The Singapore Exchange Securities Trading Limited, Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
CENTURION CORPORATION LIMITED
勝捷企業有限公司*
(Incorporated in the Republic of Singapore with limited liability)
(Co. Reg. No.: 198401088W)
(SGX Stock Code: OU8)
(SEHK Stock Code: 6090)
OVERSEAS REGULATORY ANNOUNCEMENT
AGM PRESENTATION
This overseas regulatory announcement is issued pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
Please refer to the following pages for the document which has been published by Centurion Corporation Limited on the website of the Singapore Exchange Securities Trading Limited on 27 April 2021.
By Order of the Board
Centurion Corporation Limited
Kong Chee Min
Chief Executive Officer
Hong Kong, 27 April 2021
As at the date of this announcement, the Board comprises Mr. Loh Kim Kang David, Mr. Wong Kok Hoe and Mr. Teo Peng Kwang as executive Directors; Mr. Han Seng Juan as non-executive Director; and Mr. Gn Hiang Meng, Mr. Chandra Mohan s/o Rethnam, Mr. Owi Kek Hean, Ms. Tan Poh Hong and Mr. Lee Wei Loon as independent non-executive Directors.
* For identification purpose only
Centurion Corporation Limited
(Incorporated in the Republic of Singapore with limited liability) (Co. Reg. No.: 198401088W)
AGM Presentation
27 April 2021
DISCLAIMER
This presentation should be read in conjunction with the Company's Annual Report 2020.
This presentation and the accompanying presentation materials (if any) ("Presentation") are made for informational purposes, without regard to the objectives, financial situation nor needs of any specific persons.
This Presentation does not constitute, or form any part of any offer for sale of or subscription of, or solicitation of any offer to buy or subscribe for, any securities nor shall it, or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.
This Presentation was prepared exclusively for the parties presently being invited for the purposes of discussion. Neither the Presentation nor any of its content may be distributed, reproduced or used without the prior written consent of Centurion Corporation Limited ("Centurion" or "Company"). The Company does not make any representation or warranty, express or implied, as to the accuracy of the information contained herein, and expressly disclaim any and all liability based, in whole or in part, on such information, errors therein or omissions therefrom.
This Presentation includes forward-looking statements provided with respect to the anticipated future performance of the Company. Such forward-looking statements reflect various assumptions of the management concerning the future performance of the Company. Accordingly, there can be no assurance that such projections and forward-looking statements will be realised. The actual results may vary from the anticipated results and such variation may be material. No representations or warranties are made as to the accuracy or reasonableness of such assumptions or the forward-looking statements based thereon.
Centurion Corporation Limited | 2 |
CONTENTS
01 | Business Overview |
02 | Key Financial Review |
03 | Key Business Review |
04 | Looking Ahead |
Centurion Corporation Limited | 3 |
Key Business Highlights
Secured JTC tender to operate 4 Quick Build Dormitories
- Lease from JTC and operate c.6,400 beds in 4 new QBDs for 3+1 years
- As at 31 Dec 2020, Westlite Kranji Way and Westlite Tuas Avenue 2 have started operations and are ramping up occupancy
- The other 2 QBDs are expected to commence by 2Q 2021
Secured master lease of Westlite - PKNS Petaling Jaya
-
Lease from Perbadanan Kemajuan Negeri Selangor
("PKNS"), also known as Selangor State Development
Corporation, and operate a c.6,044-bed asset in Petaling Jaya, Selangor for 21+9 years - The asset started operations in Dec 2020 and is ramping up its occupancy
Centurion Corporation Limited | 4 |
Our Response to COVID-19
The well-being of our worker and student residents is our highest priority, and we are doing our utmost to provide a safe and secure living environment for our residents and ensure their physical and mental well-being during this COVID-19 outbreak
Protecting our residents
- Activated Pandemic Management Plan (PMP) in mid-Jan 2020
- Implemented and progressively scaled up precautionary measures across all our accommodations
- Established systems, processes and facilities to mitigate the potential risks as we safeguard our accommodation community against the COVID-19
- Supported by our Global Security Operations Centre (GSOC), our Pandemic Task Force monitors all our assets, updating on situational developments and operational needs
Communicating with all
stakeholders
- Westlite, our workers dormitory management platform, has been updating our wider stakeholders, including client-employers, residents and the media, on the operational situation in our dormitories and the measures taken
- dwell Student Living, our student accommodation operator, has been updating our residents, their parents/guardians, the universities and student agent partners on the measures in place
- Working closely with relevant authorities and stakeholders to manage the risk within our assets and to public health
Staying vigilant, balancing health, safety and well-being
- Resi-livingactivities conducted online, with increased focus on mental wellbeing and support
- Gradual re-opening of communal amenities and resumption of community activities, with stringent Safe Living Measures
- Continued vigilant focus on Infection Prevention Controls and Safe Movement Management, for staff and residents
- As the vaccination rollouts progress in various countries, we continue to monitor closely and will respond to the situation appropriately
Centurion Corporation Limited | 5 |
FY 2020 Key Performance Highlights
Revenue
S$128.4m
4% from S$133.4m in FY 2019
- Lower revenue from PBSA and PBWA due to occupancies impacted by COVID-19
- Partly offset by:-
- Full year contribution from new properties that came into operations in 2019
- Revenue from management contracts and newly-leased assets in workers accommodation, in FY 2020
NPAT
S$18.7m
82% from S$103.8m in FY 2019
- Net fair value loss on investment properties as opposed to a substantial gain last financial year
- Higher operating costs and debt delinquencies
- Partly offset primarily by:
- Net grant income received from government Covid-19 support packages
- Lower interest rates environment o Gain on disposal of a subsidiary
- Excluding fair valuation adjustments, Net Profit (Equity holders) from Core Business grew 8% to S$41.3m
Centurion Corporation Limited | 6 |
Accommodation Growth Profile
No. of beds
90,000
80,000
70,000
60,000
50,000
40,000
Accommodation Portfolio - Bed Capacity
Portfolio capacity expanded by 13% in | ||||
bedcount in 2020, by prudent asset-light means, | ||||
despite challenges from COVID-19 | 6,064 | 6,064 | ||
6,396 | ||||
3,208 | 5,348 | 6,433 |
5,608
2,672
2,362
74,712 74,712
67,064
30,000 | 60,000 | 58,400 | 58,700 | |||||||||
47,400 | 49,800 | |||||||||||
20,000 | 38,000 | |||||||||||
33,200 | ||||||||||||
10,000 | 24,800 | |||||||||||
5,300 | ||||||||||||
0 | ||||||||||||
20201 | 2021F2 | |||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2022F |
PBWA PBSA
Note:
- Includes 2 QBDs which started operations as at 31 Dec 2020
- Includes Tampoi II's c.3,600 beds under development, all 4 QBDs, and excludes dwell Selegie
Centurion Corporation Limited | 7 |
Diversified Business Portfolio across Geography and Asset Type
United States
2,145 beds
S$1.86b
Assets Under Management
~73,460
operational beds as at 31 Dec 2020
35
operational properties
17 cities in 6 countries
United Kingdom
2,815 beds
South Korea
208 beds
Malaysia | ||
c.36,744 beds | Singapore | |
c.28,000 beds | ||
c.3,600 beds ^ | ||
332 beds
c.6,400 beds *
Australia
896 beds
Legend:
PBWA
PBSA
Under Development
Quick Built Dorms (QBDs)
Centurion Corporation Limited
^ c. 3,600 beds under Tampoi II development
* c. 6,400 beds for 4 QBDs - c. 1,300 beds Westlite Kranji Way commenced in Sep 2020, c. 1,020 beds Westlite Tuas Avenue 2 commenced in Nov 2020, remaining 2 QBDs are expected to commence by 2Q 2021
8
Key Financial
Review
Financial Overview
S$'000 | 12M 2020 | 12M 2019 | Change % |
Revenue | 128,355 | 133,353 | -4% |
Gross Profit | 89,599 | 96,936 | -8% |
Gross profit margin | 70% | 73% | -3pp |
Net Profit | 18,711 | 103,788 | -82% |
Net Profit from core business | 47,306 | 43,582 | 9% |
Net Profit Margin | 37% | 33% | 4pp |
Net Profit (Equity holders)1 | 41,320 | 38,232 | 8% |
- Revenue declined 4% to S$128.4 million in 12M 2020 mainly due to:-
- lower occupancies caused by COVID-19, particularly in UK and AU PBSA
- full year contribution from properties added in 2019 (Westlite Bukit Minyak, Westlite Juniper and dwell Archer House)
- benefited from PBWA portfolio expansions in FY2020
- management contract for three (3) FCDs, and master lease to operate four (4) Quick-Build-Dormitories in SG
- Net fair valuation loss of S$27.6 million in FY2020 as compared to net fair valuation gain of S$66.3 million in FY2019
- a reflection of the market condition impacted by COVID-19 pandemic
- absence of a one off valuation gain in FY2019
- Excluding fair valuation adjustments, Net Profit (Equity holders) increased 8% to S$41.3 million for FY2020 mainly due to:-
- Including COVID-19 reliefs, net grant income of S$4.1 million received from various governments where Group operates
- Lower interest rate environment led to reduced finance expenses of S$5.4 million
- Savings in administrative and distribution expenses of S$2.6 million due to cost saving measures Offsetting higher costs due to COVID-19
- Safe living measures implemented costing S$2.3 million and increased debt delinquencies of S$1.1 million
- Impairment of plant and equipment of S$0.5 million due to non-extension of the lease of dwell Selegie in Singapore
Centurion Corporation Limited | 10 |
Business Portfolio by Asset Type and across Geographies
Good diversification at asset class, country and asset levels
PBWA | PBSA |
67,064 | 6,396 |
91% | 9% |
Malaysia 36,744
55%
Malaysia
12%
Singapore
30,320
45%
PBWA $91.5m 72%
#
Beds as at
31 Dec 2020
US
2,145
34%
S. Korea
208
3%
PBSA $35.8m
28%
Revenue for
FY 2020US 4%
- Korea 1%
Singapore
332
5%
Australia
896
14%
UK
2,815
44%
Singapore
8%
Australia 24%
Singapore | UK |
88% | |
63% | |
Centurion Corporation Limited | 11 |
Segment Breakdown
Accommodation Business Results in 12M 2020
Accommodation | Optical Disc | ||||||||||
S$'000 | Workers | Student | |||||||||
12M 2020 | 12M 2019 | Change | 12M 2020 | 12M 2019 | Change | 12M 2020 | 12M 2019 | Change | |||
Revenue | 91,537 | 86,114 | 6% | 35,768 | 45,800 | -22% | 1,050 | 1,439 | -27% | ||
Segment Profit | 55,582 | 52,230 | 6% | 14,469 | 19,042 | -24% | (342) | 296 | N/M | ||
Segment Margin | 61% | 61% | 0pp | 40% | 42% | -2pp | -33% | 21% | N/M |
Centurion Corporation Limited | 12 |
Balance Sheet Highlights
S$'000 | 31 Dec 2020 | 31 Dec 2019 | Change % |
Cash & Bank Balances | 83,868 | 48,588 | 73% |
Current Assets | 108,998 | 78,052 | 40% |
Non Current Assets | 1,432,714 | 1,400,915 | 2% |
Total Assets | 1,541,712 | 1,478,967 | 4% |
Current Liabilities | 129,098 | 110,106 | 17% |
Non Current Liabilities | 783,829 | 754,996 | 4% |
Total Liabilities | 912,927 | 865,102 | 6% |
Net Assets | 628,785 | 613,865 | 2% |
Net Gearing Ratio1 | 48% | 51% | 3pp |
- Healthy Balance Sheet - S$83.9m in cash and bank balances
- Cash and bank balances - increase mainly due to loan moratorium, net cash generated from operating activities, and proceeds from disposal of investment in a subsidiary, assets held for sale and financial assets at FVOCI
- Current Assets - increase mainly due to the increase in cash and bank balances
- Current Liabilities - increase due to recognition of lease liabilities from new leases obtained from Westlite-PKNS Petaling Jaya and JTC QBDs and increase in borrowings due within 1 year. The Group has sufficient cash resources and banking facilities available in total of approximately S$197m to meet its current liabilities
- Non Current Liabilities - increase due to recognition of lease liabilities from new leases obtained and increase in derivative financial instruments from fair value loss of interest rate swap
- Average long term bank debt maturity profile of 7 years
- Interest cover is well within interest cover threshold
- 3.5 times (4.8 times excluding MTN interest, interest on lease liability and bank facility fees)
Note:
1. The net gearing ratio is computed as borrowings less cash and bank balances divided by total capital. Total capital is calculated as borrowings plus net assets of the Group.
Centurion Corporation Limited | 13 |
Key Ratios
S$'000 | 31 Dec 2020 | 31 Dec 2019 |
Earnings Per Share1 | 4.9¢ | 4.6¢ |
NAV Per Share | 72.0¢ | 70.4¢ |
Share Price | 35.0¢2 | 44.5¢3 |
Dividend* | - | 2.0¢ |
Dividend Yield | - | 4.5% |
Note:
- Excluding one-off items
- As at 31 December 2020
- As at 31 December 2019
-
In view of the uncertainty amidst the COVID-19 pandemic and continued challenges ahead, the Board is not recommending a dividend payment for FY 2020. Further, the Directors of the Company and senior management staff of the Group have agreed that the Fee and Salary
Reduction from FY 2020 will continue into FY 2021 as part of the Company's measures to strengthen cash flow management and controls to conserve cash.
Centurion Corporation Limited | 14 |
Business
Review
15
Purpose Built Workers
Accommodation
Workers Accommodation Landscape - SG
Expected new supply of PBWA beds due to COVID-19^
Demand
c. 352k
Work Permit Holders from Construction, Marine Shipyard, Process sectors who require approved dormitory beds
Workers from construction sector | Workers from marine, oil & gas, petrochemical processing sectors | |
c. 208k | Subject to impact from | c. 146k | |||
de-densification efforts due to COVID-19 | |||||
Supply | Purpose Built Workers Accommodation | Non Purpose Built Workers Accommodation | |||
c. 111k | c. 97k | c. 100k | c. 20k | c. 26k | |
Long term PBWA | Short term PBWA | Factory Converted Dorm | On-site Dorm | Others | |
New Supply
Short- to Medium-Term Arrangements
c. 60k beds
c. 25,000 | c. 25,000 | c. 10,000 | ||
New Quick Build | Temporary fitting | Additional Construction | ||
Dormitories (QBDs) | out of currently | Temporary Quarters | ||
by 2H 2021 | unused state | (CTQs) | ||
properties | ||||
Longer Term Arrangements
up to c. 100k beds
will be created by the Government
to replace short to medium term housing
New purpose build dormitories (PBDs) over next 2-3 years
Source: Singapore Ministry of Manpower (as at Jun 2020), Channel News Asia, The Straits Times, Centurion research ^ JointMND-MOMMedia Release on New Dormitories with Improved Standards for Migrant Workers - 1 June 2020
Centurion Corporation Limited | 17 |
Workers Accommodation
Singapore - 9 properties (incl 2 Quick Build Dormitories under development)
- Secured 2 contracts from JTC Corporation in 2020
- management services contract for 3 FCDs of c. 4,000 beds
- master lease to operate 4 QBDs of c. 6,400 beds; 2 sites commenced operations as at 31 Dec 2020
- Post lifting of dormitory lockdown in Aug 2020, PBWA demand softened
- employers sought alternative options in interim accommodation eg QBDs, TLQs, CTQs, private housing
- number of migrant workers have also returned to their hometown1
- Migrant worker population expected to increase gradually in 2021
- Government allows returning/new workers to arrive under strict quarantine and clearance regimes
- more workers expected to be brought in with gradual recovery of economy
- Supply of interim accommodation solutions will reduce
- some alternative accommodation solutions eg TLQs expected to be discontinued by 1H 2021
- other accommodation solutions such as QBDs being repurposed for Migrant Workers Onboarding Centre
- PBWAs continue to be the preferred option for housing workers in the long term
- actively engaged in dialogues with authorities on future specifications, related requirements for existing PBWAs and government support
- continue exploring opportunities for development and management of new PBWA assets addressing pandemic management needs
Note: FCDs - Factory Converted Dormitories; QBDs - Quick Build Dormitories; TLQs - Temporary Living Quarters; CTQs - Construction Temporary Quarters
1The Straits Times - Singapore sees its population fall for first time in 10 years - Retrenchments have hit foreign workers especially, causing many to leave as a result, 25 September 2020
Centurion Corporation Limited | 18 |
Workers Accommodation
Malaysia - 8 properties
- Implementation of various rounds of Movement Control Orders ("MCOs") across different states have not affected financial occupancies of assets
- Secured Westlite-PKNS Petaling Jaya (c. 6,044 beds) on master lease of 21+9 years from Selangor State Development Corporation (PKNS) in December 2020
- Resumed development of 3 additional blocks on existing piece of land at Tampoi, Johor
- expected completion in 2Q 2021 and add c. 3,600 beds to existing Westlite Tampoi
- Government stepped up enforcement for employers to comply with Amendment to the Workers' Minimum Standards of Housing and Amenities Act1
- including gazetting an emergency ordinance to curb spread of COVID-19
- compelling employers to provide lodging with sufficient living space and amenities for workers
- deadline for employers to comply extended to Dec 2021
- Westlite Malaysia is able to meet requirements of new legislation
- working with the Department of Labour Peninsular Malaysia ("JTKSM") towards certification of assets in compliance with standards of the Act2
- Today Online - Malaysia enforces requirement for improved worker accommodation to rein in Covid-19, 18 February 2021
- Selangor Journal - Ministry tells employers to apply for certificate of accommodation, 24 December 2020
Centurion Corporation Limited | 19 |
Workers Accommodation
Diversified, stable customer base
- more than 1,359 customers in Singapore and Malaysia
- serves companies from diverse industries
- ability to cater to multiple industries insulate the Group
- less affected by economic fluctuations or government policies affecting any one industry
Segmentation by Industry | |||||
S/N. | Industry Percentage | (%) | |||
Engineering | Commercial | ||||
3% | |||||
4% | |||||
1 | Construction | 45 | Service | ||
4% | |||||
2 | Oil & Gas | 25 | |||
Marine | |||||
3 | Manufacturing | 12 | 7% | ||
4 | Marine | 7 | Manufacturing | ||
5 | Service | 4 | 12% | ||
Construction | |||||
6 | Engineering | 4 | 45% | ||
7 | Commercial | 3 | |||
Total | 100 | Oil & Gas | |||
25% | |||||
- Breakdown of workers revenue by industry for Singapore and Malaysia only * As at 31 December 2020
Centurion Corporation Limited | 20 |
Purpose Built Student
Accommodation
Student Accommodation
UK - 10 properties
- Occupancy has been impacted by COVID 19 pandemic
- lockdowns in Academic Year (AY) 19/20, subsequent 2nd lockdown from Dec 2020 to Mar 2021
- universities shifted to mainly online teaching, with selective curricula conducted on-campus
- international student arrivals restricted; domestic students unable to return to university cities
- early termination option offered to dwell residents for remaining leases in last semester of AY 19/20
- The UK maintains its standing as one of the top tertiary education markets in the world
- Higher Education Statistics Agency reported 3% y-o-y rise in number of higher education students to 2.5 million in 2019/201
- In Feb 2021, UK Government reaffirmed its aims to recruit 600,000 international higher education students annually and increase education exports to £35 billion a year by 20302
- 22% of total student population, or over 538,000 were from overseas in 2019/20
- In Apr 2021, UK Government announced3 that all university students yet to return to in-person teaching will be able to do so from 17 May at the earliest
- aligning with government's roadmap to ease restrictions on social contact and indoor mixing
- Occupancy expected to recover when the pandemic conditions stabilize
- pent-updemand from both international and domestic students
- students desire on-campus study experience, and universities need to resume full academic programmes
- Disposed 37-bed dwell Beechwood House in Dec 2020
- HESA - Higher Education Student Statistics: UK, 2019/20 - Student numbers and characteristics, 27 January 2021
- UK Parliament House of Commons Library - International and EU students in higher education in the UK FAQs, 15 February 2021
- Gov.uk - Remaining university students to return to campus from Step 3 of the roadmap, no earlier than 17 May, 13 April 2021
Centurion Corporation Limited | 22 |
Student Accommodation
Australia - 2 properties
- COVID-19disrupted demand for accommodation
- international students faced difficulties entering country
- federal government prioritised repatriation of citizens and residents stranded overseas
- interstate travel restrictions within Australia contributed to the fall in occupancies
- deeper impact in Melbourne than in Adelaide
- Demand for student accommodation remains bright
- population aged 19 and younger will form around 35% of Australian population in next decade1
- universities continue to attract students from international source markets
- PBSAs market remains under-supplied, at 6% of total student population1
1nuveen - Australia: The enduring merit of education, 20 November 2020
Singapore - 1 property
- International student arrivals sharply reduced by COVID-19 restrictions
- while financial occupancy was stable for 1H 2020, few new bookings secured to replace expiring leases
-
bed capacity reduced as part of COVID-19 management measures directed by landowner
SLA
- Will not extend dwell Selegie's lease for final phase of 3+3+2 year tenure
- current lease expires in June 2021
South Korea - 1 property
- Occupancy of dwell Dongdaemun impacted as COVID-19 affected overseas student exchange or language programmes
- marketing efforts refocused to include local professionals
Centurion Corporation Limited | 23 |
Student Accommodation
US - 6 properties
- COVID-19pandemic has not materially impacted US portfolio occupancy
- number of new international students physically present in the US estimated to have declined 72% in 20201
- international students form less than 2% of US portfolio occupancy
- Group's assets cater mainly to domestic students
- US portfolio able to achieve improvement in occupancy as no interstate or inter-city travel restrictions
- Performance of portfolio expected to continue improving with increased and active management
1World Education Services - The Pandemic Drives Unprecedented Decline in International Students, 24 November 2020
Centurion Corporation Limited | 24 |
Looking Ahead
25
Looking Ahead
Group's PBWA and PBSA businesses have been disrupted by COVID-19
- occupancies impacted; debt delinquencies may increase
- slow recovery in occupancies expected with vaccine rollouts but uncertainties remain
Challenges across all markets
- travel bans and movement restrictions
- stoppage of work and university on- campus programmes
- operational costs increase with safe living measures
Despite uncertainties, the Group continues to build on resilient position in its markets
- in dialogues with authorities regarding future specifications for permanent PBWAs, and the related requirements for existing PBWAs in SG
- working with JTKSM towards certification of its MY assets in compliance to standards of the Workers' Minimum Standards of Housing and Amenities Act
- offered student residents early termination, deferments or flexible lease terms across different country markets to support students
- step up efforts to attract bookings including short term lets and tapping growing domestic demand
Centurion Corporation Limited | 26 |
Looking Ahead
Management measures and continued growth
- In this extraordinary year, the Group has focused on mitigating impact of disruptions due to COVID-19 by:
- enhancing management and operational efficiencies
- managing costs and conserving cash
- Continued to enhance and grow our assets
- rationalized our portfolio and selectively enhance performing assets
- taken opportunities, where sensible, to grow Assets Under Management and revenue streams
Resilient portfolio and gradual recovery
- Portfolio of 35 quality operational assets is well diversified
- across 2 established and complementary specialised accommodation segments
- across 6 strategic countries including Singapore, Malaysia, and the global education hubs of the UK, US, and Australia
- Confident in the resilience of dual business segments
- demand remains robust across PBWA and PBSA segments
- as business and travel activities resume, along with continued rollout of several approved vaccines globally, occupancy levels in these strategically-located assets expected to improve
Centurion Corporation Limited | 27 |
Thank You
For any enquiries, please contact: Investor Relations Manager Mr George Goh
george.goh@centurioncorp.com.sg Tel: +65 6745 3288
- www.centurioncorp.com.sgCenturion Corporation Limited
(Incorporated in the Republic of Singapore with limited liability)
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Centurion Corporation Limited published this content on 27 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2021 23:24:07 UTC.