Chairman and CEO Message
The year ended 31 December 2018 ("FY2018") was an eventful year for the Group with several new developments.
In February 2018, the Group announced that its wholly-owned subsidiary had entered into a conditional share sale and purchase agreement ("SPA") to acquire a majority stake in a Thai Company, which will be involved in developing and operating a proprietary yacht club in Makham Bay, Phuket, Thailand. The parties are working towards having the conditions provided in the SPA fulfilled as soon as possible.
In August 2018, the Group secured its second management contract in Indonesia for an integrated marina at Nirup Island, which is located within close proximity of Singapore (8 nautical miles) and Batam. The 10-year contract was awarded by PT Tritunas Sinar Benua, an Indonesian company based in Batam. SUTL Enterprise will be consulting on the project, which is expected to be completed by 2021. Upon completion, the Group will manage the marina and its clubhouse under the name ONE°15 Marina Nirup Island, Indonesia.
This year ended on a particularly high note when just before Christmas, we received the wonderful news that we could proceed with membership sales for ONE°15 Marina Puteri Harbour. This was an important milestone for our Group as the approval from the Companies Commission of Malaysia, or Suruhanjaya Syarikat Malaysia, meant that we could begin selling memberships as the new marina is being constructed.
Since then, we have broken ground at the location in Puteri Harbour, Iskandar Puteri, Johor, Malaysia on 14 March 2019. The event was graced by His Majesty, Sultan Ibrahim Ibni Almarhum Sultan Iskandar, Sultan and Sovereign Ruler of State and Territory of Johor Darul Ta'zim, which attests to the importance of this project not only to the Group but also to the state of Johor.
Upon the completion of ONE°15 Marina Puteri Harbour Malaysia, ONE°15 will be the largest marina brand in Malaysia. The upcoming marina will comprise an integrated clubhouse and three marinas at Puteri Harbour, which will be located on 1.2 acres of land and accommodate up to 440 berths including 148 berths at the public marina serving boats up to 40m in length; 278 berths at the private marina for members of ONE°15 Marina Puteri Harbour Malaysia; and, a mega-yacht marina for 14 vessels with a fuel pontoon.
Together with our joint venture partner UEM Land Berhad (a wholly owned subsidiary of UEM Sunrise Berhad), we envisage that the marina will transform and ignite new interest in the Iskandar Puteri precinct and draw more visitors to the southern state of Johor by putting it on the map of the international yachting community. We are targeting to launch our sales gallery near the site of the marina to begin our membership drive in the second quarter of 2019 and we are very encouraged that we have received keen interest from both boaters and non-boaters.
In FY2018, the Group achieved total net attributable profit of S$5.8 million on the back of S$34.8 million in total income. Our bottomline was 14% lower year-on-year mainly because of higher overall expenses in relation to increased advertising, publication and event spending in relation to the hosting of the Singapore Yacht Show 2018 at the ONE°15 Marina Sentosa Cove; increased manpower expenses in preparation for the upcoming membership sales drive for the ONE°15 Marina Puteri Harbour, Malaysia; and, increased other expenses due to higher professional fees and business development costs in relation to new marina projects.
We believe the higher expenses were in line with the Group's efforts to raise its industry profile as well as to ramp up for future growth.
Most importantly, SUTL Enterprise is debt free and remains on strong financial footing to execute its future plans with cash and cash equivalents amounting to S$45.4 million as at 31 December 2018.
As a reflection of the Board and management's confidence in the Group's growth prospects, a dividend of 2.0 Singapore cents per ordinary share has been proposed for FY2018. This represents 30% of net attributable profit for the financial year. This will be subject to shareholders' approval at our upcoming Annual General Meeting.
Prospects and Strategy
Looking ahead, we are cautiously optimistic about the future of the Group given the quality of the marinas in our growing network. We have great aspiration and we are fiercely protective of our proprietary ONE°15 brand, which celebrates a life less ordinary!
The Group believes the region's rising affluence and increasing consumption of lifestyle products and services provide a favourable backdrop for the development of integrated marinas and offer ample opportunities for growth.
We are on track to build a global brand and network, one marina at a time. Besides the upcoming ONE°15 Marina Puteri Harbour Malaysia, and our flagship ONE°15 Marina Sentosa Cove Singapore, we also manage the ONE°15 Brooklyn in New York, USA, and the Indonesia Navy Club by ONE°15 in Jakarta, Indonesia. We have a robust pipeline that comprises ONE°15 Marina Taihu China, ONE°15 Marina Makham Bay Thailand, ONE°15 Marina Nirup Island Indonesia and ONE°15 Marina Logan Cove Zhongshan China.
We are expanding our operations gradually and we want to thank all stakeholders, including our shareholders and business partners for their patience and unwavering support over the years.
We would also like to thank the management and staff of SUTL Enterprise for their contributions to help the Group move closer to our corporate vision. In closing, we also want to express our appreciation to our fellow Directors on the Board for their guidance and counsel on the governance and strategic matters of the Group.
Lew Syn Pau
Executive Director and Chief Executive Officer