Singha Estate reports spectacular gains in 2021 as risk diversification strategy pays off

Singha Estate Pcl reported an 18 per cent increase in revenue year on year amid the Covid-19 pandemic, and a spectacular turnaround in results year on year in the fourth quarter.

The company reported revenue of 7.739 billion baht for 2021, with improvements year on year in four consecutive quarters, aggregating an 18 per cent rise compared to the previous year. Singha achieved a net profit of 100 million baht in the fourth quarter alone, after reporting a loss for the period in the previous year.

The increase in revenue came primarily from the hospitality business, which reported 4.512 billion baht revenue, nearly triple the total revenue from sales and services last year. The company sees the performance as the success of its strategy to diversify risk.

Nearly 90 per cent of total revenue in 2021 was contributed by the UK Portfolio hotels, which gained from the strong recovery of the tourism industry from the high vaccination rate. The Project Crossroads Phase 1 hotels were highly rated and attracted various types of customers.

In the fourth quarter, the American Depositary Receipt (ADR) of Crossroads Phase 1 hotels was $418 (13,650 baht), the highest ADR level since its opening in September 2019, emphasising a positive signal to future revenue growth.

Singha Estate CEO Thitima Rungkwansiriroj attributed the performance to its strategies to continue adjusting its business model and differentiate through product/service development to enhance profitability.

The strategies along with effective cost management enabled the company to achieve earnings before income tax, depreciation and amortisation of 1.562 billion baht, up 213 per cent from the previous year.

Singha Estate reported a net profit of 100 million baht for the fourth quarter, a radical turnaround from the loss of 2.029 billion baht for the same period last year.

The company continued to emphasise the success of Santiburi the Residences through the development of low-rise projects to leverage brand equity, focusing on the luxury segment priced at 20 million to 100 million baht, which is considered the company’s key area of expertise.

Singha Estate expects to officially launch the first project at Pattakarn 32, with units priced at 50 million to 100 million baht in the second half of 2022. The company plans to acquire four additional land plots in other potential districts in 2022.

Despite the pressure from negative factors towards commercial property for the rental market, a balance of customer portfolio management, asset improvement, and the offering of new business models to cope with changing demand are factors driving the average occupancy to remain at 87 per cent.

In the second quarter of 2022, Singha Estate expects to officially launch its new office building, “S Oasis”, which was designed under the “hybrid workplace” concept to support high flexibility in useable area. This project is the first Prime Grade office tower located on Vibhavadi Rangsit Road with approximately 54,000 square metres net leasable area for office and retail space.

Singha Estate has signed a long-term lease agreement with S Prime Growth Leasehold Real Estate Investment Trust (SPRIME) for three premium office buildings and retail space, which will have total rental space of over 64,000 square metres.

The lease agreement is valued at not less than 6.45 billion baht. This follows the company’s asset portfolio management strategy, which will focus on capital recycling to strengthen its financial positioning and to support consistent business expansion while enhancing SPRIME’s growth potential.

“This is a milestone year that marks our transition into the next phase of Singha Estate’s development journey to strengthen its portfolio with competitive advantages and create unique selling points. This follows our mission to drive the business to become one of Thailand’s foremost enterprises that leverages the synergies between multiple property sectors and across related services to double revenue in 2022,”