Straco Corporation Limited

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Extracted from the Annual Report 2020

WEATHERING THE PERFECT STORM

In January last year, the Group faced an unprecedented moment where for the first time since inception, its business operations went into hiatus due to precautionary regulatory measures implemented by the local authorities. To say that the Covid-19 global pandemic engulfed all in its path is an understatement. Medical protocols and health advisories were, and remain the order of the day, and the crisis was contained and managed with varying degrees of success across jurisdictions. There has been a heightened vigilance in the approach. For a disease that is airborne and often asymptomatic, the reliance on protective gear, safe distancing and observing good personal hygiene were deemed as key measures to observe. Despite the consensus among medical experts that the COVID-19 pandemic will come to pass, the recovery is expected to occur over an extended period of global restrictions on movement and travel, which to date have decimated tourist traffic and revenues in the global tourism industry.

The Group has faced business disruptions during the SARs episode in 2003 and this has helped to build in crisis preparedness from the early days of our business operations. Our subsidiaries had business continuity plans in place at the onset, and embarked on a series of measures, including protecting key assets; cost cuttings; right sizing operations, and deferring non-essential expenditures. Under the guidance of the Board and senior management, businesses resumed operations upon approval of the authorities, while ensuring utmost safety of staff and customers.

Operating parameters, including capacity cuts and visits by appointment required changes to our operating processes. The digital transformation is prevalent (such as the full transition to online ticketing in China) and the adoption has been smooth.

Amidst the disruptions experienced throughout the year with temporary closures, the group managed to generate sufficient revenue to maintain positive cash inflow at the operating level.

For the year under review, the Group generated a revenue of S$29.56 million and registered a net loss of S$0.98 million, attributed primarily to a non cash impairment loss of S$2.6 million recognised on its investment property while registering a positive net operating cash inflow of S$0.5 million.

With a net cash holding of S$154.77 million as at 31 December 2020, we remain resilient in face of the current ongoing health crisis, and will be well placed to seize business opportunities and participate in any viable collaborations in the future.

Despite the net losses incurred by the Group amidst an adverse and challenging operating environment, we propose a first and final dividend of 1.0 cent per share, taking cognizance of the Group's healthy financial position. This proposed payment represents our appreciation of the support shown by shareholders and is a show of solidarity with all our stakeholders.

KEEPING THE DREAM ALIVE

It has been most heartening to see the joy of the many families while visiting our attractions and the positivity arising from the experience. It serves as a good reminder of our main mission to provide unique and memorable experiences for all our customers, and restores some hope despite the impact of temporary closures. To this end, we have continued to enhance our exhibits, with additions of new offerings such as the new Time Capsule attraction at the Singapore Flyer, as well as the revamped, multimedia Sperm Whale exhibit at Underwater World Xiamen.

OUTLOOK ON TOURISM

The inoculation exercise now ongoing globally will provide some respite in the current fight to contain the Covid-19 pandemic. However, as we are still in the early stages and most precautionary measures and travel curbs are likely to take some time to roll back, the outlook for the tourism industry and international travel remains uncertain, at least for the first half of 2021. We are however cautiously optimistic that moderate recovery is in sight and the worst may be over. Businesses, especially those in the tourism sectors like us, will need to be careful with their cash management to ride over this perfect storm. We are thankful to the Government for the many financial assistance programmes and policies that have helped businesses and their staff during this trying time.

GRATITUDE

Our achievement and performance have always been the result of a collaborative effort, and resilience in the face of unexpected challenges. I would like to express my sincere gratitude to our staff, management, directors and business partners for their contribution and sacrifices made for the year under review:

  • Our staff and management team at our business units for constantly improving themselves and committing to their roles and responsibilities, despite the circumstances. Their positive and righteous attitude is the key factor in ensuring that we have a stable work force amidst the disruptions.

  • Our various other stakeholders, business associates and professional consultants who have helped us.

  • My fellow directors on the Board and all directors of our group companies for their valuable counsel and contributions.

  • Last but not least, our shareholders for their faith, trust and encouragement and for displaying solidarity with us.

We will continue to build on the solid foundation that we have laid, as well as the resilient business model we have adopted to ride over the current challenges. We remain committed to a multi-pronged approach in generating value through effective corporate governance, innovation and value-added investments.

Wu Hsioh Kwang
Executive Chairman