REG - Symphony Int Hdgs - Interim Financial Results
01/09/2022 07:00
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RNS Number : 8398X Symphony International Holdings Ltd 01 September 2022
Not for Distribution, directly or indirectly, in or into the United States or
any jurisdiction in which such distribution would be unlawful.
1 September 2022
Symphony International Holdings Limited
Interim Financial Results for the six-month period ended 30 June 2022
Symphony International Holdings Limited ("SIHL", the "Company" or "Symphony")
announces the interim results for the six months ended 30 June 2022. The
condensed interim financial statements of the Company and its subsidiaries
have been prepared in accordance with IAS 34 Interim Financial Reporting and
have not been audited or reviewed by the auditors of the Company.
Introduction
The Company is an investment company initially incorporated as a limited
liability company under the laws of the British Virgin Islands on 5 January
2004. The Company voluntarily re-registered itself as a BVI Business Company
on 17 November 2006. The Company's investment objectives are to increase the
aggregate net asset value of the Company ("NAV") calculated in accordance with
the Company's policies through strategic longer-term investments in
consumer-related businesses, primarily in the healthcare, hospitality,
lifestyle (including branded real estate developments), logistics and
education sectors, and through investments in special situations and
structured transactions, which have the potential to generate attractive
returns and to enhance the NAV.
The Company was admitted to the Official List of the UK Listing Authority on 3
August 2007 under Chapter 14 of the UK Listing Rules and its securities were
admitted to trading on the London Stock Exchange's main market for listed
securities on the same date.
Symphony's Investment Manager is Symphony Asia Holdings Pte. Ltd. (the
"Investment Manager" or "SAHPL"). The Company has entered into an Investment
Management Agreement with the Investment Manager. SAHPL's licence for carrying
on fund management in Singapore is restricted to serving only accredited
investors and/or institutional investors. Symphony is an accredited investor.
As at 30 June 2022, the issued share capital of the Company was US$409.70
million (31 December 2021: US$409.70 million) consisting of 513,366,198 (31
December 2021: 513,366,198) ordinary shares.
Net Asset Value
Symphony's NAV is the sum of its cash and cash equivalents, temporary
investments, the fair value of unrealised investments (including investments
in subsidiaries, associates and joint ventures) and any other assets, less any
other liabilities. The unaudited financial statements contained herein may
not account for the fair value of certain unrealised investments.
Accordingly, Symphony's NAV may not be comparable to the net asset value in
the unaudited financial statements. The primary measure of SIHL's financial
performance and the performance of its subsidiaries will be the change in
Symphony's NAV per share resulting from changes in the fair value of
investments.
The NAV attributable to the ordinary shares on 30 June 2022 was US$0.94 (30
June 2021: US$0.83) per share. This represented a 1.24% decrease over the NAV
per share of US$0.95 at 31 December 2021. The change in NAV from 31 December
2021 to 30 June 2022 is due to a decrease in the value of unlisted
investments, predominantly due to a depreciation in Asian currencies relative
to the US dollar and weaker market valuation parameters used in the valuation
of investments, which was partially offset by an increase in the share price
of Minor International Public Company Limited.
Portfolio Overview
The following is an overview of the Company's portfolio as at 30 June 2022:
HOSPITALITY
Minor International Public Company Limited ("MINT") is a diversified consumer
business and is one of the largest hospitality and restaurant companies in the
Asia-Pacific region. Anil Thadani (a Director of the Company) currently serves
on MINT's board of directors. Sunil Chandiramani (a Director of the Company)
currently serves as an advisor to MINT's board of directors. MINT is a company
that is incorporated under the laws of Thailand and is listed on the Stock
Exchange of Thailand.
MINT is one of the largest hospitality and restaurant companies in the Asia
Pacific region. MINT is a hotel owner, operator and investor with a portfolio
of over 520 hotels under the Anantara, Avani, Oaks, Tivoli, NH Collection,
NH Hotels, nhow, Elewana, Marriott, Four Seasons, St. Regis, Radission Blu and
Minor International brands in 56 countries across Asia Pacific, the Middle
East, Africa, the Indian Ocean, Europe, South and North America. MINT is also
one of Asia's largest restaurant companies with over 2,400 outlets system-wide
in 23 countries under The Pizza Company, The Coffee Club, Benihana, Swensen's,
Sizzler, Dairy Queen, Burger King, Riverside, Thai Express, Coffee Journey and
Bonchon. MINT is one of Thailand's largest distributors of lifestyle brands,
with over 300 outlets, and contract manufacturers. Its brands include Anello,
BergHOFF, Bodum, Bossini, Charles & Keith, Esprit, Joseph Joseph, Radley,
Zwilling J.A. Henckels and Minor Smart Kids.
As at 30 June 2022, the Company's gross cost in MINT was approximately
US$82.82 million (31 December 2021: US$82.82 million). The net cost on the
same date, after deducting partial realisations and dividends received was
(US$233.57 million) (31 December 2021: (US$225.49 million)). The negative net
investment cost is due to the proceeds from partial realisations and dividends
being in excess of cost for this investment.
As at 30 June 2022, the market value of the Company's investment in MINT was
US$68.57 million (31 December 2021: US$67.97 million). The change in value
since 31 December 2021 is due to (i) the sale of 8.06 million shares that
generated net proceeds of US$8.07 million and (ii) a depreciation in the
onshore Thai baht rate by 5.83%, which was more than offset by an increase in
the share price of MINT by 18.42% during the same period. Subsequent to 30
June 2022, Symphony sold 1.0 million MINT shares that generated net proceeds
of US$0.94 million.
HEALTHCARE
ASG Hospital Private Limited ("ASG") is a full-service eye-healthcare
provider with operations in India, Africa, and Nepal. ASG was co-founded
in Rajasthan, India in 2005 by Dr. Arun Singhvi and Dr. Shilpi Gang. ASG's
operations have since grown to 46 clinics, which offer a full range of
eye-healthcare services, including outpatient consultation and a full suite of
inpatient procedures (cataract, retina surgeries, Lasik, glaucoma, cornea and
other complicated eye surgeries). ASG also operates an optical and pharmacy
business, which is located within clinics. Symphony invested in ASG in
tranches and held a 19.80% interest as at 30 June 2022.
Symphony's gross and net investment cost in ASG was US$20.67 million at 30
June 2022 (31 December 2021: US$20.67 million). The fair value of Symphony's
investment at 30 June 2022 was US$48.84 million (31 December 2021: US$24.72
million), which comprises US$17.28 million received from the sale of
securities subsequent to 30 June 2022 plus the value of the residual
securities that were not part of an arm's length transaction in the shares of
ASG. The change in value is the result of the transaction providing an
available market price for valuation purposes that is higher than derived from
using the comparable market multiple valuation methodology at 31 December
2021. Symphony's unconsolidated subsidiary which holds its investment in ASG
entered into an agreement on 6 July to sell 34.93% of its securities held in
ASG. On 18 August, the transaction completed and Symphony received after tax
proceeds of US$17.28 million, representing an annualised return of
approximately 38.06% on the securities sold in US dollar terms (using an
average cost method).
Soothe Healthcare Pvt. Ltd. ("Soothe") was founded in 2012 and operates within
the fast-growing consumer healthcare products market segment in India. With
growing disposable income, the demand for consumer healthcare products is
expected to grow rapidly over the coming decades. Soothe's core product
portfolio includes feminine hygiene and diaper products. Symphony completed
its equity investment in Soothe in August 2019 and became a significant
minority shareholder in the company. Symphony subsequently made investments
through convertible notes and securities in 2020, 2021 and 2022.
Symphony's gross and net investment cost in Soothe was US$12.75 million at 30
June 2022 (31 December 2021: US$8.88 million). The fair value of Symphony's
investment at 30 June 2022 was US$30.50 million, which compares to US$27.86
million at 31 December 2021. The change in value is predominantly due to an
increase in investment by US$3.87 million during the first half of 2022.
LIFESTYLE
The Liaigre Group ("Liaigre") was founded in 1985 in Paris and is a brand
synonymous with discreet luxury, and has become one of the most sought-after
luxury furniture brands, renowned for its minimalistic design style. Liaigre
has a strong intellectual property portfolio and provides a range of bespoke
furniture, lighting, fabric & leather, and accessories. In addition to
operating a network of 27 showrooms across Europe, the US and Asia, Liaigre
undertakes exclusive interior architecture projects for select yachts, hotels,
and restaurants and private residences.
Symphony's gross investment cost in Liaigre was US$79.68 million at 30 June
2022 (31 December 2021: US$79.68 million). The net cost on the same date,
after deducting partial realisations, was US$67.63 million (31 December 2021:
US$67.63 million). The fair value of Symphony's investment at 30 June 2022 was
US$37.04 million (31 December 2021: US$37.36 million). The change in fair
value is due to a depreciation in Euro by 7.79% and a decrease in the median
comparable market multiple used to value the business by 9.72%, which were
partially offset by a 17.22% increase in earnings before interest, tax,
depreciation and amortisation ("EBITDA") used to value the business for the
12-month period ended 30 June 2022 compared to the 12-month period ended 31
December 2021.
CHANINTR ("Chanintr") is a luxury lifestyle company, based in Thailand, which
primarily sells several high-end U.S. and European furniture and household
accessory brands. The current portfolio of furniture brands includes Christian
Liaigre, Barbara Barry, Baker, Herman Miller & Minotti. In addition,
Chanintr also sells Bulthaup kitchens, Puiforcat flatware, and St. Louis
crystal. It also provides Furniture, Fixtures & Equipment solutions for
various real estate and hotel projects. Chanintr also has the franchise to
operate the Clinton Street Baking Company F&B outlets in selected Asian
markets. In 2019, Chanintr launched a new program called Chanintr Residences
which will showcase custom-designed luxury residences as turnkey projects.
Wine Connection Group ("WCG") is Southeast Asia's leading wine themed Food
and Beverage chain with approximately 83 outlets in Singapore, Thailand and
Malaysia. Founded in 1998, WCG has developed an expertise in offering
affordable, high quality and exclusive wines from around the world through
owned F&B outlets. Symphony invested in WCG in 2014.
LIFESTYLE/REAL ESTATE
Minuet Ltd ("Minuet") is a joint venture between the Company and an
established Thai partner. The Company has a direct 49% interest in the venture
and is considering several development and/or sale options for the land owned
by Minuet, which is located in close proximity to central Bangkok, Thailand.
As at 30 June 2022, Minuet held approximately 186.75 rai (29.88 hectares) of
land in Bangkok, Thailand.
The Company initially invested approximately US$78.30 million by way of an
equity investment and interest-bearing shareholder loans. Since the initial
investment by the Company, Minuet has received proceeds from rental income and
partial land sales. As at 30 June 2022, the Company's investment cost (net of
shareholder loan repayments) was approximately US$13.13 million (31 December
2021: US$17.81 million). The fair value of the Company's interest in Minuet on
the same date was US$59.38 million (31 December 2021: US$69.81 million) based
on an independent third party valuation of the land plus the net value of the
other assets and liabilities of Minuet. The change in value of Symphony's
interest predominantly relates to the sale of land, which resulted in
distributions of US$4.68 million, a depreciation in the offshore Thai baht
rate by 6.30% and the termination of an agreement to sell a small parcel of
land at a higher price than a third party independent valuation.
SG Land Co. Ltd. ("SG Land") is a joint venture company that owns the
leasehold rights for two office buildings in downtown Bangkok - SG Tower and
Millennia Tower. The two buildings in SG Land's portfolio have high occupancy
rates and offer attractive rental yields. The Company holds a 49.9% interest
in the venture.
The value of SG Land as at 30 June 2022 was US$4.99 million (31 December 2021:
US$5.77 million) based on an independent third party valuation. The change in
value from 31 December 2021 is due to reduced cash on the balance sheet of SG
Land following distributions to shareholders, a reduction in the lease term
used to value the asset and a 6.30% depreciation in the offshore Thai baht
rate. Symphony received net distributions of US$0.79 million during the first
half of 2022.
Niseko Property Joint Venture ("Niseko JV") is a property development venture
that acquired land in Niseko, Hokkaido, Japan. Symphony has a 37.5% interest
in this venture, which it acquired for a total investment of US$10.2 million
and has to date received distributions of US$16.7 million that relate to the
partial sale of land held by the venture. The Niseko JV sold 31% of the
development site to Hanwha Hotels & Resorts with a further 39% to a new
joint venture company that is equally held and being co-developed by the
Niseko JV and Hanwha Hotels & Resorts. The Niseko JV continues to
effectively hold approximately 50% of the development site, of which one third
is held for future development and/or sale.
Desaru property joint venture in Malaysia ("Desaru") is a property joint
venture in Malaysia with an affiliate of Destination Resorts and Hotels Sdn
Bhd, a hotel and destination resort investment subsidiary of Khazanah Nasional
Berhad, the investment arm of the Government of Malaysia. The joint venture
has developed a beachfront resort with private villas for sale on the
south-eastern coast of Malaysia and that are branded and managed by
One&Only Resorts ("O&O"). The hotel operations were officially
launched in September 2020. The Company has a 49% equity interest in the joint
venture.
Symphony invested approximately US$58.78 million in the joint venture at 30
June 2022 (31 December 2021: US$58.78 million). The fair value for this
investment on the same date was US$28.27 million based on a discounted
cashflow model. This compares to US$28.96 million at 31 December 2021, which
was based on an independent third party valuation of the land plus the net
value of other assets and liabilities of the joint venture. The change in
valuation methodology was to account for the start of normalised hotel
operations (following the easing of Covid-19 related movement restrictions)
and initiation of marketing for the sale of branded residences.
Interest in Phuket Luxury Villa ("Phuket Villa"). Symphony held a one third
interest in a luxury villa in Phuket, Thailand. Together with an effective
cash payment, the Phuket Villa formed part of the settlement in June 2020 for
a structured loan transaction made by Symphony in 2014. The Villa was sold in
the fourth quarter of 2021. The overall annualised return and times money from
the structured loan transaction (including the villa sale) is 14.44% over a
period of approximately eight years and 1.94 times our cost, respectively.
EDUCATION
WCIB International Co. Ltd. ("WCIB") is a joint venture that developed and
operates Wellington College International Bangkok, the fifth international
addition to the Wellington College family of schools. WCIB operates a
co-educational school that will ultimately cater to over 1,500 students aged
2-18 years of age when all phases are fully complete. WCIB commenced
operations in August 2018 with inaugural students attending Nursery to Year 6.
Symphony initially invested in the joint venture in January 2017 and has made
periodic investments with its partners to facilitate ongoing development of
the school for more senior year intake and working capital requirements.
Creative Technology Solutions DMCC ("CTS") is a UAE-based company that
provides technology solutions to K12 schools in the UAE and the Kingdom of
Saudi Arabia ("KSA"). The company was founded in 2013 to provide customized IT
solutions to the education sector, including hardware, software and training.
Symphony made its investment in CTS in June 2019.
LOGISTICS
Indo Trans Logistics Corporation ("ITL") was founded in 2000 as a
freight-forwarding company and has since grown to become Vietnam's largest
independent integrated logistics company with a network that is spread across
Vietnam, Cambodia, Laos, Myanmar, and Thailand. ITL has grown to national
champion status in Vietnam.
The Company acquired a significant minority interest in ITL in June 2019 for
US$42.64 million and has a net cost of US$42.14 million (31 December 2021:
US$42.14 million). The fair value for Symphony's interest in ITL at 30 June
2022 was US$130.99 million, which is based on an arm's length transaction in
the shares of ITL that provides an available market price for valuation
purposes. This compares to a fair value of US$143.99 million at 31 December
2021, which was based on comparable company market multiples.
NEW ECONOMY
In November 2019, Symphony invested in Smarten Spaces Pte. Ltd ("Smarten"), a
Singapore based SaaS (Software-as-a-Service) company that provides software
solutions for space management in commercial and industrial properties.
Smarten was founded in 2017 by Dinesh Malkani and offers an end- to-end
solution for workplace safety and flexibility on a single technology platform,
to help businesses navigate the new hybrid workplace. The SaaS technology
includes four key aspects - Desk Management, Workforce Rostering, Demand &
Supply, Expenses & Chargeback, and Asset Management: bringing together key
workforce and workplace considerations for a future-ready solution.
In September 2020, Symphony invested in August Jewellery Private Limited
("Melorra"), a Bangalore based omni-channel fast fashion Indian jewellery
company that introduces a fresh collection of 75 new designs every Friday,
resulting in over 300 new designs per month. Founded by Saroja Yeramilli
in January 2015, Melorra adopts a minimal inventory model that uses 3-D
printing technology to achieve just-in-time manufacturing to bring products to
market efficiently. The company currently has 12 operational experience
centers across India.
Good Capital is majority owned by brothers Rohan and Arjun Malhotra who
founded Investopad in 2014 by investing their own capital into building
substantial infrastructure across India (Delhi, Bangalore and Gurgaon) and
creating a thriving ecosystem of technology startups. Symphony announced its
investment in July 2019, and has a stake in the General Partner, Good Capital
Partners ("GCP") and its first fund, Good Capital Fund I ("GCF").
In August 2021, Symphony invested in Catbus Infolabs Private Limited
("Blowhorn"), the owner of the Blowhorn platform. Blowhorn is a same-day
intra-city last-mile logistics provider headquartered in Bangalore, India. The
company provides seamless transportation, warehousing, and a fully
technologically integrated system to manage the end-to-end supply chain
process through an asset-light transportation and distributed
micro-warehousing network.
In September 2021, Symphony invested in Kieraya Furnishing Solutions Private
Limited ("Furlenco") a Bangalore based online residential furniture business.
Founded by Ajith Karimpana in October 2012, Furlenco has a subscription-based
furniture rental business; a refurbished & recycled furniture business;
an appliance subscription service and Prava, which sells high-end retail
furniture.
In September 2021, Symphony invested in Meesho Inc. ("Meesho"), a Bangalore
based social e-commerce platform for micro-entrepreneurs and Medium and Small
Enterprises ("MSME") to sell to the next 500 million Indians coming online.
Founded by Vidit Aatrey and Sanjeev Barnwal in March 2016, Meesho aims to
enable small businesses, including individual entrepreneurs, to succeed online
by bringing a range of products and new customers onto the Meesho platform.
Meesho started as a reseller-focused platform enabling millions to sell online
and has now become a single ecosystem connecting sellers to consumers and
entrepreneurs.
In September 2021, Symphony invested in SolarSquare Energy Private Limited
("Solar Square") a rooftop solar power company that focuses on residential
homes, primarily standalone houses, gated societies, and small commercial
centres. Solar Square was founded by Neeraj Jain and Nikhil Nahar in 2015;
they have since been joined by Shreya Mishra to refocus the company on the
consumer space. The company aims to make clean energy affordable and
accessible and become the trusted brand in the space.
Cash and cash equivalents
Symphony has placed funds in certain temporary investments. As at 30 June
2022, cash and cash equivalents amounted to US$9.91 million (31 December 2021:
US$8.36 million).
Outlook
There remains considerable uncertainty in financial markets due to high
inflation, geopolitical tensions including the war in Ukraine and Sino-US
relations, ongoing effects of Covid-19 and the more recent outbreak of
monkeypox. With interest rate increases to combat inflation by the US Federal
Reserve and other central banks, there is growing concern of recession as
global growth slows. While we believe our businesses will be affected by
global events in the short term, we remain cautiously optimistic that
Symphony's portfolio companies will continue to grow given sector
characteristics and concentration in faster growing developing countries in
Asia, such as India, Vietnam and Thailand.
Principal Risks
Some of the risks that the Company is exposed to are described below.
The Company's and the Company's investment management team's past performance
is not necessarily indicative of the Company's future performance and any
unrealised values of investments presented in this document may not be
realised in the future.
The Company is not structured as a typical private equity vehicle (it is
structured as a permanent capital vehicle), and thus may not have a comparable
investment strategy. The investment opportunities for the Company are more
likely to be as a long-term strategic partner in investments, which may be
less liquid, and which are less likely to increase in value in the short term.
The Company's organisational, ownership and investment structure may create
certain conflicts of interests (for example in respect of the directorships,
shareholdings or interests, including in portfolio companies that some of the
Directors and members of the Company's investment management team may have).
In addition, neither the Investment Manager nor any of its affiliates owes the
Company's shareholders any fiduciary duties under the Investment Management
Agreement between, inter alia, the Company and the Investment Manager. The
Company cannot assume that any of the foregoing will not result in a conflict
of interest that will have a material adverse effect on the business,
financial condition and results of operations.
The Company is highly dependent on the Investment Manager, the Key Persons (as
defined in the Investment Management Agreement) and the other members of the
Company's investment management team and the Company cannot assure
shareholders that it will have continued access to them or their undivided
attention, which could affect the Company's ability to achieve its investment
objectives.
The Investment Manager's remuneration is based on the Company's NAV (subject
to minimum and maximum amounts) and is payable even if the NAV does not
increase, which could create an incentive for the Investment Manager to
increase or maintain the NAV in the short term (rather than the long-term) to
the potential detriment of Shareholders.
The Company's investment policies contain no requirements for investment
diversification and its investments could therefore be concentrated in a
relatively small number of portfolio companies in the Healthcare, Hospitality,
Lifestyle (including branded real estate developments), logistics and
education sectors predominantly in Asia.
The Company has made, and may continue to make, investments in companies in
emerging markets, which exposes it to additional risks (including, but not
limited to, the possibility of exchange control regulations, political and
social instability, nationalisation or expropriation of assets, the imposition
of taxes, higher rates of inflation, difficulty in enforcing contractual
obligations, fewer investor protections and greater price volatility) not
typically associated with investing in companies that are based in developed
markets.
Furthermore, the Company has made, and may continue to make, investments in
portfolio companies that are susceptible to economic recessions or downturns.
Such economic recessions or downturns may also affect the Company's ability to
obtain funding for additional investments.
The Company's investments include investments in companies that it does not
control and/or made with other co-investors for financial or strategic
reasons. Such investments may involve risks not present in investments where
the Company has full control or where a third party is not involved. For
example, there may be a possibility that a co-investor may have financial
difficulties or become bankrupt or may at any time have economic or business
interests or goals which are inconsistent with those of the Company or may be
in a position to take or prevent actions in a manner inconsistent with the
Company's objectives. The Company may also be liable in certain circumstances
for the actions of a co-investor with which it is associated. In addition, the
Company holds a non-controlling interest in certain investments, and
therefore, may have a limited ability to protect its position in such
investments.
A number of the Company's investments are currently, and likely to continue to
be, illiquid and/ or may require a long-term commitment of capital. The
Company's investments may also be subject to legal and other restrictions on
resale. The illiquidity of these investments may make it difficult to sell
investments if the need arises.
The Company's real estate related investments may be subject to the risks
inherent in the ownership and operation of real estate businesses and assets.
A downturn in the real estate sector or a materialization of any of the risks
inherent in the real estate business and assets could materially adversely
affect the Company's real estate investments. The Company's portfolio
companies also anticipate selling a significant proportion of development
properties prior to completion. Any delay in the completion of these projects
may result in purchasers terminating off-plan sale agreements and claiming
refunds, damages and/or compensation.
The Company is exposed to foreign exchange risk when investments and/ or
transactions are denominated in currencies other than the U.S. dollar, which
could lead to significant changes in the net asset value that the Company
reports from one quarter to another.
The Company's investment policies and procedures (which incorporate the
Company's investment strategy) provide that the Investment Manager should
review the Company's investment policies and procedures on a regular basis
and, if necessary, propose changes to the Board when it believes that those
changes would further assist the Company in achieving its objective of
building a strong investment base and creating long term value for its
Shareholders. The decision to make any changes to the Company's investment
policy and strategy, material or otherwise, rests with the Board in
conjunction with the Investment Manager and Shareholders have no prior right
of approval for material changes to the Company's investment policy.
Investments in connection with special situations and structured transactions
typically have shorter operating histories, narrower product lines and smaller
market shares than larger businesses, which tend to render them more
vulnerable to competitors' actions and market conditions, as well as general
economic downturns. Investments that fall into this category tend to have
relatively short holding periods and entail little or no participation in the
board of the company in which such investments may be made. Special situations
and structured transactions in the form of fixed debt investments also carry
an additional risk that an increase in interest rates could decrease their
value.
The Company's current investment policies and procedures provide that it may
invest an amount of no more than 30% of its total assets in special situations
and structured transactions which, although they are not typical longer-term
investments, have the potential to generate attractive returns and enhance the
Company's net asset value. Following the Company's investment, it may be that
the proportion of its total assets invested in longer-term investments falls
below 70% and the proportion of its total assets invested in special
situations and structured transactions exceeds 30% due to changes in the
valuations of the assets, over which the Company has no control.
Pending the making of investments, the Company's capital will need to be
temporarily invested in liquid investments and managed by a third-party
investment manager of international repute or held on deposit with commercial
banks before they are invested. The returns that temporary investments are
expected to generate and the interest that the Company will earn on deposits
with commercial banks will be substantially lower than the returns that it
anticipates receiving from its longer-term investments or special situations
and structured transactions.
In addition, while the Company's temporary investments will be relatively
conservative compared to its longer-term investments or special situations and
structured transactions, they are nevertheless subject to the risks associated
with any investment, which could result in the loss of all or a portion of the
capital invested.
The Investment Manager has identified but has not yet contracted to make
further potential investments. The Company cannot guarantee shareholders that
any or all of these prospective investments will take place in the future.
The market price of the Company's shares may fluctuate significantly and
shareholders may not be able to resell their shares at or above the price at
which they purchased them.
The Company's shares are currently trading, and have in the past traded, and
could in the future trade, at a discount to NAV for a variety of reasons,
including due to market conditions. The only way for shareholders to realise
their investment is to sell their shares for cash. Accordingly, in the event
that a shareholder requires immediate liquidity, or otherwise seeks to realise
the value of his investment through a sale, the amount received by the
shareholder upon such sale may be less than the underlying NAV of the shares
sold.
The Company could be materially adversely affected by the widespread outbreak
of infectious disease or other public health crises (or by the fear or
imminent threat thereof), including the current COVID-19 pandemic. Public
health crises such as SARS, H1N1/09 flu, avian flu, Ebola, and the current
COVID-19 pandemic, together with any related containment or other remedial
measures undertaken or imposed, could have a material and adverse effect on
the Company including by (i) disrupting or otherwise materially adversely
affecting the human capital, business operations or financial resources of the
Company, the Company's portfolio companies, the Investment Manager or service
providers and (ii) adversely affect the ability, or the willingness, of a
party to perform its obligations under its contracts and lead to uncertainty
over whether such failure to perform (or delay in performing) might be excused
under so-called "material adverse change," force majeure and similar
provisions in such contracts that could cause a material impact to the
Company, the Company's portfolio companies, the Investment Manager or service
providers and (iii) severely disrupting global, national and/or regional
economies and financial markets and precipitating an economic downturn or
recession that could materially adversely affect the value and performance of
the Company's shares.
Our business could be materially affected by conditions in the global capital
markets and the economy generally. Geopolitical issues, including the recent
Russian invasion of Ukraine and related international response measures may
have a negative impact on regional and global economic conditions, as a result
of disruptions in foreign currency markets and increased energy and commodity
prices. This could in turn have a spill-over effect on our portfolio
companies, such as reducing demand for products or services offered by our
portfolio companies and/or cause for example, higher operating and financing
costs.
Directors' Responsibility Statement
We, the directors of Symphony International Holdings Limited, confirm that to
the best of our knowledge:
(a) the condensed interim financial statements, which have been prepared
in accordance with IAS 34 - Interim Financial Reporting, give a true and fair
view of the assets, liabilities, financial position and profit or loss of the
Company as required by DTR 4.2.4R; and
(b) the interim financial results include a fair review of information
required by:
(i) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the financial statements, and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
(ii) DTR 4.2.8R of the Disclosure and Transparency Rules, being related
party transactions that have taken place in the first six months of the
current financial year and that have materially affected the financial
position or performance of the Company during that period, and any changes in
the related party transactions described in the last annual report that could
do so.
For and on behalf of the Board of Directors
Georges Gagnebin
Chairman, Symphony International Holdings Limited
Anil Thadani
Chairman, Symphony Asia Holdings Pte. Ltd.
Director, Symphony International Holdings Limited
Symphony International Holdings Limited
Condensed statement of financial position
As at 30 June 2022
Note 30 June 31 December 2021
2022
US$'000 US$'000
Non-current assets
Financial assets at fair value through profit or loss 7 472,909 480,755
Prepayments * *
472,909 480,755
Current assets
Other receivables and prepayments 31 70
Cash and cash equivalents 9,915 8,357
9,946 8,427
Total assets 482,855 489,182
Equity attributable to equity holders
of the Company
Share capital 409,704 409,704
Accumulated profits 72,781 79,151
Total equity 482,485 488,855
Current liabilities
Other payables 370 327
Total liabilities 370 327
Total equity and liabilities 482,855 489,182
* Less than US$1,000
The accompanying notes form an integral part of these condensed interim
financial statements
Symphony International Holdings Limited
Condensed statement of comprehensive income
for the financial period from 1 January 2022 to 30 June 2022
Note 6 months ended 6 months ended
30 June 2022 30 June 2021
US$'000 US$'000
Other operating income 8,507 37,459
Other operating expenses (5,497) (3,141)
Management fees (5,404) (4,382)
(Loss)/ Profit before investment results and income tax (2,394) 29,936
Loss on disposal of financial assets at fair value through profit or loss - (37,461)
Fair value changes in financial assets at fair value through profit or loss 7 (3,991) 51,933
(Loss)/Profit before income tax (6,385) 44,408
Income tax expense - -
(Loss)/Profit for the period (6,385) 44,408
Other comprehensive income for the period, - -
net of tax
Total comprehensive income for the period (6,385) 44,408
Earnings per share:
US Cents US Cents
Basic 8 (1.24) 8.65
Diluted (1.24) 8.65
The accompanying notes form an integral part of these condensed interim
financial statements.
Symphony International Holdings Limited
Condensed statement of changes in equity
for the financial period from 1 January 2022 to 30 June 2022
Share Accumulated (losses)/profits Total
equity
capital
US$'000 US$'000 US$'000
At 1 January 2021 409,704 (30,645) 379,059
Total comprehensive income for the period
Profit for the period - 44,408 44,408
Total comprehensive income for the period - 44,408 44,408
Transactions with owners of the Company, recognised directly in equity
Contributions by and distributions to owners
Forfeiture of dividend paid in prior years - 160 160
Total transaction with owners of the Company - 160 160
At 30 June 2021 409,704 13,923 423,627
The accompanying notes form an integral part of these condensed interim financial statements.
Symphony International Holdings Limited
Condensed statement of changes in equity
for the financial period from 1 January 2022 to 30 June 2022
Share Accumulated Total
equity
capital profits
US$'000 US$'000 US$'000
At 1 January 2022 409,704 79,151 488,855
Total comprehensive income for the period
Loss for the period - (6,385) (6,385)
Total comprehensive income for the period - (6,385) (6,385)
Transactions with owners of the Company, recognised directly in equity
Contributions by and distributions to owners
Forfeiture of dividend paid in prior years - 15 15
Total transaction with owners of the Company - 15 15
At 30 June 2022 409,704 72,781 482,485
The accompanying notes form an integral part of these condensed interim
financial
statements.
Symphony International Holdings Limited
Condensed statement of cash flows
for the financial period from 1 January 2022 to 30 June 2022
6 months 6 months
ended
ended
30 June 2022
30 June 2021
US$'000 US$'000
Cash flows from operating activities
(Loss)/Profit before income tax (6,385) 44,408
Adjustments for:
Dividend income (8,505) (37,459)
Exchange loss 5,017 2,422
Interest income (2) -
Interest expense - 17
Write-off of amount due from unconsolidated subsidiary 12 -
Loss on disposal of financial assets at fair value through profit or loss - 37,461
Fair value changes in financial assets at fair value through profit or loss 3,991 (51,933)
(5,872) (5,084)
Changes in:
- Other receivables and prepayments 40 (5)
- Other payables 52 76
(5,780) (5,013)
Interest received * -
Net cash used in operating activities (5,780) (5,013)
Cash flows from investing activity
Net proceeds received from unconsolidated subsidiaries 7,326 31,897
Net cash from investing activity 7,326 31,897
Cash flows from financing activities
Interest paid - (18)
Forfeiture of dividend paid in prior years 15 160
Repayment of borrowings - (2,730)
Net cash from/(used in) financing activities 15 (2,588)
Net increase in cash and cash equivalents 1,561 24,296
Cash and cash equivalents at beginning of period 8,357 257
Effect of exchange rate fluctuations (3) 1
Cash and cash equivalents at end of the period 9,915 24,554
* Less than US$1,000
The accompanying notes form an integral part of these condensed interim
financial statements.
Symphony International Holdings Limited
Notes to the condensed interim financial statements
for the financial period from 1 January 2022 to 30 June 2022
These notes form an integral part of the condensed interim financial
statements.
1 REPORTING ENTITY
Symphony International Holdings Limited (the "Company") is a company domiciled
in the British Virgin Islands.
The financial statements of the Company as at and for the year ended 31
December 2021 are available upon request from the Company's registered office
at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola
VG1110 British Virgin Islands.
2 STATEMENT OF COMPLIANCE
These condensed interim financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting. They do not include all of the
information required for full annual financial statements, and should be read
in conjunction with the financial statements of the Company as at and for the
year ended 31 December 2021.
These condensed interim financial statements were approved by the Board of
Directors on 31 August 2022.
3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Company in these condensed interim
financial statements are the same as those applied by the Company in its
financial statements as at and for the year ended 31 December 2021. The
Company qualifies as an investment entity, as a result of which all immediate
investments are carried at fair value through profit or loss.
4 Estimates
The preparation of interim financial statements in conformity with
International Financial Reporting Standards requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these condensed interim financial statements, the significant
judgements made by management in applying the Company's accounting policies
and the key sources of estimation uncertainty were the same as those that
applied to the condensed financial statements as at and for the year ended 31
December 2021.
COVID-19 pandemic and ongoing Russian-Ukraine conflict
The COVID-19 pandemic and ongoing Russian-Ukraine conflict has increased the
estimation uncertainty in developing significant accounting estimates,
predominantly related to the valuation of financial assets at fair value
through profit or loss ("FVTPL").
The estimation uncertainty is associated with:
· the extent and duration of the expected economic downturn and
subsequent recovery. This includes the impacts on liquidity, increasing
unemployment, declines in consumer spending and forecasts for key economic
factors;
· the extent and duration of the disruption to business arising
from the containment measures by governments, businesses and consumers to
contain the spread of the virus;
· the extent and duration of supply chain disruptions as a result
of the war in Ukraine which also led to a jump in inflation and commodity
prices; and
· the effectiveness of government and central bank measures that
have and will be put in place to fight inflation and support businesses and
consumers through this disruption and economic downturn.
The Company has developed accounting estimates based on forecasts of economic
conditions which reflect expectations and assumptions as at 30 June 2022 about
future events that management believes are reasonable in the circumstances.
There is a considerable degree of judgement involved in preparing forecasts.
The underlying assumptions are also subject to uncertainties which are often
outside the control of the Company. Accordingly, actual economic conditions
are likely to be different from those forecast since anticipated events
frequently do not occur as expected, and the effect of those differences may
significantly impact accounting estimates included in these financial
statements.
The impact of the COVID-19 pandemic and ongoing Russian-Ukraine conflict on
financial assets at fair value through profit or loss is discussed further in
note 7.
5 financial risk management
The Company's financial risk management objectives and policies are consistent
with those disclosed in the financial statements as at and for the year ended
31 December 2021.
6 Financial assets at fair value through profit or loss
During the financial period ended on 30 June 2022:
i. The Company recognised a fair value loss in financial assets at
FVTPL of US$3,991,000 (30 June 2021: gain of US$51,933,000) and a loss on
disposal of financial assets at fair value through profit and loss of US$Nil
(30 June 2021: US$37,461,000).
ii. During the six-month period ended 30 June 2021, the Company's
wholly owned subsidiary, Symphony (Mint) Investment Limited, sold
approximately 8.06 million shares held in Minor International PCL in the
market through a series of transactions.
iii. On 16 February 2022, the Company's wholly owned subsidiary, Thai
Education Holdings Pte. Ltd., made an additional shareholder's loans to WCIB
International Co. Ltd. The associated cost for the investment was less than
1% of NAV.
iv. On 25 March 2022, the Company's partly owned subsidiary, Eagles
Holdings Pte. Ltd., subscribed to compulsory convertible debentures issued by
Kieraya Furnishing Solutions Private Limited. The associated cost for the
investment was less than 1% of NAV.
v. On 23 May 2022 and 31 May 2022, the Company's wholly owned
subsidiary, Britten Holdings Pte. Ltd., converted its convertible note into
Compulsory Convertible Preference Shares ("CCPS") and subscribed to additional
CCPS in Soothe Healthcare Private Limited respectively. The associated cost
for the additional investment was less than 1% of NAV.
vi. On 14 June 2022, the Company funded a capital call from Good Capital
Fund I as part of its commitment as an anchor investor. The capital call
amounted to less than 1% of the Company's NAV.
vii. On 14 June 2022, a wholly owned subsidiary of the Company, Haydn
Holdings Pte. Ltd, received principal shareholder loan repayments of US$4.68
million from Minuet Limited as a result of the sale of land.
7 financial instruments
Accounting classification and fair values
The carrying amounts and fair values of financial assets and financial
liabilities are as follows. It does not include fair value information for
financial assets and financial liabilities not measured at fair value if the
carrying amount is a reasonable approximation of fair value.
Carrying amount
Fair value through Amortised cost Other Total Fair value
profit or loss
financial liabilities
US$'000 US$'000 US$'000 US$'000 US$'000
30 June 2022
Financial assets measured at fair value
Financial assets at fair value through profit or loss 472,909 - - 472,909 472,909
Financial assets not measured at fair value
Other receivables(1) - 2 - 2
Cash and cash equivalents - 9,915 - 9,915
472,909 9,917 - 482,826
Financial liabilities not measured at fair value
Other payables - - (370) (370)
(1) Excludes prepayments
Carrying amount
Fair value through Amortised cost Other Total Fair value
profit or loss
financial liabilities
US$'000 US$'000 US$'000 US$'000 US$'000
31 December 2021
Financial assets measured at fair value
Financial assets at fair value through profit or loss 480,755 - - 480,755 480,755
Financial assets not measured at fair value
Other receivables(1) - 1 - 1
Cash and cash equivalents - 8,357 - 8,357
480,755 8,358 - 489,113
Financial liabilities not measured at fair value
Other payables - - (327) (327)
(1) Excludes prepayments
Fair value
The financial assets at fair value through profit or loss are measured using
the adjusted net asset value method, which is based on the fair value of the
underlying investments. The fair values of the underlying investments are
determined based on the following methods:
i) for quoted equity investments, based on quoted market bid prices at
the financial reporting date without any deduction for transaction costs;
ii) for unquoted investments, with reference to the enterprise value at
which the portfolio company could be sold in an orderly disposition over a
reasonable period of time between willing parties other than in a forced or
liquidation sale, and is determined by using valuation techniques such as (a)
market multiple approach that uses a specific financial or operational measure
that is believed to be customary in the relevant industry, (b) price of recent
investment, or offers for investment, for the portfolio company's securities,
(c) current value of publicly traded comparable companies, (d) comparable
recent arms' length transactions between knowledgeable parties, and (e)
discounted cash flows analysis; and
iii) for financial assets and liabilities with a maturity of less than one
year or which reprice frequently (including other receivables, cash and cash
equivalents, interest-bearing borrowings and other payables) the notional
amounts are assumed to approximate their fair values because of the short
period to maturity/repricing.
The objective of valuation techniques is to arrive at a fair value measurement
that reflects the price that would be received to sell the asset or paid to
transfer the liability in an orderly transaction between market participants
at the measurement date.
Fair value hierarchy for financial instruments
The table below analyses financial instruments carried at fair value, by
valuation method. The different levels have been defined as follows:
· Level 1: Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments.
· Level 2: Inputs other than quoted prices included within
Level 1 that are observable, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). This category includes instruments valued
using: quoted market prices in active markets for similar instruments;
quoted prices for identical or similar instruments in markets that are not
considered active; or other valuation techniques in which all significant
inputs are directly or indirectly observable from market data.
· Level 3: Inputs that are unobservable. This category
includes all instruments for which the valuation technique includes input not
based on observable data and the unobservable inputs have a significant effect
on the instruments' valuation. This category includes instruments that are
valued based on quoted prices for similar instruments but for which
significant unobservable adjustments or assumptions are required to reflect
differences between instruments.
Level 1 Level 2 Level 3 Total
US$'000 US$'000 US$'000 US$'000
30 June 2022
Financial assets at fair value through profit or loss - - 472,909 472,909
31 December 2021
Financial assets at fair value through profit or loss - - 480,755 480,755
The fair value hierarchy table excludes financial assets and financial
liabilities such as cash and cash equivalents, other receivables and payables
and interest-bearing borrowings because their carrying amounts approximate
their fair values due to their short-term period to maturity/repricing.
Level 3 valuations
The following table shows a reconciliation from the beginning balances to the
ending balances for fair value measurements in Level 3 of the fair value
hierarchy.
30 June 31 December 2021
2022
Financial assets at fair value through profit or loss
US$'000 US$'000
Balance at 1 January 480,755 381,949
Fair value changes in profit or loss (3,991) (45,094)
Net (repayment from)/payment to unconsolidated subsidiaries (3,855) 138,691
Net additions - 5,209
Balance at 30 June/31 December 472,909 480,755
Significant unobservable inputs used in measuring fair value
This table below sets out information about significant unobservable inputs
used at 30 June 2022 in measuring the underlying investments of the financial
assets categorised as Level 3 in the fair value hierarchy excluding
investments purchased during the year that are valued at transaction prices as
they are reasonable approximation of fair values and ultimate investments in
listed entities.
Description Fair value at 30 June Fair value at Valuation technique Unobservable input Range (Weighted average) Sensitivity to changes in significant unobservable
inputs
2022 31 December 2021
US$'000 US$'000
Rental properties 5,002 6,191 Income approach Rental growth rate 0-3% The estimated fair value would increase if the rental growth rate and
occupancy rate were higher and the discount rate was lower.
(Dec 2021: 0%-3%)
Occupancy rate 80%-90%
(Dec 2021: 80%-90%)
13%-13.5%
(Dec 2021: 13%-13.5%)
Discount rate
Description Fair value at 30 June Fair value at Valuation technique Unobservable input Range (Weighted average) Sensitivity to changes in significant unobservable
inputs
2022 31 December 2021
US$'000 US$'000
Land related investments 57,588 98,838 Comparable valuation method Price per US$372 to US$3,316 per square meter The estimated fair value would increase if the price per square meter was
square meter
(Dec 2021: US$27 to US$3,910 per square meter) higher.
for comparable land
Operating business 283,151 276,793 Enterprise value using comparable traded multiples, adjusted net asset value Earnings before interest, tax, depreciation and amortisation ("EBITDA") 0.9x - 296.4x, median 9.2x The estimated fair value would increase if the EBITDA multiple was higher.
or option pricing model multiple (times)
(Dec 2021: 2.4x - 155.8x, median 14.4x)
Revenue multiple (times) 2.7x - 11.3x, median 6.0x The estimated fair value would increase if the revenue multiple was higher
(Dec 2021: 2.9x - 23.3x, median 10.5x)
Discount for lack of marketability 25.0% The estimated fair value would increase if the discount for lack of
(Dec 2021: 25.0%) marketability was lower.
Volatility 39.0%-59.0% The estimated fair value would increase if volatility was higher.
(Dec 2021: 40.0%-63.0%)
Risk-free rate 3.0% - 6.7% The estimated fair value would increase if risk free rate was lower.
(Dec 2021: 1.3% - 6.5%)
Greenfield business held for more than 12-months 36,690 12,200 Discounted cash flow method Revenue growth 2.8% - 159.8% The estimated fair value would increase if the revenue growth increases,
(Dec 2021: 4.9% - 40%) expense ratio decreases, and WACC was lower.
Expense ratio 60.5% - 92.3%
(Dec 2021: 72.7% - 107%)
Weighted average cost of capital ("WACC") 13.9% - 14.70%
(Dec 2021: 12.5%)
The rental growth rate represents the growth in rental income during the
leasehold period while the occupancy rates represent the percentage of the
building that is expected to be occupied during the leasehold period.
Management adopt a valuation report produced by an independent valuer that
determines the rental growth rate and occupancy rate after considering the
current market conditions and comparable occupancy rates for similar buildings
in the same area.
The discount rate is related to the current yield on long-term government
bonds plus a risk premium to reflect the additional risk of investing in the
subject properties. Management adopt a valuation report produced by an
independent valuer that determines the discount based on the independent
valuer's judgement after considering current market rates.
The comparable recent sales represent the recent sales prices of properties
that are similar to the investee companies' properties, which are in the same
area. Management adopt a valuation report produced by an independent valuer
to determine the value per square meter based on the average recent sales
prices.
During the period ended 30 June 2022, an investment that was valued using
comparable recent sales was valued using the discounted cash flow method in
the current period due to changes in the operations and future earnings
potential of the underlying investee company.
The EBITDA multiple represents the amount that market participants would use
when pricing investments. The EBITDA multiple is selected from comparable
public companies with similar business as the underlying investment.
Management obtains the median EBITDA multiple from the comparable companies
and applies the multiple to the EBITDA of the underlying investment. In some
instances, Management obtains the lower quartile multiple from comparable
companies and applies the multiple to the EBITDA of the underlying investment.
The amount is further discounted for considerations such as lack of
marketability.
The revenue multiple represents the amount that market participants would use
when pricing investments. The revenue multiple is selected from comparable
public companies with similar business as the underlying investment.
Management obtains the median revenue multiple from the comparable companies
and applies the multiple to the revenue of the underlying investment. The
amount is further discounted for considerations such as lack of marketability.
The discount for lack of marketability represents the discount applied to the
comparable market multiples to reflect the illiquidity of the investee
relative to the comparable peer group. Management determines the discount
for lack of marketability based on its judgement after considering market
liquidity conditions and company-specific factors.
During the year ended 31 December 2021, two investments that were respectively
valued using the revenue multiple and adjusted net assets techniques in the
prior year were both valued using the EBITDA multiple in the current year due
to changes in the profitability of the underlying investee companies.
During the period ended 30 June 2022, two investments that were valued using
the EBITDA multiple technique were valued using the price of recent investment
for the investee company's securities in the current period as there were
recent transactions in the secondary market.
The option pricing model uses distribution allocation for each equity
instrument at different valuation breakpoints, taking into consideration the
different rights/terms of each instrument. An option pricing computation is
done using a Black Scholes Model at different valuation breakpoints (strikes)
using market volatility and risk-free rate parameters. Where a recent
transaction price for an identical or similar instrument is available, it is
used as the basis for fair value.
The revenue growth represents the growth in sales of the underlying business
and is based on the operating management team's judgement on the change of
various revenue drivers related to the business from year-to-year. The expense
ratio is based on the judgement of the operating management team after
evaluating the expense ratio of comparable businesses and is a key component
in deriving EBITDA and free cash flow for the greenfield business. The free
cashflow is discounted at the WACC to derive the enterprise value of the
greenfield business. Net debt is then deducted to arrive at an equity value
for the business. WACC is derived after adopting independent market quotes or
reputable published research-based inputs for the risk-free rate, market risk
premium, small cap premium and cost of debt.
The investment entity approach requires the presentation and fair value
measurement of immediate investments; the shares of intermediate holding
companies are not listed. However, ultimate investments in listed entities
amounting to US$68,572,000 (31 December 2021: US$67,972,000) are held through
intermediate holding companies; the value of these companies are mainly
determined by the fair values of the ultimate investments.
Sensitivity analysis
Although the Company believes that its estimates of fair value are
appropriate, the use of different methodologies or assumptions could lead to
different measurements of fair value. For fair value measurements in Level 3
assets, changing one or more of the assumptions used to reasonably possible
alternative assumptions would have the following effects on the profit or loss
by the amounts shown below. The effect of the COVID-19 pandemic and ongoing
Russian-Ukraine conflict has meant that the range of reasonably possible
changes is wider than in pre-pandemic and pre-conflict periods.
‹-------- 30 June 2022 --------› ‹-------- 30 June 2021 --------›
Effect on profit or loss Effect on profit or loss
Favourable (Unfavourable) Favourable (Unfavourable)
US$'000 US$'000 US$'000 US$'000
Level 3 assets 41,382 (44,402) 67,828 (57,105)
The favourable and unfavourable effects of using reasonably possible
alternative assumptions have been calculated by recalibrating the valuation
model using a range of different values.
For rental properties, the projected rental rates and occupancy levels were
increased by 10% (30 June 2021: 10%) for the favourable scenario and reduced
by 10% (30 June 2021: 10%) for the unfavourable scenario. The discount rate
used to calculate the present value of future cash flows was also decreased by
2% (30 June 2021: 2%) for the favourable case and increased by 2% (30 June
2021: 2%) for the unfavourable case compared to the discount rate used in the
valuation as at 30 June 2022.
For land related investments (except those held for less than 12-months where
cost represents the most reliable estimate of fair value in the absence of
significant developments since the transaction), which are valued on
comparable transaction basis by third party valuation consultants, the fair
value of the land is increased by 20% (30 June 2021: 20%) in the favourable
scenario and reduced by 20% (30 June 2021: 20%) in the unfavourable scenario.
For operating businesses (except those where a last transacted price exists
within the past 12-months that provides the basis for fair value) that are
valued on a trading comparable basis using enterprise value to revenue or
EBITDA, the revenue or EBITDA is increased by 20% (30 June 2021: 20%) and
decreased by 20% (30 June 2021: 20%) in the favourable and unfavourable
scenarios respectively. Similarly, where adjusted net assets are used, the
value is increased by N/A (30 June 2021: 20%) and decreased by N/A (30 June
2021: 20%) in the favourable and unfavourable scenarios.
For operating business (except those where a last transacted price exists
within the past 12-months that provides the basis for fair value) that are
valued using an option pricing model, the volatility is increased by 10% (30
June 2021: 10%) and the risk-free rate is reduced by 2% (30 June 2021: 2%) in
the favourable scenario. The volatility is reduced by 10% (30 June 2021: 10%)
and the risk-free rate is increased by 2% (30 June 2021: 2%) in the
unfavourable scenario.
For greenfield businesses (except those where a last transacted price exists
within the past 12-months) that are valued using a discounted cashflow, the
revenue growth rate is increased by 2% (30 June 2021: 2%), the expense ratio
rate is decreased by 10% (30 June 2021: 10%) and the WACC is reduced by 2% (30
June 2021: 2%) in the favourable scenario. Conversely, in the unfavourable
scenario, the revenue growth rate is reduced by 2% (30 June 2021: 2%), the
expense ratio rate is increased by 10% (30 June 2021: 10%) and the WACC is
increased by 2% (30 June 2021: 2%).
8 earnings PER SHARE
6 months ended 6 months ended
30 June 2022 30 June 2021
US$'000 US$'000
Basic and diluted earnings per share are based on:
(Loss)/Profit for the period attributable to ordinary shareholders (6,385) 44,408
Basic and diluted earnings per share
Number Number
of shares
of shares
30 June 2022 30 June 2021
Issued ordinary shares at 1 January and 30 June 513,366,198 513,366,198
Weighted average number of shares (basic and diluted) 513,366,198 513,366,198
At 30 June 2022 and 30 June 2021, there were no outstanding share options to
subscribe for ordinary shares of no par value.
9 Operating segments
The Company has investment segments, as described below. Investment segments
are reported to the Board of Directors of Symphony Asia Holdings Pte. Ltd.,
the Investment Manager, who review this information on a regular basis.
For the 6 months period ending 30 June 2022, the Company has renamed its
'Other' segment as 'New Economy'.
Segment results, assets and liabilities include items directly attributable to
a segment as well as those that can be allocated on a reasonable basis.
Business activities which do not meet the definition of an operating segment
have been reported in the reconciliations of total reportable segment amounts
to the financial statements.
The following summary describes the investments in each of the Company's
reportable segments.
Healthcare Includes investments in ASG Hospital Private Limited (ASG) and Soothe
Healthcare Private Limited (Soothe)
Hospitality Minor International Public Company Limited (MINT)
Education Includes investments in WCIB International Co. Ltd. (WCIB) and Creative
Technology Solutions DMCC (CTS)
Lifestyle Includes investments in Chanintr Living Ltd. (Chanintr), the Wine Connection
Group (WCG) and Liaigre Group (Liaigre)
Lifestyle/Real Estate Includes investments in Minuet Ltd., SG Land Co. Ltd., a property joint
venture in Niseko, Hokkaido, Japan, Desaru Peace Holdings Sdn Bhd and a villa
in Phuket, Thailand
Logistics In Do Trans Logistics Corporation (ITL)
Includes Smarten Spaces Pte. Ltd. (Smarten), Good Capital Partners and Good
Capital Fund I (collectively, Good Capital), August Jewellery Pvt. Ltd
New Economy (Melorra), Kieraya Furnishing Solutions Private Limited (Furlenco), Catbus
Infolabs Pvt. Ltd (Blowhorn), Meesho Inc. (Meesho), SolarSquare Energy Pvt
Limited (Solar Square) and Epic Games
Cash and temporary investments Includes government securities or other investment grade securities, liquid
investments which are managed by third party investment managers of
international repute, and deposits placed with commercial banks
The reportable operating segments derive their revenue primarily by achieving
returns, consisting of dividend income, interest income and appreciation in
fair value. The Company does not monitor the performance of the investments
by measure of profit or loss.
Information regarding the results of each reportable segment is included
below:
Healthcare Hospitality Education Lifestyle Lifestyle/ real estate Logistics Cash and temporary investments New Economy Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
6 months ended 30 June 2022
Investment income
- Dividend income - - - - 7,495 - 1,010 - 8,505
- Interest income - - - - - - 2 - 2
- - - - 7,495 - 1,012 - 8,507
Investment expenses
- Exchange loss (3) * (3) (3,263) (1,757) (1) 15 (5) (5,017)
- Fair value changes of financial assets at FVTPL 22,847 8,652 (6,162) (4,901) (14,721) (12,999) (1,011) 4,304 (3,991)
22,844 8,652 (6,165) (8,164) (16,478) (13,000) (996) 4,299 (9,008)
Net investment results 22,844 8,652 (6,165) (8,164) (8,983) (13,000) 16 4,299 (501)
6 months ended 30 June 2021
Investment income
- Dividend income 37,459 - - - - - - - 37,459
- Interest income - - - - - - * - *
- Fair value changes in financial assets at FVTPL 3,471 14,155 3,105 6,383 (8,781) 34,214 (15) (599) 51,933
40,930 14,155 3,105 6,383 (8,781) 34,214 (15) (599) 89,392
Investment expenses
- Exchange loss (1) * (1) (1,322) (1,109) (1) 13 (1) (2,422)
- Loss on disposal of financial assets at FVTPL (37,461) - - - - - - - (37,461)
(37,462) * (1) (1,322) (1,109) (1) 13 (1) (39,883)
Net investment results 3,468 14,155 3,104 5,061 (9,890) 34,213 (2) (600) 49,509
* Less than US$1,000
Healthcare Hospitality Education Lifestyle Lifestyle/ real estate Logistics Cash and temporary investments New Economy Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
30 June 2022
Segment assets 79,679 69,065 11,240 45,277 90,861 130,995 9,915 45,792 482,824
Segment liabilities - - - - - - - - -
31 December 2021
Segment assets 52,830 68,487 16,765 53,415 105,029 143,989 8,366 40,231 489,112
Segment liabilities - - - - - - - - -
Reconciliations of reportable segment profit or loss, assets and liabilities
30 June 30 June
2022 2021
US$'000 US$'000
Profit or loss
Net investments results (501) 49,509
Unallocated amounts:
- Other corporate expenses (5,884) (5,101)
(Loss)/Profit for the period (6,385) 44,408
Assets
Total assets for reportable segments 482,824 424,110
Other assets 31 79
Total assets 482,855 424,189
Liabilities
Total liabilities for reportable segments - -
Other payables 370 562
Total liabilities 370 562
10 Significant Related Party Transactions
For the purposes of these condensed interim financial statements, parties are
considered to be related to the Company if the Company has the ability,
directly or indirectly, to control the party or exercise significant influence
over the party in making financial and operating decisions, or vice versa, or
where the Company and the party are subject to common control or common
significant influence. Related parties may be individuals or entities.
Dividend income
During the financial period ended 30 June 2022, the Company recognised
dividend income from its unconsolidated subsidiaries amounting to US$8,505,000
(30 June 2021: US$37,459,000).
Key management personnel compensation
Key management personnel of the Company are those persons having the authority
and responsibility for planning, directing and controlling the activities of
the Company. The directors of the Company are considered as key management
personnel.
During the financial period ended 30 June 2022, directors' fees amounting to
US$198,000 (30 June 2021: US$198,000) were declared as payable to four
directors of the Company. The remaining two directors of the Company are
also directors of the Investment Manager who provides management and
administrative services to the Company on an exclusive and discretionary
basis. No remuneration has been paid to these two directors as the cost of
their services form part of the Investment Manager's remuneration.
Other related party transactions
Pursuant to the Investment Management Agreement, the Investment Manager will
provide investment management and advisory services exclusively to the
Company. Details of the remuneration of the Investment Manager are disclosed
in the financial statements as at and for the year ended 31 December 2021.
During the financial period ended 30 June 2022, management fee amounting to
US$5,404,000 (30 June 2021: US$4,382,000) paid/payable to the Investment
Manager has been recognised in the condensed interim financial statements.
Other than as disclosed elsewhere in the condensed interim financial
statements, there were no other significant related party transactions during
the 6 months periods ended 30 June 2022 and 30 June 2021.
11 commitments
In September 2008, the Company entered into a loan agreement with a joint
venture, held via its unconsolidated subsidiary, to grant loans totalling
US$3,966,000 (THB140,000,000). As at 30 June 2022, US$3,399,000 (THB
120,000,000) (30 June 2021: US$3,700,000 (THB120,000,000)) has been drawn
down. The Company is committed to grant the remaining loan amounting to
US$567,000 (THB20,000,000) (30 June 2021: US$620,000 (THB20,000,000)), subject
to terms set out in the agreement.
In July 2019, the Company committed to subscribe to Good Capital Fund I for an
amount less than 1% of the net asset value as at 30 June 2022. Approximately
59% of this commitment has been funded at 30 June 2022 with 41% of the
commitment subject to be called over the next two years.
In the general interests of the Company and its unconsolidated subsidiaries,
it is the Company's current policy to provide such financial and other support
to its group of companies to enable them to continue to trade and to meet
liabilities as they fall due.
12 Subsequent events
Subsequent to 30 June 2022,
· Symphony sold approximately 1.0 million MINT shares through a series
of market transactions that generated net proceeds of approximately US$0.94
million.
· Symphony completed the sale of approximately 35% of its securities
held in ASG Hospital Private Limited for an after-tax consideration of US$17.3
million.
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