SINGAPORE (May 21): Tourist attractions operator Straco Corporation has reported a loss of $3.4 million for 1QFY20, a reversal from earnings of $8.5 million recorded in the year earlier. Revenue in the same period collapsed by 86.2% y-o-y to $3.4 million.
The company was hit on all fronts. Its attraction in Singapore, the Singapore Flyer, has stopped operating since November last year because of a technical issue. Its few other attractions in China, such as the Shanghai Ocean Aquarium, were then hit when the Covid-19 outbreak happened.
Straco warns that the outbreak continues to hurt the tourism industry in the short to medium term. “Precautionary measures such as safe distancing, operating with reduced daily capacity and travel restrictions will have an adverse impact on revenue,” the company said.
With limited visibility on when meaningful recovery might take place, Straco is guiding for a material operating loss and negative operating cash-flow for 1HFY2020.
“Like all operators in the tourism industry, we will be remodeling our processes and right sizing our operating resources to cater to the reduced demand,” the company added.
For example, Straco has implemented pay cuts of up 50% for senior management, with effect from April 1. It has also been granted deferment of the monthly loan principal repayment by DBS on the Singapore Flyer starting April till the end of the year.
The company’s cash balance remains healthy at $169.2 million as at March 31 2020.
Straco shares closed May 21 at 50 cents. Year to date, it has dropped 26.5%.
