海天地悦旅(01832) - 2024 - 中期财报

Company Information Company Basic Information This section provides basic company information for Saipan Leisure Group Limited, including board members, legal advisors, auditors, registered office, principal place of business, principal bankers, share registrars, and listing location - The Board of Directors comprises executive, non-executive, and independent non-executive directors, with audit, remuneration, and nomination committees[2] - The company's auditor is Ernst & Young, and legal advisors include Deacons and Blair Sterling Johnson & Martinez, P.C.[2] - The company's shares are listed on The Stock Exchange of Hong Kong Limited, stock code 1832[3] Independent Review Report Review Conclusion and Going Concern Uncertainty Ernst & Young reviewed the interim financial information for the six months ended June 30, 2024, finding no material issues, but noted significant going concern uncertainty due to net current liabilities and a period loss, which did not modify the review conclusion - The auditor found no matters indicating that the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[6] - As of June 30, 2024, the Group had net current liabilities of USD 59,301,000 and a net loss of USD 9,743,000 for the period, indicating a material uncertainty regarding its ability to continue as a going concern[7] - The auditor did not modify its review conclusion regarding the material uncertainty related to going concern[7] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss Performance Overview For the six months ended June 30, 2024, Group revenue grew 46.6% to USD 21,097 thousand, operating loss narrowed 35.6% to USD 7,033 thousand, and total loss for the period decreased 26.3% to USD 9,743 thousand, with basic and diluted loss per share improving to (2.7) US cents Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2024 (USD thousands) | H1 2023 (USD thousands) | Change (USD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 21,097 | 14,391 | 6,706 | 46.6% | | Operating Loss | (7,033) | (10,929) | 3,896 | -35.6% | | Net Finance Costs | (2,710) | (2,287) | (423) | 18.5% | | Loss Before Tax | (9,743) | (13,216) | 3,473 | -26.3% | | Total Loss for the Period | (9,743) | (13,216) | 3,473 | -26.3% | | Loss Attributable to Owners of the Company | (9,667) | (13,112) | 3,445 | -26.3% | | Basic and Diluted Loss Per Share (US cents) | (2.7) | (3.6) | 0.9 | -25.0% | Condensed Consolidated Statement of Financial Position Assets, Liabilities, and Equity Status As of June 30, 2024, the Group's total assets slightly decreased to USD 151,724 thousand, while total liabilities increased to USD 110,261 thousand, leading to a reduction in total equity to USD 41,463 thousand, with current liabilities increasing by 11.8% indicating liquidity pressure Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2024 (USD thousands) | Dec 31, 2023 (USD thousands) | Change (USD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 133,799 | 138,155 | (4,356) | -3.2% | | Total Current Assets | 17,925 | 19,168 | (1,243) | -6.5% | | Total Assets | 151,724 | 157,323 | (5,599) | -3.6% | | Total Equity | 41,463 | 51,206 | (9,743) | -19.0% | | Total Non-Current Liabilities | 33,035 | 37,019 | (3,984) | -10.8% | | Total Current Liabilities | 77,226 | 69,098 | 8,128 | 11.8% | | Total Liabilities | 110,261 | 106,117 | 4,144 | 3.9% | - As of June 30, 2024, the Group recorded net current liabilities of USD 59,301 thousand[16] Condensed Consolidated Statement of Changes in Equity Analysis of Changes in Equity For the six months ended June 30, 2024, the Group's total equity decreased by USD 32,714 thousand due to the loss for the period, from USD 74,177 thousand as of January 1, 2023, to USD 41,463 thousand Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | June 30, 2024 (USD thousands) | Jan 1, 2023 (USD thousands) | Change (USD thousands) | | :--- | :--- | :--- | :--- | | Issued Share Capital | 461 | 461 | 0 | | Share Premium | 38,122 | 38,122 | 0 | | Capital Reserve | 27,006 | 27,006 | 0 | | Other Reserves | 4,836 | 4,836 | 0 | | Accumulated Losses (2024) / Retained Profits (2023) | (28,534) | 4,094 | (32,628) | | Subtotal Attributable to Owners of the Company | 41,891 | 74,519 | (32,628) | | Non-Controlling Interests | (428) | (342) | (86) | | Total Equity | 41,463 | 74,177 | (32,714) | Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2024, the Group generated net cash of USD 554 thousand from operating activities, a significant improvement from the prior year, but increased cash outflow from investing activities and a substantial decrease in financing cash inflow resulted in a net decrease of USD 361 thousand in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows | Metric | H1 2024 (USD thousands) | H1 2023 (USD thousands) | Change (USD thousands) | | :--- | :--- | :--- | :--- | | Net Cash Generated From / (Used In) Operating Activities | 554 | (5,247) | 5,801 | | Net Cash Used In Investing Activities | (1,489) | (6,317) | 4,828 | | Net Cash From Financing Activities | 574 | 11,198 | (10,624) | | Net Decrease in Cash and Cash Equivalents | (361) | (366) | 5 | | Cash and Cash Equivalents at End of Period | 4,077 | 3,085 | 992 | Notes to the Condensed Consolidated Interim Financial Information 1 General Information Saipan Leisure Group Limited is an investment holding company incorporated in the Cayman Islands, primarily operating hotels and resorts, luxury leisure apparel and accessories travel retail, and destination services in Saipan, Guam, and Hawaii, with Dr. Tan Siu Lin and Dr. Henry Tan as ultimate controlling parties - The Group's principal activities include hotel and resort operations, luxury travel retail, and destination services, primarily in Saipan, Guam, and Hawaii[14] - The ultimate controlling parties of the Company are Dr. Tan Siu Lin and Dr. Henry Tan[14] 2.1 Basis of Preparation This condensed consolidated interim financial information is prepared in accordance with HKAS 34 and the Listing Rules; the Group faces significant going concern uncertainty due to net current liabilities of USD 59,301 thousand and a period loss, but management has taken measures including bank covenant waivers, cash flow management, and shareholder loan commitments, leading the Board to consider the going concern basis appropriate - As of June 30, 2024, the Group had net current liabilities of USD 59,301 thousand and a net loss of USD 9,743 thousand for the period, raising significant doubt about its ability to continue as a going concern[16] - The Group received waivers from banks for non-compliance with financial covenants on bank facilities totaling USD 48,000 thousand, and the banks have no intention to withdraw facilities or demand immediate repayment[16] - The Group secured a shareholder loan facility of USD 32,000 thousand from Tan Holdings and a commitment for an additional USD 7,000 thousand standby shareholder loan facility and financial support[17] 2.2 Changes in Accounting Policies The revised HKFRSs, including amendments to HKFRS 16, HKAS 7, and HKAS 1, adopted for the first time in this period, had no significant impact on the Group's financial position or performance - Amendments to HKFRS 16 (Lease Liability in a Sale and Leaseback) had no impact on the Group's financial position or performance due to the absence of such transactions[19] - Amendments to HKAS 1 (Classification of Liabilities as Current or Non-current) had no impact on the Group's financial position or performance, as liability classification remained unchanged[20] - Amendments to HKAS 7 and HKFRS 7 (Supplier Finance Arrangements) had no impact on the condensed consolidated interim financial information, as the Group has no supplier finance arrangements[20] 3 Segment and Revenue Information The Group operates three reportable segments: hotels and resorts, luxury travel retail, and destination services; for the six months ended June 30, 2024, total revenue reached USD 21,097 thousand, a 46.6% increase year-on-year, primarily driven by the hotels and resorts segment - The Group has three reportable operating segments: hotels and resorts, luxury travel retail, and destination services[21] Segment Revenue and Operating Loss (H1 2024 vs H1 2023) | Segment | H1 2024 Revenue (USD thousands) | H1 2023 Revenue (USD thousands) | Revenue Change (%) | H1 2024 Segment Profit/Loss (USD thousands) | H1 2023 Segment Profit/Loss (USD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Hotels and Resorts | 17,157 | 10,683 | 60.6% | (5,784) | (9,501) | | Luxury Travel Retail | 3,506 | 3,472 | 1.0% | (333) | (463) | | Destination Services | 434 | 236 | 83.9% | (111) | (162) | | Total | 21,097 | 14,391 | 46.6% | (6,228) | (10,130) | - In H1 2024, hotel and resort operations contributed USD 17,077 thousand in revenue, luxury retail, souvenir, and convenience store operations contributed USD 3,876 thousand, and tour services contributed USD 64 thousand[26] 4 Net Other Income For the six months ended June 30, 2024, the Group's net other income was USD 1 thousand, a decrease from USD 6 thousand in the prior year, mainly due to reduced net exchange gains and no gain from disposal of low-value assets Net Other Income | Metric | H1 2024 (USD thousands) | H1 2023 (USD thousands) | | :--- | :--- | :--- | | Net Exchange Gain | 1 | 2 | | Gain on Disposal of Low-Value Assets | — | 4 | | Total | 1 | 6 | 5 Net Finance Costs For the six months ended June 30, 2024, the Group's net finance costs increased to USD 2,710 thousand from USD 2,287 thousand in the prior year, primarily due to higher interest expenses on bank and other borrowings Net Finance Costs | Metric | H1 2024 (USD thousands) | H1 2023 (USD thousands) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | — | 1 | | Interest Expense on Lease Liabilities | (414) | (438) | | Interest Expense on Bank Borrowings | (1,852) | (1,712) | | Interest Expense on Other Borrowings | (444) | (138) | | Net Finance Costs | (2,710) | (2,287) | 6 Loss Before Tax For the six months ended June 30, 2024, the Group's loss before tax narrowed to USD 9,743 thousand from USD 13,216 thousand in the prior year, with major expense items including cost of inventories sold, food and beverage costs, employee benefit expenses, and depreciation of property, plant and equipment Major Components of Loss Before Tax | Metric | H1 2024 (USD thousands) | H1 2023 (USD thousands) | | :--- | :--- | :--- | | Cost of Inventories Sold | 2,053 | 1,929 | | Food and Beverage Costs | 1,269 | 1,213 | | Employee Benefit Expenses | 7,314 | 7,600 | | Depreciation of Property, Plant and Equipment | 5,572 | 5,361 | | Depreciation of Investment Properties | 7 | 10 | | Amortisation of Intangible Assets | 8 | 9 | 7 Income Tax Credit For the six months ended June 30, 2024 and 2023, the Group incurred no taxable profits, thus no provision for profits tax was made in Hong Kong, CNMI, Guam, and Hawaii; subsidiaries in CNMI, Guam, and Hawaii are subject to a 21% corporate income tax rate, with CNMI's Business Gross Revenue Tax (BGRT) eligible for tax credit - As the Group generated no taxable profits, no provision for income tax was made for the six months ended June 30, 2024 and 2023[38] - Subsidiaries in CNMI, Guam, and Hawaii are subject to a 21% corporate income tax rate, and CNMI's BGRT can be used as a tax credit against corporate income tax[38] 8 Loss Per Share Attributable to Owners of the Company For the six months ended June 30, 2024, basic and diluted loss per share attributable to owners of the Company was (2.7) US cents, an improvement from (3.6) US cents in the prior year, calculated based on a loss of USD 9,667 thousand and a weighted average of 360,000,000 ordinary shares outstanding - For the six months ended June 30, 2024, basic and diluted loss per share was (2.7) US cents, an improvement from (3.6) US cents in the prior year[39] - Loss per share is calculated based on a loss attributable to owners of the Company of USD 9,667 thousand and a weighted average of 360,000,000 ordinary shares outstanding[39] 9 Dividends The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024, consistent with the prior year - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024[41] 10 Property, Plant and Equipment As of June 30, 2024, the net book value of property, plant and equipment was USD 125,850 thousand, a decrease from USD 130,042 thousand at the beginning of the year, primarily due to depreciation; certain hotel assets totaling USD 106,028 thousand are pledged as collateral for bank financing - As of June 30, 2024, the net book value of property, plant and equipment was USD 125,850 thousand[43] - Certain hotel assets of the Group, totaling USD 106,028 thousand, are pledged as collateral for bank financing[46] 11 Investment Properties As of June 30, 2024, the net book value of investment properties was USD 346 thousand, a slight decrease from USD 353 thousand at the beginning of the year, and these properties are also pledged as collateral for bank financing - As of June 30, 2024, the net book value of investment properties was USD 346 thousand[47] - Certain investment properties of the Group, totaling USD 346 thousand, are pledged as collateral for bank financing[47] 12 Intangible Assets As of June 30, 2024, the net book value of intangible assets, primarily computer software, was USD 38 thousand, a decrease from USD 46 thousand at the beginning of the year, mainly due to amortisation - As of June 30, 2024, the net book value of intangible assets was USD 38 thousand[49] 13 Inventories As of June 30, 2024, the Group's total inventories increased to USD 3,760 thousand from USD 3,131 thousand as of December 31, 2023, primarily driven by merchandise, with a provision of USD 12 thousand made for slow-moving inventories during the period Inventory Composition | Category | June 30, 2024 (USD thousands) | Dec 31, 2023 (USD thousands) | | :--- | :--- | :--- | | Merchandise | 3,604 | 3,131 | | Food and Beverages | 81 | — | | Others | 75 | — | | Total | 3,760 | 3,131 | - For the six months ended June 30, 2024, the Group made a provision of approximately USD 12 thousand for slow-moving inventories[50] 14 Trade Receivables As of June 30, 2024, net trade receivables decreased to USD 4,022 thousand from USD 5,579 thousand as of December 31, 2023, with a significant portion of receivables over 90 days and impairment provision maintained at USD 711 thousand - As of June 30, 2024, net trade receivables were USD 4,022 thousand, a 28% decrease from December 31, 2023[51] - As of June 30, 2024, trade receivables over 90 days amounted to USD 3,300 thousand, representing 82% of the total[52] - Impairment provision remained at USD 711 thousand[51] 15 Prepayments, Deposits and Other Receivables As of June 30, 2024, total prepayments, deposits, and other receivables decreased to USD 4,053 thousand from USD 4,485 thousand as of December 31, 2023, with the non-current portion amounting to USD 982 thousand Prepayments, Deposits and Other Receivables Composition | Category | June 30, 2024 (USD thousands) | Dec 31, 2023 (USD thousands) | | :--- | :--- | :--- | | Deposits | 837 | 840 | | Prepayments | 2,777 | 3,350 | | Other Receivables | 439 | 295 | | Total | 4,053 | 4,485 | | Classified as Current Assets | (3,071) | (3,354) | | Non-Current Portion | 982 | 1,131 | 16 Issued Share Capital and Share Premium As of June 30, 2024, issued share capital and share premium remained unchanged at USD 461 thousand and USD 38,122 thousand respectively, with a total of 360,000,000 ordinary shares issued - As of June 30, 2024, 360,000,000 ordinary shares were issued and fully paid, with a par value of HKD 0.01 per share[56] - Issued share capital was USD 461 thousand, and share premium was USD 38,122 thousand, both unchanged from December 31, 2023[56] 17 Trade and Other Payables As of June 30, 2024, total trade and other payables increased to USD 15,180 thousand from USD 14,112 thousand as of December 31, 2023, primarily due to an increase in trade payables to third parties and related parties Trade and Other Payables Composition | Category | June 30, 2024 (USD thousands) | Dec 31, 2023 (USD thousands) | | :--- | :--- | :--- | | Trade Payables to Third Parties | 3,544 | 2,811 | | Trade Payables to Related Parties | 803 | 572 | | Accrued Staff Salaries | 775 | 553 | | Other Taxes Payable | 1,205 | 1,432 | | Other Accruals and Payables | 6,721 | 6,612 | | Payables for Purchase of Property, Plant and Equipment | 2,132 | 2,132 | | Total | 15,180 | 14,112 | - Trade payables to related parties are unsecured, interest-free, and have a credit period of 30 days[57] 18 Bank Borrowings As of June 30, 2024, total bank borrowings slightly decreased to USD 46,508 thousand from USD 47,633 thousand as of December 31, 2023; all bank borrowings are classified as current liabilities due to repayment on demand clauses and non-compliance with financial covenants, though waivers were received post-reporting period, with an effective annual interest rate of 8.00% and collateralized by Group assets and corporate guarantees - As of June 30, 2024, total bank borrowings amounted to USD 46,508 thousand, comprising a USD 5,000 thousand revolving loan and USD 41,508 thousand term loans[59] - All bank borrowings are classified as current liabilities due to repayment on demand clauses and non-compliance with financial covenants, although waivers were received after the reporting period[59] - For the six months ended June 30, 2024, the effective annual interest rate for bank borrowings was 8.00%[60] 19 Other Borrowings As of June 30, 2024, other borrowings, primarily shareholder loans, increased to USD 31,380 thousand from USD 26,436 thousand as of December 31, 2023, with USD 13,500 thousand classified as current liabilities and USD 17,000 thousand as non-current liabilities; these unsecured loans from Tan Holdings carry annual interest rates between 2% and 5% - As of June 30, 2024, total other borrowings amounted to USD 31,380 thousand, with USD 13,500 thousand classified as current liabilities and USD 17,000 thousand as non-current liabilities[61][64] - These borrowings are primarily unsecured shareholder loans from Tan Holdings, with annual interest rates ranging from 2% to 5%[62][64] 20 Capital Commitments As of June 30, 2024, the Group's significant capital expenditure contracted but not yet recognized as liabilities amounted to USD 1,986 thousand, primarily for property, plant and equipment - As of June 30, 2024, capital commitments for property, plant and equipment amounted to USD 1,986 thousand[65] 21 Related Party Transactions The Group engaged in several significant related party transactions, including hotel service income, freight forwarding and logistics expenses, merchandise purchases, insurance expenses, and interest expenses; as of June 30, 2024, total amounts due from related parties were USD 434 thousand, and total amounts due to related parties were USD 250 thousand, with key management personnel compensation totaling USD 517 thousand Major Related Party Transactions (H1 2024 vs H1 2023) | Transaction Nature | H1 2024 (USD thousands) | H1 2023 (USD thousands) | | :--- | :--- | :--- | | Hotel Service Income | 1,464 | 198 | | Freight Forwarding and Logistics Expenses | 173 | 140 | | Purchase of Merchandise | 80 | 43 | | Insurance Expenses | 546 | 504 | | Interest Expense (Tan Holdings) | 444 | 138 | | Shared Service Expenses | 204 | 98 | | Staff Cost Expenses | 59 | 42 | | Rental and Outgoings Expenses | 179 | 123 | - As of June 30, 2024, total amounts due from related parties were USD 434 thousand, and total amounts due to related parties were USD 250 thousand, both unsecured, interest-free, and repayable on demand[68] - Key management personnel compensation totaled USD 517 thousand, including salaries, wages, bonuses, and retirement benefit costs[69] Management Discussion and Analysis I. Business Overview Global tourism continues to recover, with significant growth in visitor arrivals to Guam and Saipan, South Korea remaining a key source market, and the resumption of direct flights from Hong Kong to Saipan boosting Chinese visitor numbers; the Group's Crowne Plaza Resort Guam, Crowne Plaza Resort Saipan, and Century Hotel remain operational, while Kanoa Resort is temporarily closed for planned renovation - In H1 2024, visitor arrivals to Guam increased by approximately 30.7%, and to Saipan by approximately 49.6%[71] - South Korea is the largest source market for visitors to Guam and the Commonwealth of Northern Mariana Islands (CNMI)[71] - Hong Kong Airlines' resumption of direct flights from Hong Kong to Saipan led to an approximately 10-fold increase in Chinese (including Hong Kong) visitor arrivals to Saipan[72] Revenue and Operating Loss During the reporting period, Group revenue was approximately USD 21,097 thousand, a 46.6% year-on-year increase, primarily driven by rising hotel occupancy rates due to tourism recovery in Guam and Saipan; operating loss narrowed to USD 7,033 thousand, a USD 3,896 thousand decrease year-on-year, attributed to increased revenue, improved operational efficiency, and cost-saving measures including reduced employee costs - Revenue for the reporting period was approximately USD 21,097 thousand, a 46.6% year-on-year increase, with Guam operations' total revenue increasing by 27.7% and Saipan operations' total revenue increasing by 93.2%[73] - The significant increase in revenue was primarily due to the continued recovery of the tourism market in Guam and Saipan post-COVID-19 pandemic, leading to higher hotel and resort occupancy rates[73] - Operating loss was approximately USD 7,033 thousand, a USD 3,896 thousand year-on-year decrease, mainly due to increased revenue, improved operational efficiency, and a reduction in employee benefit expenses of approximately USD 286 thousand[74] II. Segment Review This section provides a detailed review of the Group's segment performance, with significant revenue growth in hotels and resorts, slight growth in luxury travel retail despite purchasing power impacts, and substantial growth in destination services, while all segments focus on improving operational efficiency and cost control - The Hotels and Resorts segment, Luxury Travel Retail segment, and Destination Services segment accounted for approximately 81.3%, 16.6%, and 2.1% of total revenue during the reporting period, respectively[75] Hotels and Resorts Segment The Hotels and Resorts segment revenue reached USD 17,157 thousand, a 60.6% year-on-year increase, driven by higher occupancy rates at Crowne Plaza Resort Guam and Crowne Plaza Resort Saipan; despite a negative segment profit, management continues to improve operational efficiency and implement cost-saving measures, with employee costs decreasing by 3.6% year-on-year, while Kanoa Resort remains closed for planned renovation - The Hotels and Resorts segment revenue was approximately USD 17,157 thousand, a 60.6% year-on-year increase, primarily contributed by higher occupancy rates at Crowne Plaza Resort Guam and Crowne Plaza Resort Saipan[76] - The Hotels and Resorts segment recorded a negative segment profit of approximately USD 5,784 thousand, which includes approximately USD 5,302 thousand in depreciation and amortisation expenses (non-cash items)[77] - Kanoa Resort remains closed, with plans for renovation and rebranding as "voco Resort Saipan" underway[80] Crowne Plaza Resort Guam Crowne Plaza Resort Guam's revenue increased by 40.4%, with occupancy rising by 46.5% and average room rate by 6.2%; despite typhoon Mawar damaging the breakwater and affecting operations, the resort achieved positive gross operating profit, benefiting from the IHG booking system and market recovery - Crowne Plaza Resort Guam's revenue increased by USD 2,880 thousand, a 40.4% year-on-year growth[78] - Occupancy rate increased by 46.5%, and average room rate increased by 6.2%[78] - The resort achieved positive gross operating profit, benefiting from the IHG booking system and the continued recovery of visitors from the US, South Korea, and Japan[78] Crowne Plaza Resort Saipan Crowne Plaza Resort Saipan's revenue grew 103.1% year-on-year, with occupancy increasing by 146.7%, achieving positive gross operating profit, driven by Marianas Visitors Authority (MVA) promotions in South Korea and the resumption of direct flights from Hong Kong to Saipan, boosting South Korean and mainland Chinese visitor numbers - Crowne Plaza Resort Saipan's revenue increased by USD 3,528 thousand or 103.1% year-on-year[79] - Occupancy rate increased by 146.7%, and the resort achieved positive gross operating profit[79] - Benefited from MVA's engagement and collaboration with South Korean tourism partners, and the resumption of direct flights from Hong Kong to Saipan, leading to increased mainland Chinese visitor arrivals[79] Kanoa Resort Kanoa Resort has been closed since July 2022 after completing an emergency contract; given the recovery of Saipan's tourism industry, the Group plans to renovate and rebrand it as "voco Resort Saipan" - Kanoa Resort has been closed since July 2022[80] - The Group plans to renovate and rebrand Kanoa Resort as "voco Resort Saipan"[80] Luxury Travel Retail Segment The Luxury Travel Retail segment's revenue was USD 3,506 thousand, a marginal 1.0% year-on-year increase; despite visitor recovery, currency weakness impacted purchasing power, and the Group is implementing cost-saving measures and relocating some Guam boutiques to stronger retail spaces to improve profitability - Luxury Travel Retail segment revenue was USD 3,506 thousand, a 1.0% year-on-year increase[81] - Visitor purchasing power decreased due to currency weakness[81] - The segment nearly broke even, with management continuously implementing cost-saving measures, reviewing loss-making brands, and relocating some Guam boutiques to stronger retail spaces[82] Destination Services Segment The Destination Services segment's revenue was USD 434 thousand, a significant 83.9% year-on-year increase, primarily due to increased convenience store operating revenue within Crowne Plaza resorts and substantial growth in Saipan tour revenue; segment loss was similar to the prior year, and management remains cautiously optimistic about future performance improvement - Destination Services segment revenue was USD 434 thousand, an 83.9% year-on-year increase[83] - The increase in revenue was mainly due to increased convenience store operating revenue within Crowne Plaza resorts and a significant increase in Saipan tour revenue[83] - Destination Services segment loss was USD 111 thousand, similar to the prior year[83] III. Material Acquisitions, Disposals and Significant Investments During the reporting period, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it hold any significant investments - During the reporting period, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[84] - The Group held no significant investments during the reporting period[84] IV. Events After Reporting Period Post-reporting period, the Group continues to expand its tourism market share in Guam and Saipan, collaborating with MVA to promote tourism; Kanoa Resort remains closed awaiting renovation plans, and the Group received a written commitment from Tan Holdings for a USD 7,000 thousand standby shareholder loan facility - The Group continues to focus on expanding its market share in the recovering tourism industries of Guam and Saipan, and collaborates with MVA to promote Saipan as a tourist destination[85] - Kanoa Resort remains closed, and the Group continues to plan its renovation and rebranding[85] - In August 2024, the Group received a written commitment letter from Tan Holdings for a USD 7,000 thousand standby shareholder loan facility[85] V. Liquidity, Financial Resources and Capital Structure The Group's financial position remains stable, with cash and bank balances totaling approximately USD 4,077 thousand; capital expenditure for the period was about USD 1,489 thousand; bank borrowings totaled USD 46,508 thousand, and other borrowings (shareholder loans) increased to USD 31,380 thousand; the gearing ratio rose to 112.2%, and the Board believes the Group has sufficient liquidity for the next 12 months - As of June 30, 2024, the Group's cash and bank balances totaled approximately USD 4,077 thousand[86] - Total capital expenditure for the reporting period was approximately USD 1,489 thousand, primarily for upgrade works at Crowne Plaza Resort Guam and Crowne Plaza Resort Saipan[86] - As of June 30, 2024, the Group had USD 41,508 thousand in interest-bearing term loans and USD 5,000 thousand in revolving loans[87] - As of June 30, 2024, the Group's gearing ratio was 112.2% (2023: 93.0%)[90] VI. Foreign Exchange Risk Management The Group's foreign exchange risk is not significant as its subsidiaries primarily operate in Saipan, Guam, and Hawaii, with most transactions settled in US dollars - The Group's foreign exchange risk is not significant, as most transactions are settled in US dollars[91] VII. Future Plans and Market Outlook The Group is cautiously optimistic about continued visitor growth in H2 2024 and will collaborate with tourism authorities to promote markets; hotel operations will focus on enhancing Crowne Plaza resorts' efficiency and F&B, and advancing Kanoa Resort's renovation; luxury travel retail plans to complete Guam boutique renovations and relocations, while the Group also explores potential M&A opportunities for long-term growth - CNMI and Guam tourism authorities continue to promote the market, with MVA launching the "Marianas Blues" campaign in Japan, and direct flights from Hong Kong to Saipan continuing to drive the recovery of the Chinese market[92][93] Tourism Market Outlook CNMI and Guam anticipate a steady increase in visitor arrivals, with MVA and Guam Visitors Bureau actively collaborating with key tourism partners and promoting destinations through social media and other channels, particularly targeting young visitors and Asian markets - CNMI visitor arrivals continue to rise steadily, with MVA strengthening ties and collaboration with South Korean tourism partners and launching the "Marianas Blues" campaign in Japan[92] - Guam Visitors Bureau engages and collaborates with major Japanese tourism partners and promotes Guam in Japan, South Korea, Taiwan, and the Philippines[93] Hotels and Resorts Segment Both Crowne Plaza resorts will continue to focus on gaining market share, improving operational efficiency, and promoting food and beverage businesses; renovation and rebranding plans for Kanoa Resort are underway, but the start date is yet to be determined, and the Group expects positive synergies from its three hotels once the tourism market fully recovers - Both Crowne Plaza resorts will continue to focus on gaining market share, improving operational efficiency, and promoting their food and beverage businesses[94] - Renovation and rebranding plans for Kanoa Resort are underway, but the start date is yet to be determined, with capital expenditure to be funded by internal resources and external financing[94] Luxury Travel Retail Segment The Group plans to complete the renovation and relocation of two Guam boutiques to stronger retail spaces in H2 2024 to enhance segment profitability, while Saipan and Hawaii boutiques will continue normal operations - The Group will focus on completing the renovation and relocation of two Guam boutiques to stronger retail spaces, expected to be completed by the end of 2024[95] - Capital expenditure for the new retail space renovations will be funded by landlord sponsorship, brand owner sponsorship, and the Group's internal resources[95] Other Plans and Prospects Group management will continue to prudently explore potential merger and acquisition opportunities to sustain long-term growth and maximize shareholder value - Group management continues to prudently explore potential merger and acquisition opportunities to sustain long-term growth[96] VIII. Pledge of Assets As of June 30, 2024, the Group's total bank facilities of USD 48,000 thousand were fully utilized and collateralized by certain buildings and investment properties owned by the Group - As of June 30, 2024, the Group's total bank facilities of USD 48,000 thousand were fully utilized and collateralized by certain buildings and investment properties[97] IX. Contingent Liabilities As of June 30, 2024, the Group had no significant contingent liabilities - As of June 30, 2024, the Group had no significant contingent liabilities[98] X. Employees and Remuneration Policy As of June 30, 2024, the Group had 351 full-time employees, a decrease from the prior year primarily due to operational efficiency review at Crowne Plaza Resort Guam; total staff costs for the reporting period were USD 7,314 thousand; the Group complies with labor regulations and has a share option scheme, but no options were granted or exercised during the period - As of June 30, 2024, the Group had 351 full-time employees, a decrease from 397 as of June 30, 2023[99] - Total staff costs (including directors' emoluments) for the reporting period were USD 7,314 thousand[99] - The Company adopted a post-IPO share option scheme, but no share options were granted, exercised, cancelled, or lapsed during the reporting period[99] Other Information I. Interim Dividend The Board of Directors resolved not to declare an interim dividend for the reporting period - The Board of Directors resolved not to declare an interim dividend for the reporting period[100] II. Purchase, Sale or Redemption of the Company's Listed Securities During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[101] III. Directors' and Chief Executive's Interests in Shares As of June 30, 2024, Dr. Tan Siu Lin and Dr. Henry Tan were both deemed to have an interest in 270,000,000 shares held by THC Leisure Holdings Limited, representing 75% of the Company's issued share capital - Dr. Tan Siu Lin and Dr. Henry Tan were both deemed to have an interest in 270,000,000 shares held by THC Leisure Holdings Limited, representing 75% of the Company's issued share capital[102] IV. Major Shareholders As of June 30, 2024, THC Leisure Holdings Limited, Tan Holdings Corporation, Leap Forward Limited, and Supreme Success Limited were all major shareholders, each holding or deemed to hold 270,000,000 shares, representing 75% of the Company's issued share capital - THC Leisure Holdings Limited, Tan Holdings Corporation, Leap Forward Limited, and Supreme Success Limited each held or were deemed to hold 270,000,000 shares, representing 75% of the Company's issued share capital[107] V. Use of Proceeds Update As of June 30, 2024, the Company's net proceeds from listing, totaling USD 39,400 thousand, have been fully utilized in accordance with the purposes outlined in the prospectus - The net proceeds from listing amounted to USD 39,400 thousand, and as of June 30, 2024, they have been fully utilized[109] - During the reporting period, USD 188 thousand of the net proceeds from listing were utilized[109] VI. Review of Interim Financial Information The Company's Audit Committee has reviewed the interim financial information and accounting principles, discussing audit, internal control, and financial reporting matters with management without objection; the Company's auditor, Ernst & Young, also conducted an independent review - The Audit Committee has reviewed the unaudited condensed consolidated interim financial information for the reporting period and had no disagreement[110] - The unaudited condensed consolidated interim financial information was also reviewed by the Company's auditor, Ernst & Young[110] VII. Corporate Governance Practices The Board of Directors has adopted and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the reporting period - The Company has complied with the code provisions of the Corporate Governance Code throughout the reporting period[111] VIII. Model Code The Company has adopted a code of conduct for directors' securities transactions no less stringent than the Model Code set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with this code during the reporting period - The Company has adopted a code of conduct for directors' securities transactions, and all directors confirmed compliance with this code during the reporting period[113] IX. Disclosure of Information on the Company's and HKEX Websites This interim report has been published on the Company's website (www.saileisuregroup.com) and the HKEX website (www.hkexnews.hk) in accordance with Rule 13.48(1) of the Listing Rules - This interim report has been published on the Company's website and the HKEX website[114]