Operational Report of Subsidiary Companies



Fijian Holdings Shareholding: 50.75 %

The company’s total revenue including other income this year increased to almost $107 million. This is an increase of just over 3.6% and reflects the improving consumption spending in the local economy.Operating profit for the year before tax was $6.6 million compared to $5.9 million last year – an increase of 11.2% over the previous year. Profit after tax however remained almost the same. The construction works for the Cinema multiplex at our JetPoint complex was completed in June 2015 although the Cinemas have been operating since December 2014. The Cinemas have had a significant impact on the traffic at the complex and this is reflected in the increased activity at our JetPoint supermarket.

The Board is considering further developments of our current properties at JetPoint, HarbourPoint and the residential property in Suva, and will be finalising plans for these soon. We continue to search for new sites for stores keeping in mind that these should add value for our shareholders. The Board proposed a final interim dividend of 10 cents per share bringing the total dividend declared and paid for the year to 14 cents per share. This is the eighth consecutive year that the company has paid dividends at 14 cents per share. The company’s recent share price of just over $3.00 continues to reflect shareholder confidence: share price in June 2014 was $2.70 which is an increase of just over 11% during the year.


Fijian Holdings Shareholding: 100%

FHL Stockbrokers Limited, a wholly-owned subsidiary and the broking arm of Fijian Holdings Limited, maintained a positive result for the financial year ended 30th June 2015 with a NBPT of $2611.

During the year, the Company went through a restructure in light of the slow market activities and dense competition, but it endured its positive performance nonetheless.

The new financial year is expected to bring fresh challenges, however, FHLS is optimistic in maintaining positive results through other revenue streams such as support services to complement its main revenue driver.

Simultaneously, the outlook remains progressive for trading market and increased investor participation through FHLS as broker of choice.


Fijian Holdings Shareholding: 80.00 %

Merchant Finance has successfully ended Financial Year 2015 on yet another high note. Challenging conditions have continued with high liquidity, increased competition and subdued credit demand. These market conditions challenged all financial institutions on utilising surplus funds and getting a return on them.

Despite challenging conditions Merchant Finance recorded a pre- tax profit of $10.02 million for the year, compared to $9.8 million last year; a record up to that time. The company continued to meet prudential requirements set by the Reserve Bank of Fiji for licensed credit institutions and is well capitalized with a strong liquidity position.
Apart from delivering a record profit, Merchant Finance increased its human resource capacity building by providing staff members with the best training and education to carry out the roles they serve within the company.

Managers were encouraged to undertake Company Director Courses (facilitated Australian Institute of Company Directors) and staff members were also encouraged to pursue advanced academic qualifications to complement/develop their skills. Succession planning initiatives are in place to ensure the business thrives together with the proficiency of staff.

Being  a good corporate citizen, the company contributed to providing employment to the large pool of University graduates who are looking for employment. Graduate trainees and attachés now contribute to the services offered by the company Fiji wide. In addition, as part of our Corporate Social Responsibility, we raise awareness of community needs as well. Merchant Finance participated in Financial Inclusion initiatives by the Reserve Bank of Fiji, Asco Motors Trade Shows, visited the children at St. Christopher Home, facilitated a street Blind Appeal and hosted a breakfast for the Fiji Society for the Blind.

With new entrants intensifying competition in the Lending market, Merchant Finance has revised its Strategic Plan to continue offering exceptional service to customers. The company is looking forward to roll out new initiatives that will improve its competitive edge and satisfy evolving financial demands of customers.


Fijian Holdings Shareholding: 100%

The 2015 financial year was indeed very challenging for the team, however, the Company recorded a notable net profit after tax of $639,839 (2014: $684,616). During the year, the Company did not declare any dividends compared to the previous year of $500,000.

The performance of the company was mainly due to the finalisation of outstanding leasing agreements and increase in rental income compared to the previous year. The FHLP portfolio also undertook some major renovation works which has resulted in key tenants rolling over leasing agreements and improved occupancy. FHLP continues to find the increasing maintenance costs a challenge in this line of business.

During the year, FHLP managed to maintain an acceptable level of occupancy throughout all its property portfolio, however, the key challenge continues to be maintaining cost effective strategies to maintain the buildings whilst providing the highest standard of services to our valued tenants without impacting the return to shareholders.
The 2016 financial year is expected to be another challenging one as we will commence with a number of significant upgrading projects for all the buildings. We, however, remain positive with the projected economic outlook and with the progress of our new project, the new FHLP Tower located at Gordon Street opposite Ra Marama. We anticipate it to be an exciting year for the company.


Fijian Holdings Shareholding: 50.10%

During the financial year 2015, Pacific Cement Limited(PCL), formerly known as Fiji Industries Limited, underwent a company restructure. The company recorded total revenue of $31,576,161 million, a reduction of 8% compared   to FY14 as direct consequences of low sales through local activity and export volumes. The PBT was $1.49 million, which is a significant decrease representing a reduction of 8% compared to FY14. FY15 total cement sold was 126,457 MT compared to a budget of 135,000 tons, a reduction of 6%.

Moving forward, PCL will continue cost controls, be innovative in the production of cement and aggressively grow its business in the export market. PCL is a world class cement producer in the Pacific region and has geared up with a strong strategic plan to compete with the new competitor in the market, Tengy Cement.


Fijian Holdings Shareholding: 51.10 %

BIL recorded back-to-back growth performances for the financial years FY14 and FY15 following a negative result in FY13. This rebound in performance was brought about by recovery strategies put in place by the Board and Management, and by the significant improvement in the local construction industry.

In the past few years, a significant number of new competitors have entered the market increasing competition and diluting BIL’s market share. A number of these new entrants are overseas companies that operate on a totally different business strategy and cost structure to local companies and are also aligned to overseas construction companies and contractors that currently operate in Fiji.

Despite this change in the market landscape, BIL continues to maintain its long- term strategy of focusing on its core business(i.e. quarrying, ready- mix concrete and concrete products) and strengthening it through high quality products, efficient operations and processes, good people and excellent customer service. Continuous business growth is maintained through increasing market share and expanding into new market areas, particularly in exports.

The buoyant local construction market has had a positive impact on the BIL’s current business activities and forecasted growth for the next few years. Government’s significant capital investment into roads and infrastructure has been the main driver for the increased local construction activity, which in turn has initiated many private and commercial building and construction projects.

In order to capitalize on these favorable market conditions, BIL has embarked on a major capital investment program to increase production capacity and improve plant capability. Some of these investments include a new Pipe Making Machine for Suva, a Block Plant for Labasa, a Crushing Plant for Nadi, a fleet of brand new Concrete Mixer Trucks, a Concrete Boom Pump, a 50 tonne Crane and a number of loaders and excavators.

The Board, Management and Staff is focused on this target and are all fully aware that there has never been a better time and opportunity for the business to reach this milestone.


Fijian Holdings Shareholding: 60%

Life Cinema opened to the public in December 2014 and was welcomed by the Western community. Over this initial summer period we have had great success with the release of numerous blockbuster Hollywood and Bollywood films. We are the first cinema in Fiji to have installed Dolby Atmos sound system and are one of only select few to have it available in the South Pacific. The cinema is also bristling with the latest in digital cinema technology to ensure the best picture and sound experience for our audiences.

The loss for the year ended 30th June 2015 reflects the high one-off operational set up costs involved together wit service for mainstream and VIP customers are all ensuring a level of service never experienced by the people in h consultancies required when venturing into a new business.

We have seen continued growth in admissions as more and more people visit and experience the cinemas. Introduction of initiatives like Cheap Mondays & Tuesdays, Boys Night Out together with the introduction of a bar and food the West. We are currently improving the local knowledge to keep on increasing our admissions monthly.

With more exciting titles being released in the coming months, we are looking forward to lifting our performance to greater levels.We are proud to add another dimension in entertainment for visiting tourists and the local community. With our commitment to excellence in picture & sound quality and customer service, we are looking forward to a very successful year ahead.


Fijian Holdings Shareholding: 100%

The financial year 2015 provided many challenges for Basic Industries (PNG) Limited, formerly known as Pasifika Holdings Limited. During the year, management completed the relocation of its operations and the construction of a new fully-automated batching plant on the Baruni Land which was acquired in the previous financial year. This plant possesses a state of the art computerized control system to produce quality mixes for the market and environmentally friendly with minimum waste products and dust emissions. The plant was commissioned on June 25th 2015.

Through this, management are optimistic of re-positioning themselves to generate more revenue in the next financial year due to the upcoming development in Port Moresby and surrounding areas. Going forward, management continue to look for a strategic partner to improve its market penetration in line with its business growth strategies as well as further development of the 13 acre Baruni Land to boost its revenue stream and overall operations in PNG.


Fijian Holdings Shareholding: 100%

Financial Year 2015 produced strong growth in passenger numbers for our South Sea Cruises branded resort connection services & day cruise products operated throughout the Mamanuca group of Islands. Resort partner occupancies were mostly stronger than the prior year & we benefited from consistent product delivery throughout the year due to there not being any major resort closures or major weather events disrupting trading.

The new Sheraton Tokoriki Resort & Spa opened in June 2014 & is now trading with very good occupancy which is reflected in encouraging volumes of resort guest transfers. Our new vessel Cougar II which we took delivery of in September 2014 to enhance our Resort connection services has been operating to a high standard & has been well received by passengers & other stakeholders. Our Awesome Adventures Independent traveler & Backpacker market products operated throughout the Yasawa Islands traded slightly below prior year passenger numbers & this market remains challenging. Yields for the Blue Lagoon Cruises products operated aboard Fiji Princess have increased considerably during 2014/15 whilst also showing a slight occupancy improvement.

The refurbishment of Fiji Princess in April 2014 & itinerary changes made have been well received by the travel trade & passengers. Global marketing efforts for these products are beginning to produce good results with forward bookings being well above what was being achieved a year ago.

South Sea Cruises and Blue Lagoon Cruises achieved a combined total sales of $45.2m ($39.3m in 2014) for the year ended 30th June 2015 resulting in a net profit after tax of $5.3m ($1.6m in 2014). The outlook for the new financial year is very positive and without any adverse weather events, the company anticipates making a record profit.


Fijian Holdings Shareholdings: 100%

FHL Fund Management Limited, the Fund Manager for Fijian Holdings Unit Trust, recorded a total revenue of $2.11m, as compared to $1.49m for FY 2014. Concurrently FHL FML recorded a NBPT of $1.02m, an increase of 89%, the significant increase was due to an increase in positive sales by 67% as compared to the previous year.

Moving forward, FFML as the Fund Manager for Fijian Holdings Unit Trust (FHUT), will continue to explore viable investment opportunities for the Fund in the new financial year and is optimistic that the strategies that have been put in place will maximize competitive returns to our unit holders. In terms of accessibility, FFML is committed to ensuring that the FHUT product is accessible throughout the country as it continues to strengthen our marketing activities in the various divisions including the Northern and Western part of Fiji.


Fijian Holdings Shareholding– 61.60%

Fiji Television Limited commenced the financial year with major changes to its Sky Pacific Channel Line-up which came into effect in August 2014 with increase number of television channels to 24 channels for Sky Pacific viewers. These changes and additional benefit to Sky Pacific Subscribers were not well received which drew the attention of Consumer Council to negotiate and settle the concerns of our viewers. As a result, Fiji TV was forced to bring back some of the Channels offered by FOX International Channels (FIC) and the BBC Channel that were dropped from Sky Pacific’s bouquet of channels.

On a positive note, Fiji One News broke new grounds during the 2014 general election as we were able to provide live coverage from almost all key polling centers. This was after an investment of (FJD65,000) to purchase two live-view kits that was used extensively to cover news stories and enabled our reporters to speak to voters all across the country. The election coverage was about 6 hours daily in the week before polling and until the results were announced.

This was an added value opportunity for the Elections Office and political parties who used our platforms to engage with the voters. Our hardworking team was able to keep the viewers informed and at the same time maintaining its regulatory requirement and media ethics under the Media Industry Development Decree. In late August, Fiji TV saw some changes in its Board of Directors when it announced the resignation of two of Fiji TV’s Board members, Ulaiyasi Baya and Aseri Radrodro and the appointment of Isikeli Tuituku as a casual vacancy appointee.

In early October, Mr Iowane Naiveli and Mr Deepak Rathod were appointed as casual vacancy appointees. October 2014 was the most challenging and unpredictable month for Fiji TV when it couldn’t maximize its revenue due to the HSBC Sevens Series being one of the shared event under the Television Cross Carriage Decree 2014. At the same time, Fiji TV signed a Memorandum of Undertaking with Telikom PNG with regards to the possible divestment of Media Niugini Ltd, the PNG subsidiary of FTV. The 20th AGM was also held in October which confirmed its resolutions which were passed without objections.

December 2014 saw Fiji TV Board Member and Chairman, Padam Lala resigned and changes to key Management positions took place. Mr Geoffrey Smith was appointed Chief Executive Officer (Acting). Mr Deepak Rathod was confirmed as an Independent Director in January 2015. The sale and purchase agreement was signed with Telikom PNG Ltd for the sale of 100% of Media Niugini Ltd for PNG Kina 27 million. An Extraordinary General Meeting of FTV shareholders was held in March 2015 in which the resolutions were passed. March also saw the appointment of Mr Apakuki Kurusiga as Chairman of the Board.

April 2015 stole the crown when Fiji TV secured the Floyd Mayweather v Manny Pacquiao Fight, Scheduled 12 Round World Super Welterweight Championship Bout 2015. And June saw the existing television broadcast license extended by the Minister of Communication, for a further 12 years with effect from 1st July 2015. Thereafter, the company had a new organizational structure which was approved by the Board. The appointments were made in line with the future plans that the company envisages that will be driven by increase in local compelling content and new media and technologies.

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