Landmarks eyes JV partner for new hotels in Indonesia

KUALA LUMPUR (May 25): Loss-making hospitality and property company Landmarks Bhd is looking for a joint-venture (JV) partner to add new hotels and resorts within its Treasure Bay Bintan development in Bintan, Indonesia.

“We are strategically looking for a joint-venture partner to invest [in the land that we will provide] in order to build more hotels [to add to our ongoing development in Bintan, Indonesia],” said the group’s chief executive officer Mark Wee Liang Yee after the group’s annual general meeting yesterday.

Currently, the group only has one resort in the Treasure Bay Bintan development called the Canopi Resort, which has 100 tented glamorous camping suites, said Wee, and the group wants to add more conventional hotels and resorts there. However, he declined to reveal how many additions the group is looking at.

Treasure Bay Bintan is an 850-acre (338ha) development in Indonesia which Wee said will see ongoing additions, in the form of wellness centres and attraction sites like recreational seawater sports site “Crystal Lagoon” and an adventure site dubbed “The Marine Life Park” — both of which are expected to be ready in early 2018.

Wee said infrastructure of Phase 1 of the 850-acre development has already been completed, and that the group has thus far seen a 15% contribution from Treasure Bay Bintan to its overall revenue since 2016.

Meanwhile, the group hopes to return to profit by the financial year ending Dec 31, 2018 (FY18), driven by increased revenue from the Treasure Bay Bintan development.

“We are aiming to break even by end-FY17, and then to see recurring income to bring us back to the black by FY18,” Wee said.

He added that the group’s other core asset is The Andaman, located in Langkawi, which currently contributes about 85% of the group’s overall revenue.

In FY16, the group’s net loss widened to RM27.94 million, from RM12.06 million in FY15, mainly as its resort and destination development divisions recorded operating losses of RM45.1 million due to property development costs written off and expenses incurred for business commencement and start-ups. Revenue, however, widened by 34% to RM83.16 million from RM61.92 million.

The group, which is a 30.3%-owned associate of Genting Bhd, narrowed its net loss to RM3.35 million in the first quarter ended March 31, 2017, from RM6.59 million a year ago, on an improved performance of both its hospitality and wellness, and resort and destination development divisions.

Quarterly revenue rose 13% to RM26.91 million from RM23.92 million.

Landmarks shares closed four sen higher at 98 sen yesterday, with a market capitalisation of RM518.31 million.

This article first appeared in The Edge Financial Daily, on May 25, 2017.

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