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ANNUAL REPORT 2015
HAW PAR CORPORATION LIMITED
C H A I RMAN ’ S S TAT EME N T
Over the decades,
Haw Par has
built up a strong
balance sheet
and cash position
through prudent
management.
I am pleased to report that Haw Par
performed well in 2015, despite the
challenging and volatile economic
and geopolitical environment. The
Group’s turnover increased to $178.8
million with a strong contribution from
Healthcare. Profit from operations
and investments grew 24% to $139.3
million with an increase in dividend
income from our strategic holdings.
A once-off gain from an associated
company boosted total earnings by
54% to $183.3 million in 2015.
Healthcare’s revenue for 2015
increased 25% to $152.6 million.
Its profits improved by 42% to $48.1
million. Leisure suffered an 18%
decrease in revenue to $12.7 million
due to intense competition and poor
tourist sentiments, recording a loss of
$4.3 million due mainly to a fixed assets
impairment of $4.6 million. Property
recorded a revenue of $13.5 million,
representing a decrease of 17% year-
on-year. Due to the general slowdown
in the property market, profit at $9.9
million was 20% lower than that of the
prior year.
During the year, the Group reduced
its investment in Hong Kong-listed
Hua Han Health Industry Holdings
Limited (previously known as Hua Han
Bio-Pharmaceutical Holdings Limited)
as part of a portfolio rebalancing.
The Group’s remaining stake of 9.8% in
Hua Han was reclassified to available-
for-sale financial assets in the financial
statements.
HIGHLIGHTS OF OPERATIONS
Healthcare’s strategy to drive growth is
focused on further product penetration
across existing markets to widen
the brand franchise for Tiger Balm.
Pursuant to this strategy, new products
were launched in several markets
during the year. Sales of Tiger Balm’s
range of traditional and new products
continued to grow in most of its key
markets. Healthcare’s results, fueled
by an increase in demand for Tiger
Balm products, are a clear validation
of this strategy. Our margins improved
due to lower commodity prices which
also mitigated the pressures from rising
staff costs amid tight labour markets.
Leisure continued to be adversely
impacted
by
changing
visitor
demographics and stiff competition
from newer attractions both in
Singapore and Pattaya. Nevertheless,
Underwater World Singapore and
Underwater World Pattaya focused
on maintaining their grip on key
strongholds and were able to
generate positive cash flow. To remain
competitive, Underwater World Pattaya
has also commenced progressively
upgrading its facilities and displays.
DIVIDEND
The Board recommends a final tax-
exempt (one-tier) dividend of 14 cents
per share and a special dividend of 15
cents per share in view of extraordinary
income recorded in the financial year.
Together with the interim dividend of
6 cents paid in September, the total
dividend per share for the financial year
ended 31 December 2015 is 35 cents
per share, or 75% higher than the
2014 dividend of 20 cents per share.
BUSINESS OUTLOOK AND
STRATEGY
Looking ahead, 2016 is expected to
experience frequent turbulence arising
from an uncertain global economic
environment. Unstable oil prices,
interest rates, currencies and China’s
economic slowdown will present a
challenging business environment
which will affect consumer confidence.
The Group will prepare itself to deal
with the headwinds in the year ahead,
with a disciplined approach in pursuing
sustainable growth.
The competitive position of Tiger
Balm as one of the world’s leading
topical analgesics is dependent on its
ability to further strengthen its brand
equity worldwide. Its range of product
offerings tailored to meet the ever-
changing lifestyle needs of consumers
has put the brand in good stead to
capitalise on the wellness trend. Tiger
Balm’s priority now is to harness
the potential of its brand equity by
accelerating the pace of introduction
of new product offerings in selective
new markets and deepening its
distribution networks. While stricter
healthcare regulatory frameworks will
continue to raise the bar for market
entry of new products, Tiger Balm
is poised to grow its presence in key
markets by building on the knowledge
and experience gained.
Over thedecades, HawPar has built upa
strong balance sheet and cash position
through
prudent
management.
Leveraging on our financial strength
and global business networks, we seek
to pursue investment opportunities
that would enhance our earning
contribution from operations through
acquisition of compatible or new
businesses. With the slowdown in the
global economy, I am hopeful that there
may be opportunities for prospective
acquisitions by the Group.
ACKNOWLEDGEMENT
On behalf of the Board, I would like
to thank our stakeholders including
our customers, business associates
and shareholders for their continuing
support. Our team of management
and staff worked tirelessly to uphold
our values and I thank them for their
commitment and devotion.
I would also like to pay tribute to
my fellow Board members for their
wise counsel and commitment in the
past year.
Wee Cho Yaw
Chairman
