Chairman and CEO Message

Dear Shareholders,

The financial year ended 31 December 2019 ("FY2019") was a challenging one because of geopolitical and economic events during the year. Despite these headwinds, SUTL Enterprise remained focused on building on the rising strength and reputation of our ONE°15 brand, which we believe is key to our ambitions as a developer and operator of integrated marinas.

We created our ONE°15 brand to be synonymous with world class integrated marinas that feature top-notch, professionally-run facilities and amenities. Being an Asian brand is to our advantage because of the cultural inclination for exuding warm hospitality and we intend to use this to differentiate ourselves.

Apart from the software during the year, we had also been working on improving the hardware. In August 2019, our flagship marina, ONE°15 Marina Sentosa Cove Singapore, celebrated the launch of its new Customs, Immigration, Quarantine ("CIQ") facility to offer boaters the convenience of an alternative immigration point. Being selected to host the facility not only raises our profile as a private marina but it also makes it very convenient for our members and guests and enhances the experience of those who use our marina for events such as the annual Singapore Yacht Show. In addition, we are pleased to contribute to help ease the traffic at the existing facility at Sisters' Island, especially during busy periods.

To better cater to the trend of increasingly larger vessels among the regional yachting community, ONE°15 Marina Sentosa Cove has started to restructure and reconfigure its marina. The project will increase the linear footage of berthing pontoons that will allow us to allocate berths to bigger yachts, and we expect this project to complete in Q4 FY2020.

Construction works for our ONE°15 Marina Puteri Harbour Malaysia development is also proceeding as planned. Phase 1 of the project, which includes the construction of the private marina and a floating bar and grille, is due to complete in FY2020. Since the Group's Malaysia subsidiary completed the piling of the clubhouse in Q3 FY2019, it has commenced the tendering process for the project's subsequent phases. Meanwhile, SUTL Enterprise, together with its joint venture partner UEM Sunrise Berhad, has pushed ahead with sales of membership with the opening of a 3,961 sq ft Sales Gallery on 27 July 2019.

ONE°15 Marina Puteri Harbour will also offer sports and recreational activities at the ONE°15 Estuari Sports Centre, which is in close proximity to the upcoming marina. The purpose-built sports centre, which is currently being fitted out, completes our vision of promoting a healthy, active and fulfilling lifestyle among individuals and families of all ages at the precinct. To inject vibrancy and energy into the Puteri Harbour precinct, we hope to establish a ONE°15 branded lifestyle hub through a mix of sporting, lifestyle and yachting events. Members of ONE°15 Marina Puteri Harbour Malaysia will have the sports centre included as part of their membership benefits.

Looking ahead, we will continue to create and introduce innovative ideas and events that will add value for our members.

Financial Review

In FY2019, the Group achieved total net attributable profit of S$2.5 million on the back of S$32.4 million in total income, which was 57% and 7% lower on a year-on-year basis, respectively. Lower revenue from membership-related and management fees as well as other income largely contributed to the top line decline, although partially offset by higher sales of good and services.

The Group's bottom line was further impacted by higher overall expenses mainly due to increased advertising, publication and event expenses from the recent ramp-up in marketing activities for ONE°15 Marina Puteri Harbour and higher manpower costs.

As at end December 2019, the Group remained on strong financial footing with cash and cash equivalents amounting to S$48.1 million, up from S$45.4 million a year ago.

A dividend of 2.0 Singapore cents per ordinary share has been proposed for FY2019, unchanged from a year ago, amounting to about 70% of net attributable profit for the financial year. Aside from expressing our gratitude to our shareholders for their trust and steadfast support, keeping our dividend steady – despite ongoing global economic concerns and market volatility – is also reflective of the Board and management's confidence in the Group's growth prospects.

Prospects and Strategy

While the current novel coronavirus ("Covid-19") outbreak has led to the postponement of the annual Singapore Yacht Show, which was scheduled for March 2020 to October 2020, it has yet to significantly affect SUTL Enterprise's business. The Group is closely monitoring the situation while maintaining its ongoing efforts to manage costs and increase operational efficiency. We remain cautiously optimistic about the future of the Group and believe that the market conditions in which we operate remain stable.

SUTL Enterprise remains on track for its longer-term vision to build a global brand and network, one marina at a time. Besides the upcoming ONE°15 Marina Puteri Harbour Malaysia and our flagship ONE°15 Marina Sentosa Cove Singapore, we also manage ONE°15 Brooklyn in New York, USA. We have a robust pipeline of marinas that are under various stages development.

These include the Indonesian Navy Club by ONE°15 in Jakarta, Indonesia, Taihu International Marina managed by ONE°15 Marina in China, ONE°15 Marina Nirup Island Indonesia and ONE°15 Marina Logan Cove Zhongshan China, for which we are currently providing consultancy services and have signed contracts to manage upon completion. In Phuket, we have signed a sales and purchase agreement to acquire a majority stake in a project to be named "ONE°15 Marina Makham Bay Thailand", upon certain conditions being fulfilled.

The Group intends to pursue more management contracts and potential marina acquisition around the world.

Appreciation

We are expanding our operations slowly but surely, and we want to thank all stakeholders, including our shareholders and business partners for their patience and unwavering support over the years.

We would also like to thank the management and staff of SUTL Enterprise for their contribution to help the Group move closer to our corporate vision. In closing, we also want to express our appreciation to our fellow Directors on the Board for your careful guidance and advice on the governance matters of the Group.

Lew Syn Pau
Non-Executive Chairman

Arthur Tay
Executive Director and Chief Executive Officer


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