The Singapore Tourism Board has moderated its forecast for 2015 to 15.5 million visitor arrivals. However, with the additional room supply in 2015, the hospitality sector could be challenging.
The launching of key initiatives such as a S$35 million partnership with Changi Airport Group and a S$20 million global marketing campaign aim to improve visitor arrivals.
Group revenue for 2Q 2015 decreased marginally by 3% to $19.1 million, from $19.7 million in 2Q 2014. This was due to absence of revenue from development property sold, partially offset against higher revenue from Hotel Investment and Management segment and rental income from investment properties in the Property Investment and Development segment.
Cost of properties sold / consumables used for 2Q 2015 decreased by 25% to $1.5 million, from $1.9 million in 2Q 2014. The decrease was due to absence of development property sold in 2Q 2015.
Staff costs for 2Q 2015 increased significantly by 23% to $5.8 million, from $4.7 million in 2Q 2014. This was mainly due to increase in headcount from the newly opened hotel in Bangkok.
Higher interest rates on loans caused finance costs for 2Q 2015 to increase by 73% to $1.6 million, from $0.9 million in 2Q 2014.
Other expenses for 2Q 2015 increased by 9% to $6.5 million, from $6 million in 2Q 2014. This was mainly due to operational costs from the newly opened hotel in Bangkok.
Weak outlook with increasing debt and operating expenses. Will hold on to this stock in view of newly opened hotel in Bangkok with possibility of positive profit returns. It is good to see Amara investing overseas as hospitality sector in Singapore will continue to weaken. Bangkok is a good investment due as it is one of the popular tourist destinations.