Symphony International Holdings Limited has announced results for the year ended 31 December 2015. The NAV attributable to the ordinary shares on 31 December 2015 was US$1.3172 per share (US$1.3011 per share on a fully diluted basis). This represents a 2.2% decline over the NAV per share of US$1.3473 at 31 December 2014 (US$1.3356 per share on a fully diluted basis). Excluding the impact of the US$30 million dividend paid in 2015 (4.69 cents per share), Symphony’s NAV would have increased by 2.9% year-over-year in 2015, compared to a 2.7% decline in the MSCI AC Asia Index.
Aside from a small follow-on investment in Niseko, they made a partial exit of our investment in IHH through a sale in the market of 14 million shares to take advantage of a sharp run-up in IHH’s share price. The partial exit generated approximately US$23 million in proceeds and was completed at an annualised rate of return and times the original cost of the investment of 20.6% and 1.8x, respectively. They continue to hold 42 million shares in IHH.
Overall portfolio companies in the healthcare sector that include IHH and PREIT continued to grow. During 2015, IHH increased its footprint with the addition of 11 hospitals, which provided approximately 3,000 more beds to its portfolio. This expansion brought the total number of beds and hospitals in IHH’s portfolio to approximately 10,000 and 49, respectively. IHH reported core revenue and EBITDA growth (excluding contributions from PREIT and exceptional items) in 2015 of 12% and 9%, respectively that was driven by an increase in patient volumes and treatment intensities across the group in addition to a ramp up in business in new hospitals. They see the rapidly growing demand for quality healthcare services continuing to drive IHH’s growth and expansion for the foreseeable future. Subsequent to 2015, IHH announced plans for a 350-bed hospital in Western China and the breaking of ground for a 250-bed facility in Myanmar. They continue to work with IHH management on specific projects where they see opportunities to add value.
Their other investment in the healthcare sector, PREIT, has been focused on asset recycling initiatives to drive growth. Following the sale of seven properties in December 2014, PREIT re-deployed the capital proceeds with the acquisition of an additional seven properties in March 2015. The asset recycling contributed to a yield enhancement of approximately 0.5% and a higher quality portfolio of properties. In 2015, PREIT reported an increase in gross and net property income by 2.3% and 2.4%, respectively. In addition, PREIT’s annualised distribution yield increased by 15.3% during the same period.
MINT, their primary investment in the hospitality sector reported a stellar performance in 2015 despite the strong economic headwinds in emerging Asian economies. In addition to expanding its portfolio by 20 hotels and 143 restaurants, MINT reported growth in revenue and EBITDA of 15% and 9%, respectively, which excludes benefits from fair value adjustments. MINT is on track to achieve its expansion plan of having 140 hotels and 2,700 restaurants in its portfolio by 2017. Subsequent to the 2015 financial year, MINT continued to announce new projects with the launch of the Oaks Group in India and separately, an Anantara development in Bali, Indonesia. We are seeing increasing business and leisure travel in Asia, particularly originating from China and India, which is only expected to increase and be a key driver for the hospitality sector. They feel MINT is one of best positioned hospitality companies in the region to capitalise on these trends.
In the lifestyle sector, their investments in WCG and C Larsen remain focused on expansion. Although they did see some reduced growth during the second half of 2015 due to the difficult market environment, the Wine Connection Group continued to expand its footprint in Singapore and Thailand with 67 outlets at the end of 2015. The management team is in the process of expanding to other Asian countries that will begin in the first quarter of 2016. The WCG brand and concept is highly transferable to other Asian countries and they are confident on the long-term growth prospects for this business. During 2015, C Larsen increased its lifestyle offering with the opening of a food and beverage outlet in Singapore that is franchised under the Clinton Street Bakery Company name. Aside from successfully continuing to grow its furniture retail and distribution business, C Larsen intends to expand the food and beverage business to other cities in Asia.
On the property development side, our Amanresorts branded development in Desaru, Malaysia is progressing and we hope to begin marketing of the villas towards the end of 2016. The unique nature of the site, close proximity to Singapore and six star facilities that include a marina, will make it a truly enviable location for a vacation property. In Niseko, they continue to hold our land and explore various development and sale options. They saw strong visitor numbers to Niseko that reinforces its reputation as the premier skiing destination in Asia. During the 2015/2016 ski season, there was strong demand for new property development releases, which they expect will only increase in the future.
Their properties in Bangkok, Thailand that include the two SG Land office buildings and the land held by Minuet did not have any material movements in value during 2015. Symphony continues to receive an attractive yield from the SG Land buildings and they are exploring opportunities to enhance the value of the Minuet land, which we hope to provide more details later in 2016.
SIHL : Symphony NAV slips a little in 2015