INTERVIEW WITH CHIEF EXECUTIVE OFFICER
3
Are there any plans to divest your entire Hotel
Portfolio in the near future?
This entails constant evaluation of the trade-
offs between one-off development gains and
existing business with a recurring income
stream. Premature asset sales to realise one-off
gains will erode the overall scale of our business
and reduce the level of future recurring income.
As we move forward, we are mindful of how
these decisions will impact the long-term
interests of our shareholders. We will evaluate
and consider our options when the right
opportunity arises as we firmly believe that every
property in our portfolio should continually be
evaluated and the Group is committed to seek
the best use of our assets.
4
Why is SLC paying only dividend of 0.5 cents
per share for the financial year ended 2016?
This is even lower than the 1 cent during
the global financial crisis period. Will the
dividends increase when MPV is completed
and profits are recognised?
We are evaluating the possibility of issuing scrip
dividends which achieves the effect of giving
shareholders stocks they can convert without
affecting the cashflows of the Group. As we
remain committed to seek growth opportunities
while funding programmes for existing portfolio
enhancement and development projects, we
are mindful of maintaining a dividend payout
that does not deprive the Group of ready
resources to take advantage of opportunities
often found in slow-downs in the economy.
5
Why is Dynon’s Plaza recorded at market
valuation but not for the hotels?
Dynon’s Plaza is an investment property, which
is held for rental or capital appreciation or both.
Our hotels, on the other hand, fall under the
classification of “Property, Plant and Equipment”
(PPE) under the accounting standards since the
Group owns and manages them.
In view of the difference in classification,
investment properties have to be measured at
fair value and any changes would have to be
recorded in the “Profit and Loss”. However,
PPE are recorded at acquisition costs at the
recognition date.
PPE can subsequently be carried at cost less
depreciation or revalued to its fair value.
However, any fair value adjustments will have to
be carried through to the revaluation reserves
and crystallise in the “Profit and Loss” only upon
disposal of the PPE.
6
Since the accounting standards allow for
PPE to be revalued to its fair value, why is
management not revaluing the assets?
We have been conservative and have based
our long-term fixed assets on acquisition
costs. This is prudent and good practice. Given
many of our properties were purchased two
decades ago, there should be fair value gains
from revaluing our hotel portfolio. Revaluation
exercises are time-consuming and costly, and
will inevitably result in unnecessary fluctuations
during market downturns.
Notwithstanding, we may consider revaluing
our long term fixed assets should the need
arises, for example, if new accounting standards
require us to do so.
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STAMFORD LAND CORPORATION LTD
