performancein Vietnam. "In Malaysia, in view of the country's strong economic fundamentals anddespite the current global financial uncertainties, we are confident that thelocal real estate market will continue to perform well over 2008 and beyond." Enquiries: Aseana Properties Limited Contactable via Redleaf Redleaf Communications Tel: 020 7822 0200Adam Leviton / Samantha Robbins Email: al@redleafpr.com Fairfax I.S. PLC Tel: 020 7598 5368James 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 LondonStock Exchange on 5 April 2007. Amidst the current challenging global marketconditions, Aseana Properties and its group of companies ("the Group")have established a strong presence in the real estate market in Malaysia andVietnam in 2007. The goal is to become a gateway for investments into these tworising property markets of South East Asia. Key milestones achieved this yearinclude: • 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 KualaLumpur, Kota Kinabalu and Sandakan in Malaysia, and Ho Chi Minh City and Da Nangin Vietnam. Leveraging on the strengths of Ireka Development Management Sdn.Bhd. ("the Development Manager"), Aseana Properties has remained focusedon the premier segment of the property markets of Malaysia and Vietnam as thesetwo countries continue to achieve robust economic growth. In 2008, the main focus in Malaysia will be centred on implementing anddelivering existing projects in the portfolio. Several of these projects arenow in full swing of the development cycle and are expected to contributepositively to the Group, commencing in the current financial year. In Vietnam,Aseana Properties will continue to seek investment opportunities to strengthenand deepen our presence there. For the investments committed, the DevelopmentManager is making good headway in obtaining approvals from the respectiveauthorities. The management are confident that some of these projects will beable to commence construction in 2008. On a macroeconomic front, the Group will continue to monitor closely the issuesand developments in the global credit and banking industry and the effects itmay have on our investments. The approach adopted is to ensure that the Grouphas in place a prudent debt-equity structure for its investments, by closelyaligning the debt and equity requirements with the nature of cash flows andtenure of the projects. Though relatively new as a Group, we strive for excellence. This is reflected inour expectations from the management of total diligence, commitment toexcellence and integrity. We believe the strengths and experience of theappointed Development Manager in hands-on execution, local market knowledge andinnovation in products will be key to our performance in 2008. On a personal note, I would like to take this opportunity to thank my fellowDirectors for their commitments and invaluable counsel over the period. I alsowish to extend my thanks to shareholders, government authorities, bankers andbusiness associates for their continued support and confidence in the Companyand the Group. Dato' Mohammed Azlan Bin Hashim Chairman 29 April 2008 FINANCIAL HIGHLIGHTS PERFORMANCE SUMMARY Period ended 31 December 2007Total ReturnOrdinary share price 4.25%FTSE All-share index 5.32%FTSE Real Estate Index -36.80% Capital ValuesTotal assets less current liabilities (US$ M) 301.96Net asset value per share (US$) 0.95Ordinary share price (US$) 1.04FTSE Real Estate Index 3,627.60 GearingGearing (Note 1) 33.38%Gearing (net of cash) -17.94% Earnings Per ShareEarnings per ordinary share - basic -1.76 - diluted -1.76 Total Expenses RatioAs 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 whilethe FTSE indices are on calendar year. Audited Consolidated Income StatementFor the period 22 September 2006 to 31 December 2007 2007Continuing activities Notes US$Revenue 3 45,176,071Cost of sales (46,239,698)Gross loss (1,063,627)Other income 1,084,430Administrative expenses (976,293)Management fees 4 (3,631,693)Other operating expenses (848,064)Operating loss (5,435,247)Investment income 4,320,485Finance costs (132,689)Net loss before taxation (1,247,451)Taxation 5 (1,982,731)Net loss for the period (3,230,182)Equity minority interest (29,998)Loss for the period attributable to the equity (3,260,180)holders of the parent Loss per share attributable to shareholders of the company - US cents per share • Basic 6 (1.76) • Diluted 6 (1.76) Audited Consolidated Balance Sheet as at 31 December 2007Assets Group US$Non-current assetsProperty, plant & equipment 389,556Investment in associate 12Prepaid land lease payment 2,300,663Land held for property development 16,798,134Long term receivables 6,048,000Total non-current assets 25,536,365Current assetsProperty development costs 213,585,677Trade and other receivables 18,609,214Cash and cash equivalents 122,890,641Total current assets 355,085,532TOTAL ASSETS 380,621,897Equity and Liabilities EquityShare capital 12,500,000Share premium 227,233,267Share based payment reserve 117,799Exchange fluctuation reserve 469,497Retained earnings (2,725,443)Shareholders' equity 237,595,120Minority interests 1,845,682Total equity 239,440,802Current liabilitiesTrade and other payables 58,269,002Finance lease liabilities 23,939Bank loans and borrowings 17,381,300Current tax liabilities 2,986,364Total current liabilities 78,660,605Non-current liabilitiesFinance lease liabilities 41,971Bank term loans 26,584,146Long term loans 35,890,646Deferred tax liabilities 3,727Total non-current liabilities 62,520,490Total liabilities 141,181,095TOTAL 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 ReserveGroup US$ US$ US$ US$ US$ US$ Issue of shares - 12,500,000 237,500,000 - - 250,000,000Loss for the financial period (3,260,180) - - - - (3,260,180)Fair value of share options - - (652,536) 652,536 - -grantedFair value of share options 534,737 - - (534,737) - -exercisedShare issue costs - - (9,614,197) - - (9,614,197)Currency translation - - - - 469,497 469,497differencesShareholders' equity as at (2,725,443) 12,500,000 227,233,267 117,799 469,497 237,595,12031 December 2007 Audited Consolidated Cash Flow StatementFor the period 22 September 2006 to 31 December 2007 Group US$Cash Flows from Operating ActivitiesNet loss for the financial period (1,247,451)Depreciation of property, plant & equipment 30,953Amortisation of leasehold land payment 9,916Operating profit before working capital changes (1,206,582)Changes in working capital:Decrease in inventories 2,167,598Increase in property development costs (3,743,106)Increase in leasehold land payment (2,300,663)Increase in receivables (5,079,922)Increase in payables 12,155,747Net cash used in operations 1,993,072Tax paid (1,142,124)Net cash flows from operating activities 850,948Cash Flows From Investing ActivitiesAcquisition of subsidiaries, net of cash (37,883,066)Acquisition of land held for property (13,212,866)Advances to associate 252,019Purchase 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 ActivitiesNet proceeds from issue of shares 152,385,803Repayment of borrowings (22,774,397)Drawdown of borrowings 41,067,791Repayment of finance lease liabilities (96,086)Repayment of amount owing to directors (889,021)Net cash flows generated from financing activities 169,694,090NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE FINANCIAL PERIOD 119,651,646Effect of changes in exchange rates 469,497CASH 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 September2006 under the laws of Jersey. The Company was registered under the number94592. The Company's registered office is located at Walker House, 28-34 HillStreet, St. Helier, JE4 8PN. The Company is domiciled in Jersey. On 5 April 2007, the Company was listed on the main market of theLondon Stock Exchange. The principal activities of the Group are acquisition, developmentand redevelopment of upscale residential, commercial and hospitality projects inthe major cities of Vietnam and Malaysia. The Group will typically invest indevelopment projects at the pre-construction stage and also selectively investin projects in construction and newly completed projects with potential capitalappreciation. The financial information set out in this announcement does notconstitute the Company's statutory financial statements for the period ended 31December 2007, but is derived from those financial statements. The auditorshave reported on the statutory financial statements for the period ended 31December 2007; their report was unqualified. This announcement was approved by the Board of Directors on 29 April2008. 2 Basis of Preparation The final results have been prepared in accordance with the accounting policiesadopted by the Company and are consistent with those adopted in the Company'sinterim results for the period ended 30 June 2007. The Group financialstatements have been prepared in accordance with International FinancialReporting Standards ("IFRS"), and IFRIC interpretations issued, andeffective, or issued and early adopted, as at the date of these financialstatements. The Group financial statements have been prepared under thehistorical cost convention as modified for financial assets and financialliabilities at fair value. There are no comparative consolidated financial statements as this is the firstreport since the company's incorporation. The Group has not adopted certain standards in the preparation of the financialstatements as they are either not effective as at 31 December 2007 or notapplicable to the Group's business. 3 Revenue and Segmental Information The gross revenue represents the proportionate sales value of developmentproperties attributable to the work in progress performed for the period 15 Mayto 31 December 2007. The Company is an investment holding company and has no operating revenue. TheGroup operating revenue for the period mentioned are from the sale ofdevelopment properties in Malaysia. The Company's property investment in Vietnamhas not commenced business. Group US$Revenue from sale of development properties 43,073,785Sales of completed units 2,102,286 45,176,071 The Directors consider that the Group has only one reportable segment and theresults and position of this segment is as disclosed in the Consolidated IncomeStatement and Consolidated Balance Sheet. 4 Management Fees Under the Management Agreement between the Company and Ireka DevelopmentManagement Sdn Bhd dated 27 March 2007, the Company shall pay to the DevelopmentManager a fee in respect of managing the assets of the Group and otherobligations 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 inadvance. In addition to the annual management fee, the Development Manager shall beentitled to a performance fee calculated at 20% of the out performance net assetvalue over a total return hurdle rate of 10%. No performance fee has been paidduring the period ended 31 December 2007. 5 Taxation Group US$Current period 1,997,209Deferred tax (14,478)Total tax expense for the period 1,982,731 The numerical reconciliation between the income tax expenses and the product ofaccounting profit multiplied by the applicable tax rate is computed as follows: Group US$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 3,683,488Less :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 Article123A of the Income Tax (Jersey) Law 1961 (as amended). The effect of suchspecial status is that the Company is treated as non-resident company for thepurpose of Jersey tax laws and is therefore exempt from Jersey income tax on itsprofits arising outside Jersey, and, by concession, on bank deposit interestarising in Jersey and from any obligation to withhold Jersey income tax from anyinterest or dividend payments made by it. This status is renewable on an annualbasis 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 centralmanagement and control is not exercised in the United Kingdom and so thatneither the Company nor any of its subsidiaries carries on any trade in theUnited Kingdom. The Company and its subsidiaries will thus not be residents inthe United Kingdom for taxation purposes. On this basis, they will not beliable for United Kingdom taxation on their income and gains other than incomederived from a United Kingdom source. Certain subsidiaries in Malaysia are subject to Malaysian income tax on incomearising from property development activities after deduction of allowableexpenses. 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 185,616,440Diluted 186,050,708Loss per share (US cents) :Basic 1.76Diluted 1.76 Basic loss per share is calculated by dividing the net loss for the period ofthe Company by the weighted average number of ordinary shares in issue duringthe period. For diluted loss per share, the weighted average number of ordinary shares inissue is adjusted to assume conversion of all potential dilutive options overordinary shares. Potential ordinary shares resulting from the exercise of shareoptions have an anti-dilutive effect. 7 Acquisition of Business Aseana Properties Limited is the parent company of a group of companies involvedin property development business. The acquisition of the following companies bythe Company was completed on 15 May 2007 and funded by raising US$88 million bythe issue of 88 million ordinary shares in Aseana Properties at an issue priceof 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 IrekaLand Sdn Bhd for a total consideration of US$49.117 million. The transaction hasbeen accounted for using the purchase method of accounting. Net Assets US$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) 8,390,228Fair value adjustment to property development costs 40,726,538Fair value of net assets acquired 49,116,766Satisfied by:Issuance of shares 34,587,457Cash consideration (including deferred cash consideration as 14,529,309disclosed in Note 7 (c))Total consideration 49,116,766Net cash outflow arising on acquisition (see Note 7 (c)) Ireka Land Sdn Bhd contributed US$39.253 million revenue and profit of US$6.862million to the Group's loss before tax for the period between the date ofacquisition and the balance sheet date. There are no other fair value adjustments other than the adjustment disclosedabove relating to property development costs. If the acquisition of Ireka Land Sdn Bhd had occurred on 1 January 2007, theywould have added approximately US$42.949 million to Group income and a profit ofapproximately 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 AmatirResources Sdn Bhd for a total consideration of US$66.428 million. Thetransaction has been accounted for by using the purchase method of accounting. Net Assets US$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) 255,629Fair value adjustment to property development costs 66,172,832Total consideration 66,428,461Satisfied by:Issuance of shares 39,086,377Deferred cash consideration 4,645,832Cash consideration 22,696,252Total consideration 66,428,461Net cash outflow arising on acquisitionCash consideration 27,342,084Less 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 ofUS$0.528 million to the Group's loss before tax for the period between the dateof acquisition and the balance sheet date. There are no other fair value adjustments other than the adjustment disclosedabove 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 aprofit of approximately US$0.597 million to Group loss before tax for theperiod. (c) Acquisition of ICSD Ventures Sdn Bhd On 15 May 2007, the Group acquired 60% of the issued share capital of ICSDVentures Sdn Bhd for a total consideration of US$20.344 million. The transactionhas been accounted for by the purchase method of accounting. Net Assets US$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) 1,642,635Fair value adjustment to property development costs 18,701,588Total 20,344,223Satisfied by:Issuance of shares 14,326,166Cash consideration (including deferred cash consideration as disclosed 6,018,057below)Total consideration 20,344,223 ICSD Ventures Sdn Bhd contributed US$3.984 million revenue and a loss ofUS$0.863 million to the Group's loss before tax for the period between the dateof acquisition and the balance sheet date. There are no other fair value adjustments other than the adjustment disclosedabove relating to property development cost. If the acquisition of ICSD Ventures Sdn Bhd had occurred on 1 January 2007, theywould have added approximately US$3.984 million to Group income and a loss ofapproximately 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 20,547,366Less deferred cash consideration (3,256,674)Cash and cash consideration (4,582,880) 12,707,812 This information is provided by RNS The company news service from the London Stock Exchange