Financial Performance - The company's revenue for the fiscal year 2021 was $19.801 million, a decrease of 51.4% from $40.784 million in 2020[11]. - Operating loss for 2021 was $6.247 million, improving from a loss of $12.194 million in 2020[11]. - Loss attributable to owners of the company was $5.952 million, compared to $9.320 million in the previous year, representing a reduction of 36.5%[11]. - The company reported a loss margin of -30.1% on revenue for 2021, compared to -22.9% in 2020[11]. - Revenue from the company's operations in Saipan and Guam decreased by 40.7% and 81.1% respectively, primarily due to the ongoing impact of COVID-19 and the closure of CP Guam and CP Saipan for renovations[36]. - The company achieved an operating loss of approximately $6.3 million, a reduction of about $5.9 million compared to last year's operating loss of $12.2 million[39]. - The hotel and resort segment generated revenue of approximately $15.2 million, a decrease of $14.9 million or 49.5% compared to last year, primarily due to the closure of CP Guam and CP Saipan for renovations[42]. - The luxury travel retail segment reported revenue of $4.4 million, down $5.7 million or 56.4% year-over-year, mainly due to the ongoing global travel market downturn[47]. - The destination services segment generated revenue of $200,000, a decrease of $400,000, with a loss of $200,000 due to the continued suspension of operations[49]. Renovation and Upgrades - The company has focused on the renovation and upgrade of Crowne Plaza Resort Guam and Crowne Plaza Resort Saipan during the pandemic[21]. - Renovation progress was delayed due to temporary shutdowns of furniture manufacturers and material suppliers in Vietnam and the U.S.[21]. - The renovation of CP Guam was temporarily halted due to the discovery of artifacts and human remains during the demolition process[21]. - The company expects the rebranding and reopening of CP Guam and CP Saipan to occur in the second to third quarter of 2022, pending final confirmation from hotel management[21]. - The company has resumed renovation and upgrade works at its hotels, complying with guidelines from the Guam National Historic Preservation Office[21]. - CP Saipan's renovation and upgrade project is expected to be completed by Q2 to Q3 2022, aiming to reposition the hotel to a high-end market[43]. - CP Guam's renovation and upgrade project will increase room supply from 318 to 321 rooms, with a planned reopening under the "Crowne Plaza Resort Guam" brand in Q2 to Q3 2022[46]. - The company entered into construction contracts for renovation projects at CP Guam and CP Saipan, part of the asset optimization plan, with expected completion in Q2 to Q3 2022[50][51]. Market Conditions and Recovery - As of the report date, vaccination rates in key markets such as South Korea and mainland China have reached over 85%[18]. - Vaccination rates in South Korea and mainland China exceeded 85%, while Japan's rate reached about 80%, facilitating the return of tourists to CNMI and Guam[31]. - The CNMI government launched the TRIP initiative to attract flights back to Saipan, establishing a travel bubble agreement with South Korea by the end of the year[32]. - The company anticipates an increase in Korean tourists due to the ongoing travel bubble agreement with South Korea, with seven airlines expressing interest in direct flights to Saipan[59]. - The management is optimistic about the recovery of the tourism industry, driven by higher vaccination rates and the adoption of "living with the virus" policies by various governments[58]. - The development of new COVID-19 therapies and the introduction of oral antiviral medications by pharmaceutical companies provide hope for recovery in the travel sector[22]. Financial Management and Capital Expenditure - The capital expenditure for the renovations of CP Guam, CP Saipan, and Kanoa Resort will be funded through a combination of proceeds from the IPO, internal resources, and external financing[62]. - The company secured $43 million in new bank financing to fund its asset optimization plan, with $17 million allocated for ongoing renovations and upgrades at CP Guam and CP Saipan[69]. - The capital expenditure for the asset optimization plan during the year was approximately $48.1 million[69]. - As of December 31, 2021, the total cash and bank deposits of the company amounted to approximately $8.1 million, a decrease of about $30.1 million compared to December 31, 2020, primarily due to capital expenditures for the asset optimization plan[69]. - The company has utilized $14,933,000 of the net proceeds by December 31, 2021, leaving an unutilized amount of $4,403,000[130]. - The estimated total capital expenditure and expenses as of December 31, 2023, is $101,178,000, with $29,555,000 allocated from the net proceeds of the listing[130]. Corporate Governance and Management - The company has established various communication channels to enhance transparency and maintain investor relations, including timely press releases and updates on its website[66]. - The company has a strong board of directors with members holding significant positions in various community organizations and businesses, enhancing its market presence[78][79][81][83]. - The board includes independent directors with extensive experience in finance and hospitality, ensuring robust governance and strategic oversight[84][86]. - The company is committed to enhancing its operational efficiency and exploring new business opportunities in the hospitality sector[82][86]. - The executive team is well-educated, with degrees from reputable institutions, contributing to the company's strategic direction and operational success[81][84][86]. - The company has been led by Dr. Henry Chan as Executive Director and CEO since November 2018, bringing over 40 years of experience in business operations across mainland China, Hong Kong, and the Pacific region[78]. - The company has established strong relationships within the community, which aids in its business development and market insights[78][79]. Employee Management - The total employee costs for the year amounted to $6.1 million, a decrease from $13.6 million in 2020, reflecting a reduction in workforce during the pandemic[75]. - The company had 196 full-time employees as of December 31, 2021, down from 206 in 2020, due to cost-saving measures during temporary closures[75]. - Employee management focuses on competitive compensation and effective performance evaluation systems to reward outstanding employees[108]. Related Party Transactions - The company reported related party transactions totaling $1,140,000 with CTSI Group for freight and logistics services, which is within the annual cap of $1,219,000[176]. - The company has a long-term cooperative model with Quanzhou Century Travel, which stabilizes sales and enhances hotel revenue, mitigating risks associated with seasonal declines in the Saipan leisure tourism market[179]. - The company’s related party transactions do not require independent shareholder approval under the Listing Rules, except for certain non-exempt continuing connected transactions[175]. - The company has established long-term relationships with TakeCare, Cosmos Guam, D&Q, and CTSI, which are expected to enhance operational efficiency and cost-effectiveness[181][185][188]. Shareholder Information - The group aims to create maximum returns for shareholders while ensuring sustainable profit growth and stable dividend returns[109]. - The top five customers accounted for 74.1% of the group's total revenue, with the largest customer contributing 73.5%[111]. - The company has distributable reserves amounting to $90,500,000 as of December 31, 2021[134]. - No interim dividend was declared for the year, consistent with the previous year[98]. - The company has not declared any final dividends for the year, maintaining the same stance as the previous year[98].
海天地悦旅(01832) - 2021 - 年度财报