Aseana Prop. Regulatory News (ASPL)

23 September 2020

Aseana Properties Limited("Aseana", the "Company" or, the "Group")

Half-Year Results for the Six Months Ended 30 June 2020

Aseana Properties Limited (LSE: ASPL), a property developer with investments in Malaysia and Vietnam, listed on the Main Market of the London Stock Exchange, announces its unaudited half-year results for the six-month period ended 30 June 2020.

Operational highlights:

· The RuMa Residences achieved approximately 70% sales to date based on sale and purchase agreements signed.

· Prior to the Movement Control Order ("MCO") issued on 18th March 2020 in Malaysia, The RuMa Hotel achieved an average occupancy rate of approximately 55% in January and about 40% in February. The hotel was closed in March 2020 and is targeted to re-open in October 2020.

· As reported in our Annual Report issued 24th July, 2020, Four Points by Sheraton Sandakan Hotel was closed in early 2020 due to the MCO in Malaysia and the decision to permanently close was taken when Marriott International terminated its hotel management agreement.

· The Harbour Mall Sandakan has slowly re-opened after the gradual lifting of the MCO, its performance has exceeded expectations with occupancy rates at about 94%, however the mall operator has had to rebate rental lease payments to tenants for the duration of the MCO when the mall was mostly closed.

· The City International Hospital ("CIH") has shown a decline in its operational performance due to the impact of the COVID virus, with outpatient and inpatient volumes decreasing by approximately 12% and 26% respectively compared to the same period in 2019. Additionally, in late July CIH had a patient who tested positive for the COVID virus which led to a temporary closure of the hospital until the Ministry of Health issued a "clean bill of health". Unfortunately, this temporary closure will exacerbate the already negatively impacted financial performance. The hospital reopened on 11th August, 2020.

Financial highlights:

· Other Income of US$8.6 million (H1 2019: US$11.0 million)

· Loss before tax of US$8.2 million (H1 2019: loss of US$5.2 million)

· Loss after tax of US$8.3 million (H1 2019: loss of US$5.8 million)

· Consolidated comprehensive loss of US$11.1 million (H1 2019: loss of US$5.9 million)

· Net asset value of US$100.3 million (31 December 2019 (audited): US$109.6 million) or US$0.50 per share (31 December 2019 (audited): US$0.55 per share)

Commenting on the results, Nick Paris, Chairman of Aseana, said:

"The H1 2020 results are reflective of the challenging market conditions in Malaysia and Vietnam resulting from the negative impact of COVID 19 and the actions taken by the respective governments to contain the spread of the virus. Nonetheless, the Company is focused on improving the operational performance and narrowing the losses of its operating assets to improve the sale prospects of the remaining assets and to realise the sale of those assets in a controlled, orderly and timely manner".

For further information:

Notes to Editors:

London-listed Aseana Properties Limited (LSE: ASPL) is a property developer with investments in Malaysia and Vietnam which is in the process of realising its assets.

CHAIRMAN'S STATEMENT

Introduction

I am pleased to report on the results of Aseana Properties Limited and its Group of companies for the six months ended 30 June 2020.

The global economy experienced a significant growth shock during the first six months of 2020 triggered by the spread of the COVID virus around Asia and the measures put in place to control it. These severely curtailed the movement of people between and within countries which then impacted the hospitality and services businesses on which Aseana concentrates. Malaysia registered a GDP growth of 0.7% in Q1 2020 but a GDP decrease of 17.1% in Q2 2020 compared to growth of 4.7% for the six months period last year (1H 2019). Vietnam experienced two quarters of weak growth and overall 1H 2020 growth of 1.81% compared to growth of 6.7% in the same period last year.

Interim Results for the Half Year ended 30th June 2020

Our interim results in this period reflect the significant impact of the COVID virus on our businesses particularly after the governments of both Malaysia and Vietnam introduced movement controls on their citizens and on foreign visitors in March. As a result our two hotels had to shut, our shopping mall had to close for all but essential shopping and our hospital in Ho Chi Minh saw a reduction in elective surgeries and overall patient admissions. Our revenue on all of our assets was severely reduced and despite significant cost cutting initiatives which were undertaken by the Board, operating losses and increased cash outflows were inevitable. As a result the consolidated loss for Aseana for the half year increased to US$11.1 million (1H 2019 - US$5.9 million).

The movement controls also severely hampered our asset sale activities as prospective buyers were unable to carry out their on the ground due diligence. Nevertheless, we did sell two of our three plots of undeveloped beachfront land in Kota Kinabalu in July for a price representing 90% of their carrying value and completion of those sales is still expected in October. We are working hard to restart sale discussions on our other assets but as yet the movement controls have still not been relaxed sufficiently to permit prospective foreigner buyers to enter either Malaysia or Vietnam.

The Board undertakes annual revaluations of the Group's properties and this was last done in connection with the Annual Report for the year ended 31st December 2019. The next full valuation will be carried out at this financial year end and your Directors have not made any impairments to the carrying value of the assets in these Interim results as they believe that it is not yet possible to gauge the impact of the virus on their long term business models or the appetite of potential investors for our remaining assets. Nevertheless, the loss which we are reporting for the six months ended 30th June 2020 has reduced our Net Asset Value per Share from US$0.55 to US$0.50.

An update on our Assets

The RuMa Hotel has not yet been re-opened although preparations have been made to do so. However, an important component of its target market comprises foreign tourists and business people and they are still not permitted to enter Malaysia.

Local movement controls have recently been reduced within Malaysia and we have therefore fully re-opened our shopping mall in Sandakan and occupancy of it has been re-built to previous levels. Our hotel in Sandakan remains shut following the resignation of Marriott International as its operator and running costs have been cut to the minimum required to maintain the condition and security of the building. We now intend to re-market the hotel as a standalone entity which can be more easily absorbed by another hotel group without the need to remove an incumbent manager.

Our hospital in Ho Chi Minh remains open but recent virus outbreaks starting in central and southern Vietnam have made the local population wary of attending medical facilities. It will therefore take time to re-build business levels.

The Demerger Proposal

As Shareholders will know, we are proposing a demerger of the interests of Ireka and Legacy Essence and other related parties from those of Aseana and I thank our Shareholders for their support at our own EGM which was held on 18 August. We now await approval from the shareholders of Ireka and from our bankers and we hope to complete the demerger in October. Once the demerger completes, Aseana will divest two assets being The RuMa Hotel & Residences and the remaining plot of undeveloped land in Kota Kinabalu and will have four assets remaining. The Aseana shares owned by the demerging Shareholders will be bought back from them in exchange for demerging the nominated assets to a new investment vehicle and those Shares will then be cancelled by the Company. As a result, the number of Aseana Shares will be reduced by approximately half and our market capitalisation on the London Stock Exchange will fall by the same percentage.

Our Business Focus and Property Divestments

Our current business focus for the Group is on reducing our costs to preserve our cash balances and on improving the operational performances of our remaining assets. The sale of the land plots in July and completion of the demerger transaction should bring in some modest cash inflows and we will use these to finance the operations of the remaining assets whilst we seek to sell them.

The impact of the COVID virus stopped all active sale discussions on our assets in March and the ongoing effect on operating revenues and costs at our assets is difficult at this stage for prospective buyers to quantify. However, we have already restarted sale discussions on some of those assets in order to seek to realise them in a controlled, orderly and timely manner and to return surplus sale proceeds after repaying their attributable borrowings to our remaining Shareholders.

Acknowledgements

I would like to take this opportunity to thank my colleagues on the Board and throughout our Group and our external advisors, bankers and service providers for their tireless efforts on behalf of the Group and its Shareholders. This has been a very challenging period in the corporate life of Aseana and the proposed demerger transaction will mark a major watershed point. Assuming that it completes, our Group will undergo a significant transformation for the better - leaner but with significantly improved cash-flows and we can concentrate on the task of selling our remaining assets.

NICK PARIS

Chairman

23 September 2020

PROPERTY PORTFOLIO AS AT 30 JUNE 2020

*Shareholding as at 30 June 2020

n/a: Not available/ Not applicable

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2020

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the SIX MONTHS ended 30 JuNE 2020 - Unaudited

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the SIX MONTHS ended 30 JuNE 2019 - Unaudited

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2019 - audited

#represents 2 management shares at US$0.05 each

(ii) Included in short term bank deposits and cash and bank balance is US$2,502,000 (31 December 2019:US$4,380,000; 30 June 2019: US$5,012,000) pledged for loans and borrowings and Medium Term Notes of the Group.

The notes to the financial statements form an integral part of the financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2020

1 General Information

The principal activities of the Group are the development of upscale residential and hospitality projects, sale of development land and operation and sale of hotels, a shopping mall and a hospital in Malaysia and Vietnam.

2 Summary of Significant Accounting Policies

2.1 Basis of Preparation

The interim condensed consolidated financial statements for the six months ended 30 June 2020 have been prepared in accordance with IAS 34, Interim Financial Reporting.

The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2019 which have been prepared in accordance with IFRS.

Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual earnings.

The interim results have not been audited nor reviewed and do not constitute statutory financial statements.

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2019 as described in those annual financial statements.

The interim report and financial statements were approved by the Board of Directors on 23 September 2020.

3 SegmentAL Information

The Group's assets and business activities were managed by Ireka Development Management Sdn. Bhd. ("IDM") as the Development Manager under a Management Agreement dated 27 March 2007. IDM resigned on 21 March 2019 and served out their notice period until 30 June 2019. Following that date, the Company has been managed by its Board of Directors with the assistance of certain staff seconded to the Company by Ireka and a Chief Executive Officer who resigned in January 2020. On 31 May 2020 the Company terminated the Services Agreement and also the staff secondment arrangements with Ireka and has engaged a few staff directly to run its finances and operations.

Segmental information represents the level at which financial information is reported to the Board of Directors, being the chief operating decision makers as defined in IFRS 8. The Directors determine the operating segments based on reports reviewed and used by their staff for strategic decision making and resource allocations. For management purposes, the Group is organised into project units.

The Group's reportable operating segments are as follows:

(i) Investment Holding Companies - investing activities;

(ii) Ireka Land Sdn. Bhd. - developed Tiffani ("Tiffani") by i-ZEN;

(iii) ICSD Ventures Sdn. Bhd. - developed, owns and operates Harbour Mall Sandakan ("HMS") and Four Points by Sheraton Sandakan Hotel ("FPSS");

(iv) Amatir Resources Sdn. Bhd. - developed SENI Mont' Kiara ("SENI");

(v) The RuMa Hotel KL Sdn Bhd  - operates The RuMa Hotel

(vi) Urban DNA Sdn. Bhd.- developed and owns The RuMa Hotel and Residences ("The RuMa") and

(vii) Hoa Lam-Shangri-La Healthcare Group - master developer of International Healthcare Park ("IHP"); developed, owns and operates the City International Hospital ("CIH").

Other non-reportable segments comprise the Group's other development projects. None of these segments meets any of the quantitative thresholds for determining reportable segments in 2020 and 2019.

Information regarding the operations of each reportable segment is included below. The Board of Directors monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. Performance is based on segment gross profit/(loss) and profit/(loss) before taxation, which the Directors believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets presented inclusive of inter-segment balances and inter-segment pricing is determined on an arm's length basis.

The Group's revenue generating development projects are located in Malaysia and Vietnam.

Operating Segments ended 30 June 2020 - Unaudited

Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items

Operating Segments ended 30 June 2019 - Unaudited

Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items

Operating Segments - Year ended 31 December 2019 - Audited

Reconciliation of reportable segment revenues, profit or loss, assets and liabilities and other material items

Geographical Information - six months ended 30 June 2020 - Unaudited

Geographical Information - six months ended 30 June 2019 - Unaudited

Geographical Information - year ended 31 December 2019 - Audited

In the financial period/year ended 30 June 2020; 30 June 2019; 31 December 2019, no single customer exceeded 10% of the Group's total revenue.

4 Seasonality

The Group's business operations were not materially affected by seasonal factors for the period

under review but was affected by the MCO resulting from the Covid 19 pandemic.

5 Cost of Sales

6 Foreign exchange (LOSS)/GAIN

7 Taxation

The numerical reconciliation between the income tax expense and the product of accounting results multiplied by the applicable tax rate is computed as follows:

The applicable corporate tax rate in Malaysia is 24%.

The applicable corporate tax rates in Singapore and Vietnam are 17% and 20% respectively.

A subsidiary of the Group, CIH is granted preferential corporate tax rate of 10% for the results of the hospital operations. The preferential income tax is given by the government of Vietnam due to the subsidiary's involvement in the healthcare industry.

The Company is treated as a tax resident of Jersey for the purpose of Jersey tax laws and is subject to a tax rate of 0%. The Company is also registered as an International Services Entity so it does not have to charge or pay local Goods and Services Tax. The cost for this registration is £200 per annum.

The Directors intend to conduct the Group's affairs such that the central management and control is not exercised in the United Kingdom and so that neither the Company nor any of its subsidiaries carries on any trade in the United Kingdom. The Company and its subsidiaries will thus not be residents in the United Kingdom for taxation purposes. On this basis, they will not be liable for United Kingdom taxation on their income and gains other than income derived from a United Kingdom source.

8 (LOSS)/EARNINGS Per Share

Basic and diluted (loss)/earnings per ordinary share

The calculation of basic and diluted (loss)/earnings per ordinary share for the period/year ended was based on the (loss)/profit attributable to equity holders of the parent and a weighted average number of ordinary shares outstanding, calculated as below:

9 Loans and Borrowings

The effective interest rates on the bank loans and finance lease arrangement for the period ranged from 5.55% to 11.30% (30 June 2019: 5.25% to 12.50%; 31 December 2019: 5.55% to 11.30%) per annum and 2.50% (30 June 2019: 2.50%; 31 December 2019: 2.50%) per annum respectively.

Borrowings are denominated in Malaysian Ringgit, United States Dollars and Vietnamese Dong.

Bank loans are repayable by monthly, quarterly or semi-annual instalments.

Bank loans are secured by land held for property development, work-in-progress, operating assets of the Group, pledged deposits and some by the corporate guarantee of the Company.

Reconciliation of movement of loans and borrowings to cash flows arising from financing activities:

10 Medium Term Notes

Reconciliation of movement of medium term notes to cash flows arising from financing activities: