HONG KONG, March 31, 2016 /PRNewswire/ --
| FINAL RESULTS HIGHLIGHTS
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Nirvana Asia Ltd ("Nirvana Asia" or the "Company", together with its subsidiaries, the "Group", SEHK stock code: 1438) announces today its annual results for the year ended December 31, 2015.
During the year under review, the Group recorded steady growth in both revenue and contract sales, although the weaker Malaysian Ringgit ("RM") had resulted in slight declines in terms of United States dollars ("USD"), the Group's reporting currency. In RM terms, the Group saw revenue continued to grow across all major business segments and regions. Revenue for 2015 amounted to RM580.4 million, 7.4% higher than the RM540.3 million recorded in 2014. Year on year ("YoY") contract sales increased by 14.1% to RM771.7 million.
The net profit attributable to owners of the Company for 2015 amounted to RM339.2 million or USD86.8 million, representing an increase of 189.7% in RM terms or 142.5% in USD terms YoY. Basic earnings per share for the year were 3.22 US cents, up from 1.74 US cents in 2014.
The adjusted profit attributable to owners of the Company ("Adjusted Net Profit") in 2015, after excluding the non-recurring net foreign exchange gain, amounted to RM177.2 million or USD45.3 million, representing an increase of 21.2% in RM terms or 1.6% in USD terms YoY. Adjusted profit margin for the year attributable to owners of the Company increased to 30.5% in 2015 from 27.0% in 2014.
The growth in Adjusted Net Profit was primarily driven by (i) an improvement in gross profit margin for tomb design and construction pursuant to the acquisition of tomb design and construction business in March 2015, and (ii) the higher gross profit margin for burial plots due to economies of scale achieved from higher land utilization and (iii) improved cost control measures for funeral services.
Given the healthy cash flow, the Board of Directors of the Company has resolved to recommend payment of a final dividend for the year ended December 31, 2015 of Hong Kong Dollar ("HKD") 0.05 per ordinary share. Together with the interim dividend declared in August 2015 of HKD0.03 per ordinary share, the total dividend for 2015 would be HKD0.08 per ordinary share or HKD215.9 million representing approximately 60.7% of the Group's Adjusted Net Profit.
The proportion of pre-need contract sales continued to rise from 83.8% to 86.6% in 2015, a proof of market's receptiveness to pre-planning of death care services. Contract sales decreased by 4.4% in USD terms, but increased by 14.1% in RM terms with growth recorded from all five regions that the Group is operating, primarily due to the increase in sales from Singapore, and the newly launched Nirvana Center Kuala Lumpur in Malaysia, Thailand and Hong Kong.
Contract sales from burial plots increased by 10.6% in RM terms YoY, primarily contributed by (1) higher sales from (a) Bukit Mertajam and Kulai in Malaysia and (b) Indonesia, and (2) the newly launched (a) Nirvana Memorial Park in Thailand and (b) sales office in Hong Kong, China.
Niche sales increased by 24.5% in USD terms and 48.1% in RM terms YoY, largely attributed to sales growth from Singapore and the newly launched Nirvana Center Kuala Lumpur in Malaysia. Lower contract sales for tomb design and construction services and others in 2015 was primarily due to higher promotion activities for pre-need tomb construction in 2014 in conjunction with the auspicious Chinese Lunar Year in 2014. Contract sales from funeral services increased by 2.4% in USD terms and 22.2% in RM terms YoY, mainly due to higher sales from as-need funeral services.
Average selling price per sq.m ("ASP") for burial plots increased by 1.8% in RM terms YoY largely due to increase in ASP from Semenyih in Malaysia and Indonesia, but partly offset by lower ASP in Thailand during the initial product launch before the site is ready for interment. Excluding Thailand, ASP per sq.m for burial plots would have increased by 3.6% in RM terms YoY. The Group sold 12,365 units of niches in 2015 representing an increase of 39.7% YoY. ASP for niches increased by 6.0% in RM terms YoY primarily due to a higher sales contribution from the Group's columbarium in Singapore which has a higher ASP. ASP per sq.m for tomb increased by 4.0% in RM terms YoY primarily due to higher ASP per sq.m from Semenyih in Malaysia. The Group sold 5,610 funeral services packages for the year ended December 31, 2015, an increase of 21.5% YoY. Higher ASP by 1.4% YoY was primarily due to increase in ASP of as-need funeral service.
2015 witnessed the Group's successful expansion and sale launches in two new regions, namely Thailand and Hong Kong. Sales contribution from overseas operations increased by 8.1 percentage points to 21.4% from 13.3% in 2014. This is primarily due to strong sales growth from Singapore, and the newly launched Thailand and Hong Kong operations which contributed 1.1% and 0.3%, respectively, to the Group's contract sales in 2015.
Following the successful layout extension from 11,000 square meters ("sq.m") to 43,000 sq.m, the Group also extended the lease period of our Nirvana Singapore to August 2098. This lease extension has enhanced the value and marketability of its products in Singapore.
The Thailand market is attractive due to its large Buddhist population of more than 60.0 million, and the urbanization in Thailand is dominated by the Bangkok urban area. In addition to the 99-acre cemetery in Chonburi, near Bangkok, the Group is exploring various options and sites to set up a columbarium cum parlour in Bangkok.
In Indonesia, the Group has been acquiring lands in Tangerang, near Jakarta, for the development of a cemetery. As at December 31, 2015, the Group had accumulated land areas of approximately 270,000 sq.m. Meanwhile, it had also entered into an agreement to develop a cemetery measuring 75.2 hectares of land in Medan, the third largest city in Indonesia. Medan has an attractive market given its culturally rich Chinese population, and it having the largest Chinese community in Sumatra Island.
In addition to its overseas expansions and on-going acquisition of adjacent land banks and improvements to its existing facilities, the Group had also expanded into the downstream business of tomb design and construction. In Malaysia, it acquired the existing business of tomb design and construction from its contractor at a consideration of RM15.0 million (equivalent to approximately USD4.0 million). This new business segment enhanced the Group's profitability by improving the gross product margin for the tomb design and construction in 2015. The acquisition will continue to provide revenue growth and strengthening the overall quality control which is aligned with the Group's focus on delivering innovative burial services to its customers.
As of December 31, 2015, the Group had approximately 3.0 million sq.m of net saleable burial land available for sale as burial plots and available for future development (excluding cemetery land of 400,000 sq.m in Vietnam), and approximately 400,000 units of niches for sales.
For the year under review, the Group acquired approximately 2.0 million sq.m of land for cemetery development and has received formal approval from the relevant authority to expand the built-up capacity of its columbarium in Singapore by 32,000 sq.m. As a result, Nirvana Singapore will have an unsold niches capacity of approximately 70,000 units.
Tan Sri Kong Hon Kong, the founder, executive director, the Managing Director and the Chief Executive Officer of Nirvana Asia said, "The demand for death care services in Asia continues to grow with enormous potential for development in this industry, despite a challenging economic outlook. As one of the largest integrated death care service providers in Asia, the Group will continue to leverage on our industry know-how and executive and financial capabilities, which could strengthen our operations in existing markets and actively expand into new markets in order to solidify our market leadership and deliver sustainable results to our shareholders."
About Nirvana Asia
Nirvana Asia is the largest integrated death care service provider in Asia, in terms of contract sales, revenue and land bank in 2013, according to Frost and Sullivan. The Company offers burial and funeral services and products on both as-need and pre-need bases, strategically targeting the premium segment of the death care services market. In 2013, Nirvana Asia is the largest death care service provider in Malaysia and the only commercial columbarium operator in Singapore. Currently, the Company offers premium death care products and services through a network of 12 cemeteries, 14 columbarium facilities, six on-site crematoria and two funeral homes in Malaysia, Indonesia, Singapore, Thailand and China.
For further information, please contact:
iPR Ogilvy & Mather
Natalie Tam / Peter Chan/ Clara Liu/ Valerie Guo
Tel: (852) 2136 6182 / 2136 6955 / 3920 7631/ 2169 0646
Fax: (852) 3170 6606
Email: nirvana@iprogilvy.com
