Thank you very much for the questions and the opportunities to clarify them. We hope you have a better understanding of our business through this online exchange.
Your questions will be reposted in blue followed by our replies in black.
The Management Team
OKP Holdings Ltd
Dear Susan Tang, you wrote:
Your representative licence expired in Jakarta, Indonesia. Is it difficult to get projects there?
Our primary focus and strong track record has always been in Singapore, under two core business segments: Construction and Maintenance.
While we have been on the lookout for suitable opportunities abroad, the Indonesian construction industry has been challenging due to political factors.
Moving forward, we will continue to focus on our civil engineering business, and at the same time seek to collaborate with strategic partners to broaden our foothold locally and overseas.
Dear Ryan Lu, you wrote:
Your finance cost has ballooned from S$77K in FY2017 to S$1.1 million in FY2018. How do you cope with rising interest rates?
Rising interest rates have affected the economy as a whole. We are carefully managing its impact and closely monitoring the interest rate movement.
The majority of our interest expense was attributable to a term loan for the purchase of an investment property at 6-8 Bennett Street, East Perth, Western Australia. This investment has generated positive recurring rental income for FY2018.
In addition, we have a strong positive cash flow position, with free cash and cash equivalents of S$69.2 million as at 31 December 2018 to support our business operations and growth.
Dear Alvin Ng, you wrote:
You bought your first overseas investment property in Australia for rental income. Were you approached to buy? How did you end up with this deal?
The acquisition of the office complex in Perth, Australia is a strategic move that is in line with our long-term strategy to diversify earnings and build recurrent income stream.
Based on the current occupancy rate of 68%, we see good upside potential in raising occupancy as we expect demand for offices in Perth CBD to continue to improve in the medium term. This is supported by the limited new office supply and strong demand for good quality office space in Perth.
The investment has seen good returns in FY2018.
Dear Nah Wee Kee, you wrote:
The company recorded a write-down of $1.9m fair value loss for your investment properties. Can you shed some light on why and which properties are these?
The Group's investment properties which are located in Australia and Singapore, are measured at their fair values at the balance sheet date as determined by independent professional valuers. These investment properties are assessed at the end of each reporting period. Changes in fair value are recognised in profit or loss as they occur and reflect market conditions at the end of the reporting period.
The properties that have been affected by changes in fair value are: 6-8 Bennett Street, No. 190 Moulmein Road and 7 Woodlands Industrial Park E2.
Thank you for all your questions and the interest in OKP Holdings Ltd. We have come to the end of this Q&A session.
We have enjoyed and learnt much from your questions and we hope that you have a better insight of our Company and know more about our operations.
The Management Team
OKP Holdings Ltd.