Chairman and CEO Message
SUTL Enterprise wrapped up the year ended 31 December 2017 ("FY2017") with a 8% year-on-year increase in net attributable profit to S$4.1 million despite a slight 3% dip in revenue to S$27.3 million.
It was a busy year for the Group as we ramped up our efforts to expand our ONE°15 network of integrated marinas in the region by casting more anchors in great destinations. Notably, we gained a stronger foothold and greater influence in China and Indonesia through some exciting developments during the year.
In September 2017, SUTL Enterprise inked an MOU with the Hainan Cruise & Yacht Association for the exchange of information between the two parties. The Group will lend its expertise and experience to assist in the development and expansion of Hainan Island's yachting, cruising and maritime industry, while at the same time we expect to benefit from the partnership by way of being able to showcase our expertise, which we believe will open doors to more opportunities in China.
In October 2017, SUTL Enterprise secured a 10-year contract for an integrated marina project at Sanshan Island in Taihu Lake, Suzhou, which will bear the iconic ONE°15 brand. The Group will be involved in the conceptualization, design and specifications and pre-opening management of the marina. Post-opening, the Group will manage the day-to-day operations of the marina, the facilities at the marina, as well as club membership sale and related matters.
Just recently in February 2018, we announced that one of our 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. When completed, it will bear the ONE°15 brand and feature a 171-berth marina, which can accommodate superyachts up to 200 feet and 25 hard-stand spaces with 80 dry-stack storage. The parties are currently working towards having the conditions provided in the SPA fulfilled as soon as possible.
The aforementioned developments in FY2017 and early this year have enhanced the robustness of our existing pipeline, which included management contracts secured in FY2016 such as the Indonesian Navy Club managed by ONE°15 and ONE°15 Marina Guishan in Zhuhai, China, further strengthening our foothold in these markets.
Elsewhere, the Group is also currently managing the ONE°15 Brooklyn in New York, USA. Locally in Singapore, we own and manage the ONE°15 Marina Sentosa Cove. Meanwhile our project with our joint venture partner for a superyacht marina, a members-only marina and a public marina in Puteri Harbour, in the Iskandar region of Johor, Malaysia, is underway.
To thank shareholders for your patience and confidence in the Group, the Board of Directors has proposed a final cash dividend of 2.0 Singapore cents per ordinary share representing 41.7% of net attributable profit achieved in FY2017. 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 are fiercely protective of our proprietary ONE°15 brand and we are careful when selecting marinas that will bear our brand. We believe that those in our pipeline will begin to bear fruit when they are completed and become operational and revenue generative.
We remain positive about the prospects of our industry. Rising affluence in the region has led to growing demand for the yachting lifestyle and waterfront living and we believe that more marina infrastructure will be developed along coastal cities as governments acknowledge the positive net economic impact the yachting industry brings to the country. All these will provide support for the industry's growth, which bodes well for our business.
According to an industry report titled "Increasing popularity of yachting as a luxury sport and leisure activity to spur demand for yachting" published in September 2016 by Global Industry Analysts, the global yachting industry is projected to reach US$74 billion by 2022 driven by rising interest in luxury cruising among High Net Worth Individuals in Asia-Pacific and the Middle East. In fact, China is forecasted to register the fastest compound annual growth rate of 8.1% between 2015 and 2022, driven by growing number of wealthy individuals and rising interest in yachting.
The Group's vision is to make our ONE°15 brand synonymous with world class integrated marinas and lifestyle clubs. We have adopted a two-prong growth strategy for the years ahead. For mature markets, we will identify Tier 1 tourist destinations or capital cities with established marinas for potential acquisition and investment. For emerging markets, our approach is to provide consultancy and management services for marina projects being developed by third parties. We believe that this strategy will enable us to increase recognition and visibility for our ONE°15 brand.
We are actively exploring new opportunities and we hope to make the necessary announcements in due course.
In closing, we would like to show our appreciation to various groups who have contributed to our healthy performance in FY2017.
We would like to thank all shareholders and business partners for your unwavering support.
We would also like to thank the management and staff of SUTL Enterprise for your dedication and hard work over the past year that has enabled the Group to achieve optimum operational efficiency.
Lastly, we want to thank our fellow Directors on the Board for your careful stewardship of the Group.
Lew Syn Pau
Executive Director and Chief Executive Officer