Management Discussion & Analysis 16 STRENGTH IN UNITY Construction revenue increased from US$12.6 million in 1H2023 to US$20.6 million in 1H2024 as the Group continues to execute projects that commenced in the second half of year 2023. Cost of sales increased correspondingly from US$12.7 million in 1H2023 to US$27.2 million in 1H2024. Rental income decreased by 4.6% from US$36.7 million in 1H2023 to US$35.0 million in 1H2024. This was mainly attributed to a drop in rental income from assets divested, offset by full six months rental income earned from assets completed in FY2023. Geographically, 92% of the Group’s revenue for 1H2024 was contributed from Greater China, Japan, South Korea, Southeast Asia, India and Australia and New Zealand; Europe and USA largely made up the remaining 8%. Post June 2024, the Group’s exposure to the U.S. will be nil, following the sale of ARA US Hospitality Trust management platform and units that was completed in July 2024 and the sale of ARA Private Funds which is expected to complete in second half of the year. 1H2024 Revenue by Region US$312 million 28% Greater China 16% Japan & South Korea 24% Australia & New Zealand 8% U.S. & Europe 24% India & SEA 1H2024 Revenue by Segment US$312 million 81% Fund Management 12% Investment 7% New Economy Development PATMI AND EBITDA16 EBITDA17 decreased by 104.1% from a profit of US$537.4 million in 1H2023 to a loss of US$22.2 million in 1H2024. PATMI18 decreased by 175.7% from a profit of US$289.0 million in 1H2023 to loss of US$218.7 million in 1H2024. These were driven by the following factors, namely non-cash adjustments and write-down tied to non-core divestments or near-term divestments, negative fair value movements and absence of promote fees in 1H2024. Other income and gains, net decreased from US$214.8 million in 1H2023 to US$8.4 million in 1H2024. The Group recorded a share of losses of US$7.3 million from the results of its joint ventures and associates in 1H2024 compared to a share of profits of US$78.4 million in 1H2023. The reductions were mainly due to non-cash items listed below: Loss tied to non-core divestments or near-term divestments • ARA US Hospitality Trust write-down: US$97.4 million arising from the divestment of the Group’s stake in ARA US Hospitality Trust manager and units, the agreement for which was entered into on 27 May 2024 and which was completed on 9 July 2024. The amount was accounted for as impairment loss of assets held for sale and is adjusted under Non-IFRS Measures for a like-for-like comparison with 1H2023 as this was the divestment of a non-core asset, to simplify and streamline the Group to focus on New Economy. • Share of associate’s fair value losses: approximately US$44.6 million estimated from the asset revaluation of Cromwell Property Group’s (“Cromwell”) Australia investment portfolio as well as the sale of Cromwell’s European fund management platform and associated co-investments, consistent with Cromwell’s commitment to simplify its business to transition to a capital-light funds management model. The effect of fair value losses which are non-cash in nature and divestment of non-core assets is adjusted under Non-IFRS Measures for a like-for-like comparison with 1H2023. Notes: 16. EBITDA, Adjusted EBITDA and Adjusted PATMI are non-IFRS measures. Refer to non-IFRS measures reconciliation in page 107 17. EBITDA is calculated as profit/(loss) before tax, adding back depreciation and amortisation and finance costs (net) 18. PATMI is profit/(loss) after tax and minority interests
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