SINGAPORE (Jan 30): IPC Corporation, the property investment and development, hotel management and investment holding company, reported after-tax profit amounting to nearly $25 million, reversing from losses of $4.8 million for FY17.
This was driven mainly by higher fair value gain on financial assets of nearly $30 million due to its ownership of preference shares in Nest Hotel Japan Corporation (NHJC). A company incorporated in Japan, NHJC is primarily engaged in the business of hotel management, operations and investment, The group operates and manages 12 hotels in Japan under the “Nest”, “Tissage” and “Bespoke” brands.
Following IPC’s divestment of nine hotels in Japan in 2015 and a cash distribution of $1.60 per share to shareholders in 2016, the group has transformed its business model into an asset-light hotel management business.
Revenue and cost of sales more than doubled to $9.02 million due to the sale of the entire 24% interest in the land held for development, Ju Ren Da Sha.
Gross profit decreased 15.9% to $0.678 million mainly due to the decrease in the sales revenue of Grand nest Hotel, Zhuhai, China, due to the weakening yuan and inclement weather which caused some cancellations of conferences reservations.
Other income dipped 4.3% to $0.6 million while expenses widened 14.9% to $6.14 million.
As part of IPC’s strategy to expand its hospitality business to other countries, IPC has on Nov 12 2018 entered into a joint venture agreement with NHJC and AP ASEAN Holding to conduct the business of hospitality and asset management in the Asia Pacific Region (excluding Japan). The joint venture is expected to be incorporated in FY2019.
Shares in IPC closed 0.5 cent higher at 30 cents on Wednesday.
