SINGAPORE (Feb 28): GSH Corp, the property developer and owner of Sutera Harbour Resort in Kota Kinabalu, swung into losses of $3.3 million in the 4Q16 after revenue fell 69.8% to $17.7 million from a year ago.
For the three months to Dec, GSH’s property business contributed $1.7 million in revenue compared to $45.4 million a year ago.
Following the first phase of the sales launch of GSH Plaza in FY15, the group’s strategy is to launch the second phase of sales and leasing at GSH Plaza once the building obtains temporary occupation permit (TOP) in 1Q17.
GSH’s hospitality business grew by 22% to $15.9 million from $13.0 million due mainly to the increase in room occupancy rates at its two hotels in Sutera Harbour Resort in Kota Kinabalu, Sabah.
Higher administrative expenses of $6.5 million were incurred in 4Q16, compared to $3.1 million in 4Q15, due mainly to the implementation of a new wage structure as required by the Malaysian authorities for all hotels.
Due to the fall of rental rates in Dubai, the valuation of the group’s investment property in Dubai was reduced by $2.0 million.
For FY16, GSH reported a loss of $3.6 million from earnings of $16.4 million a year ago. Revenue fell 46.2% to $87.2 million.
Looking ahead, GSH says slower economic and rising interest rates may continue to weigh on the market. However, with the influx of Chinese investment in Malaysia in the medium to long term, the country’s property outlook looks positive.
For the hospitality industry, GSH continues to stay positive on the hospitality industry given the Sabah state government’s commitments and initiatives for developing tourism.
Shares of GSH closed at 58 cents.
