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Chairman’s Statement
Dear Shareholders,
On behalf of the Board of Directors,
it is my pleasure to present to you the
Annual Report of The Straits Trading
Company Limited (“Straits Trading”
or “Company”) for the year ended
31 December 2012.
The year 2012 marked a milestone in
the continuing corporate transformation
of Straits Trading. As we celebrated our
125th Anniversary and rich heritage, we
announced three important transactions.
Two of these transactions will enable us to
monetise one of our key hospitality assets,
while giving us a strategic shareholding
in a larger, scalable platform for growth.
The third transaction has increased
our shareholding in WBL Corporation
Limited (“WBL”) through a share swap
arrangement. These initiatives will
transform our hospitality business and
investment in WBL into new engines
of growth.
For the financial year ended 31December
2012 (“FY2012”), Straits Trading reported
revenue of S$1.16 billion, compared with
S$1.51 billion in FY2011 mainly due to
lower revenue from the Resources and
Property divisions.
The Company reported a net loss of
S$55.2 million compared with a profit
of S$47.0 million in FY2011 mainly
attributable to losses from the Resources
and Hospitality divisions outweighing
profit from the Property division.
Although the results were disappointing,
our business diversification and strong
balance sheet have enabled us to
ride out the difficult period. We are
cognisant that some of these losses
are due to provisions which we believe
were necessary as we continued our
corporate transformation to build our
businesses into growth generators with
disciplined capital management. Despite
the challenging business environment,
our businesses were able to build and
strengthen their competencies.
HOSPITALITY
Our Hospitality division was impacted
by the closure of a number of our
hotels for upgrading and refurbishment.
Encouragingly, revenue remained
relatively stable. During2012, we acquired
the freehold interest in Rendezvous
Grand Hotel Melbourne, a favourable
addition to our hospitality portfolio as
we continue to strengthen and expand
our footprint in the Asia Pacific region.
On 15 April, 2013, Straits Trading signed
agreements with Far East Hospitality
Trust (FEHT) and one of its affiliates,
for the monetisation of Rendezvous
Grand Hotel Singapore and Rendezvous
Gallery for S$285 million, comprising
S$217 million in cash and S$68 million in
FEHT securities. Through refurbishments,
asset enhancements and rebranding,
The Straits Trading Company Limited
ANNUAL REPORT 2012
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