Bangkok 17 August 2020 – Singha Estate announces its performance in the second quarter of 2020 with revenue totaling 927 million baht, a 61% decline, due mainly to the temporary closure of hotels during the COVID-19 crisis, the allowing of unit ownership transfer for some customer groups, and the giving of rental discounts to retail and office tenants. Gross profit dropped on lowering revenue. The company is preparing for business recovery in the second half of this year. It is confident in its strong financial positioning to support its investment plan and explore new business opportunities in the future.

Of the total revenue of 927 million baht, 621 million baht came from the residential development business, 220 million baht from commercial business, and 4 million baht from the hospitality business. The company posted its net loss of 946 million baht in the second quarter of 2020 due mainly to the lockdown measures, the temporary closure of hotels worldwide during the COVID-19 pandemic, the allowing of unit ownership transfer for some customer groups, and the giving of rental discounts to retail and office tenants receiving effects from the virus outbreak. Despite careful spending and expenses, there were some fixed expenses and the company could no longer capitalize interest expense on the CROSSROADS project in Maldives since its commercial launch in September last year.

Mrs. Thitima Rungkwansiriroj, Chief Financial Officer of Singha Estate Public Company Limited or 'S' reveals that the COVID-19 crisis and the lockdown measures continued to affect the company's business with sales of house and condominium declining 51%. The company imposed a measure allowing foreign buyers to delay ownership transfers within this year, which could be a unit inspection on their own or by buyers' representatives or through the 360-degree virtual technology. Moreover, its inventory of remaining units is at an appropriate and manageable level, so the company has no necessity to give big discount to distribute these units.

For the commercial business, the company can maintain its gross profit margin at a satisfactory level as it slashed the advertising and marketing budget to give rental discounts for retail and office tenants, who got an impact from COVID-19 crisis.

For the hospitality business, which got the hardest hit by the COVID-19 pandemic, S Hotels & Resorts Public Company Limited or 'SHR', the flagship hospitality arm of Singha Estate, has suspended commercial services of its 39 hotels worldwide following healthcare and lockdown restrictions in each country from 1 April 2020.

"The company is facing the biggest challenge from the COVID-19 crisis, which has affected every sector from the overall economy, the property market, to the tourism business. During the hard time, the company has adjusted its working process and strategy in preparation for changes and uncertainties and undergone efficient financial management to be ready for an economic recovery and new attractive investment opportunities in the future," Mrs Thitima said.

Meanwhile, Singha Estate hopes the COVID-19 crisis will eventually end soon. The company is moving forward with its 5-year investment plan to build sustainable growth. It will consider investment suitability under the strict M&A criteria to have quality asset that will create added value in the future. The company has strong financial positioning and no cashflow problems, with its net debt with interest burden to equity ratio standing at 0.97 times.

The CFO noted that the COVID-19 outbreak is easing largely in many countries including Thailand with lockdown measures and travel restrictions lifted. As a result, Singha Estate is preparing strategies and marketing plans to drive each business forward. For the hospitality business, SHR gradually reopened its hotels since July and brought in the hotels in Thailand to join the "We Travel Together" program, which will boost domestic tourism, and got a good response so far. It expects its hotels will serve the number of tourists as expected.

After the easing COVID-19 situation, Singha Estate clearly sees an improvement of residential market and is confident that the transfer of unit ownership at The ESSE Sukhumvit 36, the joint venture project with Hong Kong Land with 60% sales, will achieve the target in late third quarter of this year. The revenue recognition for this project will be under the equity method. With the improving trend of luxury housing market, the company can close the sale of one super luxury house in Santiburi the Residences, which will gradually book revenue based on the completion of land transfer and the progress of house construction.

For the commercial business, the company expects its rental discount to tenants will reduce in the third quarter after business activities resume to normal or nearly normal levels. However, it will continue to spend on marketing activities to promote goods and services for retail tenants. Hygiene and safety measures at its buildings will be maintained to reduce infection risk and build confidence for tenants, customers, and visitors.

"With strong financial positioning, Singha Estate will continue to invest under its 5-year plan and look for new business opportunity. The first new business is solar energy, which will start in the fourth quarter in Maldives and build additional recurring income for the company," Mrs. Thitima concluded.