All of the FHL subsidiary companies were affected by the COVID-19, although some more affected than others given the nature of their businesses and the underlying strength of the entity. The FHL Group’s financial results for FY21 was largely influenced by the COVID-19 pandemic. The crises also exposed underlying vulnerabilities that must be addressed by the Group moving forward. Some of these issues include the need to improve the diversification of the investment portfolio and the need to critically review our investment policy and governance framework.
Against this backdrop, I present to the shareholders Group CEO’s report for the financial year ending June 2021.
Group Financial Performance
FHL Group recorded consolidated net loss after tax for FY21 of $17.60m compared to a net profit after tax of $6.04m for the same period last year. The Holding company, nevertheless reported a net profit after tax of $7.89m compared to $14.82m for FY20. The Group Net Assets fell by $21.77m largely driven by the consolidated loss closing the year at $266.14m compared to $287.91m for the same period last year. Total Assets for the Group also declined due the reduction in Property Plant and Equipment mainly coming from impairment of Life Cinema assets and reduction in loan book size of MFL mainly caused by restrictive lending, customer payouts and loan takeovers by commercial banks.During the year, management conducted detailed review of internal process for Basic Industries Pte Limited, Pacific Cement Pte Limited and Fiji Television Limited which has caused FHL Group Account Restatement for previous years. Adjustments were made as a result of stock losses as well as changes in accounting policy.
FHL Group Financial Statement has been prepared to include the Holding company results with the aim to provide greater information to shareholders on the performance of the parent entity. Significant part of the preparation of the accounts involves the valuation of share investments which requires that investments to be recorded at market values. Different methodologies were used in this revaluation exercise in accordance to the requirements of the IFRS standards.Major reduction were recorded in the valuations of FTV and RB Group for subsidiary companies while the Associate company of Golden Manufactures reported an increase of $8.56m to close at $18.56m for FY21. There was a notable drop in the valuation of recently acquired Ritam investments mainly due to the closure of the tourism sector, as well as recent share sale of the entity at a heavily discounted price which was the basis for FHL share valuation in Ritam Investments.
Whilst the FHL Balance sheet remains stable with a diversified portfolio, this can be further improved with investments that are sustainable and those that may require restructuring to optimise returns to its shareholders.