Hong Kong Stock Exchange-listed Far East Consortium (FEC) announced a substantial increase in revenue for the financial year ending March 31st, 2024, despite facing significant challenges from ‘heightened market volatility, fluctuating interest rates, and unpredictable global economic conditions’.
FEC, a joint venture partner with The Star and a 25 percent investor in the multi-billion dollar Queen’s Wharf Brisbane project, saw significant growth. Its subsidiary Palasino Holdings Limited, a European gaming and leisure company, operates casinos in the Czech Republic.
The group reported revenue of approximately HK$10.2 billion ($1.31 billion) for FY24, a 57.5 percent increase from the previous year. Gaming revenue increased 3 percent year-on-year to HK$402.4 million ($51.5 million).
‘The group’s gaming business has consistently shown signs of recovery and growth. Additionally, the Palasino Group reinstated its online gaming license in Malta in November 2023 and has plans for a soft launch of its service in Malta during FY2025,’ FEC stated in its financial report.
Overall, FEC ended the financial year with approximately HK$3.2 billion ($410 million) in adjusted gross profit, a 61.4 percent increase compared with HK$2.0 billion ($256 million) for FY2023.
The group’s major business divisions experienced growth, driven by the settlement of property developments, increased contributions from recurring income ventures, and divestment of non-core assets.
Revenue from property development reached HK$8 billion ($1.02 billion), up 91.6 percent from FY23, as FEC initiated the handover of West Side Place (Towers 3 and 4) in Melbourne and Hyll on Holland in Singapore, significantly contributing to revenue.
The cumulative attributable presale value of properties under development and unbooked contract sales amounted to approximately HK$11.5 billion ($1.47 billion).
Hotel operations saw a 31.2 percent year-on-year revenue increase to approximately HK$2 billion ($256 million), with FEC’s hotel business in mainland China improving as travel restrictions were lifted.
Hong Kong hotel properties transitioned from quarantine guests to business and leisure travelers, increasing demand. The Ritz-Carlton Melbourne and Dorsett Melbourne, opened in March and April 2023, respectively, contributed to the revenue growth.
Strategic Divestment and Acquisitions
FEC continued divesting non-core assets to reinvest in high-return projects and repay bank borrowings. The group sold 130 units of Dorsett Bukit Bintang in Malaysia and the Sheraton Grand Mirage Resort on the Gold Coast, Australia.
The Sheraton Grand Mirage sale was also part of The Star’s efforts to raise funds amongst its ongoing financial transition and regulatory inquiries.
FEC also disposed of the office component of the Kai Tak commercial development in Hong Kong for HK$3.38 billion ($432 million) and is considering selling long-lease residential blocks in Baoshan, Shanghai, and evaluating other non-core assets for potential divestment.
Despite the challenging economic environment, FEC notes that it remains focused on reducing debt levels, minimizing finance costs, and achieving satisfactory revenue.
‘As the global travel industry rebounds, FEC continues to leverage opportunities in key markets, positioning itself for future growth and success,’ the group stated.
