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Public company info - South Shore Holdings Limited , 00577.HK
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South Shore Holdings Limited, 00577.HK - Company Profile
Chairman Peter Lee Coker Jr.
Share Issued (share) 1,013,000,000
Par Currency Hong Kong Dollar
Par Value 0.2
Industry Construction & Decoration
Corporate Profile Business Summary: South Shore Holdings Limited is a hospitality, entertainment and construction group that combines a unique ultra-luxury hotel and entertainment development on Macau’s Cotai Strip (the “Hotel”) with the Hong Kong-based legacy business of Paul Y. Engineering Group Limited (“PYE”). Performance for the year: For the year ended 31 March 2020, the Group’s consolidated revenue including joint operations increased to approximately HK$10,899 million (2019: HK$9,382 million). Gross loss decreased to approximately HK$84 million (2019: HK$110 million). Gross loss margin decreased to 0.77% (2019: 1.17%). Loss attributable to owners of the Company for the year was approximately HK$1,022 million (2019: HK$5,848 million), represents an decrease of approximately 83%. Basic loss per share was 100.9 HK cents. Business Review Hotel Business The Hotel (100% owned) The Hotel and entertainment complex, located at the southern end of Macau’s famous Cotai Strip, houses a unique collection of refined and remarkable luxury experiences. Due to the outbreak of COVID-19 pandemic, the Macau government implemented stringent government measures including the closure of all casinos in Macau for 15 days. In addition, from mid-March 2020, Macau disallowed entry by all non-residents (except residents of Mainland China, Hong Kong and Taiwan). Visitor arrivals in Macau fell 93.7% year-on-year to 212,300 in March 2020 due to the COVID-19 pandemic. In light of the recent outbreak of COVID-19 pandemic and the challenging economic conditions, the Group, following the practice of many other hotel operators in Macau, made the decision to close the Hotel for the foreseeable future. The hotel segment recorded total liabilities of approximately HK$5,266 million* which include liability portion of convertible bonds issued for financing the hotel development and bank and other borrowings for the hotel development. Revenue of hotel rooms and food & beverage was approximately HK$17 million and HK$12 million, respectively for the year ended 31 March 2020. The average occupancy rate was 37.3% with average daily room rate at around HK$1,829 for the year ended 31 March 2020. There was segment loss of approximately HK$994 million* for the year ended 31 March 2020 of which the loss before interest, tax, depreciation and amortization of the hotel segment for the year was approximately HK$146 million. The hotel segment also incurred depreciation charge of approximately HK$353 million* for the year. Finance costs on bank and other borrowings was approximately HK$343 million for the year ended 31 March 2020. Finance costs on convertible bonds was approximately HK$152 million for the year. During the audit process, the Group conducted an impairment test of the assets of hotel business according to the accounting standards and engaged an independent valuer to assess the value of the Hotel. Due to the outbreak of the COVID-19 pandemic and the quarantine measures implemented by the Macau government and the Hong Kong government, the audit work and valuation work have been affected. Therefore, the recoverable amount of the hotel business (the cash-generating unit to which the asset belongs) and its financial impacts for the year ended 31 March 2020 remain subject to changes, depending upon the valuer’s valuation report and the auditor’s review and assessment thereof. Engineering Business PYE (51.76% owned) The outbreak of the COVID-19 pandemic in the last quarter of this financial year has seriously affected many business sectors including construction industry. Due to the mandatory quarantine requirements and health guidelines, there has in any event a downturn in the availability of human resources for the Group's construction sites. In addition, the resulting continued closure or limited resourcing of government departments and public services in Hong Kong and Macau has impacted progress due to inevitable delays to the processing of submissions and granting of approvals and permissions in connection with the Group's projects. Temporary city lockdown and production suspension has also caused the breakdown in the supply chain. With such disruption to the Group's projects, the productivity has been reduced and progress on the projects was slowed down in the last two months of the year under review. Management contracting division remained the core business and the major contributor of revenue this year. Revenue of this division amounted to approximately HK$10,981 million (2019: HK$9,348 million), up by about 17%. Its operating profit amounted to approximately HK$98 million (2019: HK$189 million). As at 31 March 2020, the value of contracts on hand was approximately HK$44,218 million, while the value of work remaining had stood at approximately HK$26,546 million. During the year under review, the management contracting division secured new construction contracts with an aggregate value of approximately HK$15,681 million. Subsequent to the year end, the division secured further contracts of approximately HK$1,958 million. The property development management division reported a loss of approximately HK$1 million for the year under review. The value of contracts on hand for property development management division at the year end was approximately HK$89 million. The property investment division reported a loss, through its joint venture, of approximately HK$2 million for the year under review. The joint venture holds an investment property in Hangzhou of the PRC, the Pioneer Technology Building, which is an office building with gross floor area of about 20,000 square meters. The building generated rental income of about HK$11 million (2019: HK$11 million) for the year and its occupancy reached about 92% as at 31 March 2020. Prospects: Hotel Business Macau receives approximately 39.4 million visitors for 2019 with approximately 27.9 million from Mainland China and approximately 8.5 million from Hong Kong and Taiwan. The visitation to Macau for 2019 recorded an increase of 10.1% compared to the year 2018. Due to the COVID-19 pandemic, visitor arrivals in Macau fell 93.7% year-on-year to 212,300 in March 2020. Looking ahead, the hotel market in Macau continues to growth steadily but the overall external economic environment is still posing uncertainty including the COVID-19 pandemic, US-China trade tension is expected to continue and raise uncertainty on the political and financial risks in short-term, but it still looks remain optimistic in long-term business. Engineering Business PYE (51.76% owned) The COVID-19 pandemic has cratered the global economies. Many social and economic activities were brought to halt and most countries are now struggling a balance between public health and economy. Although governments of major economies have put on stream different measures to stimulate economic activities, the road to recover will still be long. In addition, the global economies are also hampered by various vulnerabilities, including the intense trade relations between the United States and China, uncertainties brought by “Brexit” negotiation, heightened geopolitical risks, which possibly send shocks to the global financial market and hinder economic recovery. As an outward-looking economy, Hong Kong is easily influenced by these external unfavourable factors. The lingering effect brought by new coronavirus infection has also inflicted severe blow to most sectors of Hong Kong. It is believed that the unprecedented economic pressure and market volatility will remain, resulting in deepen economic recession in Hong Kong for the remaining year of 2020. Facing the hike of unemployment rate and contraction of economic activities, private investors will become more cautious and demand in private sectors may drop in the short run until their confidence is rebuilt. Accordingly, competition in project tendering will become more fierce. Nevertheless, as the Hong Kong Government has introduced a number of favourable construction policies, such as constant expenditure increase in public works projects and infrastructures, and a number of long-term development initiatives, covering the second 10-year Hospital Development Plan, harbourfront development initiatives, and innovation and technology infrastructures. PYE group holds the cautiously optimistic attitude towards the prospects of construction industry, and its potential growth and development in the medium and long term. Rooted in Hong Kong for many years, PYE group has gone through a number of market adversities with the city. It is believed that, with the strong foundation of PYE group, cautious and flexible business strategies and planning, the Group will overcome the various challenges from volatile market conditions. the Group will continue to review the business operation, and pay close attention to market development. By advancing business strategies and project management, as well as effective control in internal resources, the Group strives to move forward the Group's overall business development. PYE group will also explore opportunities to expand the Group's facilities management business.

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