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Corporate Information
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CHAIRMAN'S MESSAGE
On behalf of the Board of Directors, I am pleased to present to you the Annual Report of IPC Corporation Limited ("IPC" or "The Group") for the financial year ended
31 December 2010 ("FY2010").
Year 2010 was a year of implementation of the Group's strategy in Japan - buying and selling of residential apartment units and investment in income producing properties, business hotels in particular.
The buying and selling of foreclosure Single Family Residential ("SFR") units in the USA also contributed to the Group's performance for 2010.
FINANCIAL OVERVIEW
Group sales increased 15.5% to S$23.143 million for year ended 31 December 2010 when compared to S$20.029 million recorded in the previous year. The increase was attributed primarily to the sales of apartment units in Japan and residential properties in USA. Correspondingly, gross profit increased by 50.1% to approximately S$5.379 million as compared to S$ 3.584 million in FY2009.
The Group's other gains of approximately S$6.545 million was mainly attributed to gains of S$4.415 million from the disposal of its "available-for-sale" investments and approximately S$5.028 million from the revaluation of investment properties in Japan whilst weighed down by an unrealised foreign translation loss of about S$3.497 million. The unrealised foreign translation loss was due to the weakening of exchange rate of US dollars and Chinese RMB, and the strengthening of exchange rate of Japanese Yen against Singapore dollars.
With the improvement on gross profit, coupled with other gains and other income, the Group registered a profit before tax of about S$6.668 million and an after-tax profit attributable to shareholders of S$4.824 million for the year ended 31 December 2010.
As at 31 December 2010, the Group's cash and cash equivalents remain at a strong position of about S$68.717 million as compared to S$55.395 million in the previous corresponding period.
With our healthy cash position, IPC shall continue to proactively seek for new opportunities and to implement its defined strategies.
DEVELOPMENTS IN FY2010
The Group's twin-strategy in Japan -- buy-sell activity in residential apartment units and investment in income producing properties, primarily focusing in business hotels, has taken shape for the year under review.
At the end of Q1 2010, the second purchase of residential apartment units comprising of 50 units located in Tsuchiura, Japan was bought for JPY 190 million. All the units were completely sold in the year under review.
On 26 April 2010, the Group purchased a distressed uncompleted condominium project comprising 77 apartments at Uraga, Japan and development is in progress and scheduled for completion in the 1st half of 2011. Contribution shall be recognised upon completion as the whole project has been sold. This is the third residential project, which the Group had purchased since venturing into the Japanese property market.
On the investment in business hotels in Japan, the Group purchased the first two business hotels in Tokyo - Asagaya (112 rooms) and Asakusa (96 rooms) with a total acquisition cost of approximately JPY 1.866 billion or around S$28 million. Operations for the said two hotels have started since 7 August 2010 and they are managed under the "Smile" brand. The two hotels are expected to contribute positively to the Group's performance.
The Group on 21 Dec 2010 acquired a third business hotel (208 rooms) in Okayama, Japan with a total acquisition cost of approximately JPY 711 million or S$11.09 million. The Okayama hotel is leased with a fixed term till end of September 2020 to KK Greens, which operates more than 50 hotels by its group of companies in Japan under the "Comfort" brand. The Okayama hotel shall have a positive contribution to the Group from FY2011.
The buy-sell activity of Single Family Residential ("SFR") units in USA is ongoing, albeit at a slower pace due to the irregular foreclosure issues faced by the major banks.
The Group is continuing its efforts to evaluate and invest in business hotels in Japan with a plan of building a portfolio of income producing assets. In addition, the Group's unit in China continues its property consulting and investment (PCI) activity in the 2nd tier cities.
FUTURE PLANS AND PROSPECTS
Having established a more in-depth presence and stronger connection in Japan, the Group will continue its strategic thrust in buy-sell activity as well as investment in income producing properties. The Group shall also be venturing into acquiring of land to develop and sell.
In addition, the Group will continue to execute its strategies in the USA and China.
DIVIDEND
In appreciation of the support demonstrated by our shareholders in FY2010, the Board of Directors is recommending a final dividend of S$0.0025 per ordinary share.
WORD OF APPRECIATION
On behalf of the Board of Directors, I would like to take this opportunity to thank our shareholders, management team, business associates and our valued customers for their dedication, support and contributions made to the Group for the past year. We look forward to your continual support as we strive to create greater shareholder value for all in 2011.
NGIAM MIA JE PATRICK
Chairman & Chief Executive Officer
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