Straco Corporation Limited

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Second Quarter Ended 30 June 2018 Unaudited Financial Statement And Dividend Announcement

Financials Archive

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Income Statement

Income Statement

Statement Of Comprehensive Income

Comprehensive Income Statement

Balance Sheet

Balance Sheet

Review of the performance


In the second quarter of FY2018, the Group achieved sales of $28.27 million, 6.4% lower than the corresponding period in 2Q2017, mainly due to lower revenue achieved by our Singapore Flyer on lower visitor numbers, as well as lower revenue at Shanghai Ocean Aquarium ("SOA") as value-added tax on ticket revenue were being accounted for this year by SOA, as the tax waiver on ticket revenue for Shanghai educational bases for this year has not been issued yet.

Cumulatively, overall revenue for the first half of FY2018 amounted to $47.07 million, 18.5% lower than the corresponding period in 2H2017, mainly attributable to the more than two months suspension of rides on our Singapore Flyer during the first quarter due to a technical issue.

Overall visitation to all our attractions was 1.22 million visitors for the quarter, 1.2% lower than the corresponding period in 2Q2017.

Operational Results

Total Expenses (excluding finance cost) for 2Q2018 was 14.25 million, a decrease of $0.62 million, or 4.1% from 2Q2017. Depreciation and amortization expense was lower than corresponding period, mainly due to certain assets being fully depreciated assets at Singapore Flyer and Underwater World Xiamen ("UWX"). Cost of sales for 2Q2018 was lower than corresponding period, due to lower retail and F&B sales. Sales and marketing expenses for the quarter increased, mainly due to higher sales and operation taxes incurred this quarter as SOA accounted for the surtax on value-added tax payable on ticket revenue, as required by the Shanghai Municipal Tax bureau, while pending for the tax waiver on ticket revenue for this year to be issued. Repair and maintenance expenses for 2Q2018 increased, mainly due to higher expenses incurred for the general maintenance of the Giant Observation Wheel, while SOA, UWX and Lixing Cable Car also incurred slightly higher maintenance expenses.

Profit before tax was $15.33 million for the current quarter, 7.8% lower than the profit before tax of $16.62 million for 2Q2017.

Balance Sheet items

Intangible assets decreased 11.8% from $2.59 million at 31 December 2017 to $2.28 million at 30 June 2018, due to the amortization of intangible assets for the period.

Other current assets increased 22.3% from $0.94 million at 31 December 2017 to $1.15 million at 30 June 2018, mainly due to increase in prepayments.

Deferred income decreased 15.2% from $0.18 million at 31 December 2017 to $0.16 million at 30 June 2018, mainly due to the periodic recognition of deferred income to profit & loss in the current period.

Current tax liabilities increased 39.5% from $2.45 million at 31 December 2017 to $3.42 million at 30 June 2018, mainly due to the provision of income taxes for 2Q2018 profits at our China subsidiaries, partially offset by the payments of 4Q2017 income taxes of China subsidiaries and 2017 (YA2018) income taxes of Singapore entities in the current period.

Cash flow Statement

The Group generated net cash from operating activities amounting to $12.99 million for 2Q2018. During the quarter, the Company paid out dividends of $21.56 million for the financial year ended 31 December 2017, used $0.65 million for share buyback from the open market and received $0.53 million from the exercises of share options. As at 30 June 2018, the Group's cash and cash equivalent balance amounted to $180.45 million.


The National Bureau of Statistics of China reported that China's gross domestic product ("GDP") grew 6.7% in the second quarter of 2018, down from the first quarter's 6.8% growth, amid the escalating trade tension with the United States. For the first half of 2018, GDP expanded 6.8% to about 41.9 trillion yuan, with consumption contributing to 78.5% of economic growth. Average disposable income in 1H2018 also up 6.6% to 14,063 yuan year-on-year.

On the tourism sector, data from China's National Tourism Administration ("CNTA") showed that China's domestic tourism industry earned 4.57 trillion yuan with 5 billion domestic trips made in 2017, up 15.9% and 12.8% respectively. The country has set the target of earning 5.98 trillion yuan in its tourism industry in 2018.

In Singapore, the economy grew 3.8% year-on-year in 2Q2018, based on advance estimates from the Ministry of Trade and Industry. On the tourism sector, Singapore Tourism Board ("STB") statistics showed that overall visitor arrivals for January to May period increased 6.9% year-on-year to 7.65 million. Tourism receipts are forecasted to be in the range of $27.1 billion to $27.6 billion (up 1-3%) and international visitor arrivals in the range of 17.6 million to 18.1 million (up 1-4%) this year.