Not for distribution, directly or indirectly, in or into the United States or any jurisdiction in
which such distribution would be unlawful.
Symphony International Holdings Limited
4 May 2016
Symphony International Holdings Limited ("Symphony", "SIHL" or the "Company") (LSE: SIHL.L), a
leading investor in consumer-related businesses, primarily in the healthcare, hospitality, lifestyle, and lifestyle/real estate
sectors in the Asia-Pacific region, today issues the following Shareholder Update.
Highlights
· Net Asset Value ("NAV") at 31 March 2016,
excluding dividends payable, was US$723,227,101 and NAV per share was US$1.3695. This compares to NAV and NAV per share at 31
December 2015 of US$695,590,436 and US$1.3172, respectively
· Including the accrual of dividends payable,
Symphony's NAV and NAV per share was US$683,247,482 at 31 March 2016 and NAV per share was US$1.2938. On a fully-diluted basis
(adjusting for in-the-money vested options), the NAV per share was US$1.2782 on the same date
· The change in NAV and NAV per share was
predominantly due to a strengthening of the Thai baht (2.5%), Singapore dollar (4.9%) and Malaysian ringgit (9.2%) during the
quarter
· Symphony's portfolio of investments continued to
expand during the quarter. Although there have been some economic headwinds across Asia, we are confident growing wealth and
consumerism in the region will continue to drive growth for our portfolio
· As of 31 March 2016, the sum of Symphony's
temporary investments (which includes cash net of working capital) and listed investments amounted to US$541.0 million, or
US$1.02 per share. Symphony's share price on the same date represents a discount of 28.7% to temporary and listed
investments.
Anil Thadani, Chairman of Symphony Asia Holdings Private Limited and a Director of Symphony,
said:
"Better sentiment and slowing capital outflows in emerging markets benefited currencies in the
region, which positively impacted our portfolio. Excluding dividends payable at the end of Q1 16, NAV increased by 4% during the
quarter. Although there will likely be continued instability in financial markets in the short and medium term, we expect our
portfolio companies to continue to benefit from growing consumerism in the region"
For further information:
Anil Thadani
+65 6536 6177
Symphony Asia Holdings Pte. Ltd.
About Symphony
Symphony is a London listed strategic investment company that invests in consumer businesses in
the healthcare, hospitality and lifestyle ("HH&L") sectors (including branded real estate developments), which are
principally in Asia. It offers a way for investors to gain exposure to the rising disposable incomes and wealth in fast growing
economies. Symphony's objective is to provide superior capital growth by investing in high quality companies and forming
long-term business partnerships with talented entrepreneurs. Symphony is managed by Symphony Asia Holdings Private Limited, which
has a team of investment professionals with a broad range of expertise - many of them have been working in Asia for more than 25
years. For more information, please visit our website at www.symphonyasia.com
MARKET OVERVIEW
During the first quarter of 2016, we continued to see volatility in the
financial markets that was driven by ongoing concerns over economic growth, particularly in emerging markets such as China.
Coordinated efforts by central banks and firmer oil and some commodity prices helped reverse much of the losses incurred by
equity markets during the beginning part of the quarter. However, geopolitical tensions and slowing emerging market growth has
heightened downside risks to the global economy.
Efforts by central banks in February 2016 provided much needed economic support that bolstered
financial markets. Specifically, the US deferred incremental interest rate increases, China cut its bank reserve requirement
ratio by 50bp and Indonesia continued its monetary easing policies. These actions and further expectations of easing improved
investor sentiment. Together with firmer oil and some commodity prices, capital outflows from emerging markets has slowed, which
has had a positive impact on currencies in Asia.
Despite policies to drive economic momentum, continued volatility and weaker growth is expected.
The Asian Development Bank ("ADB") forecast in March 2016 that economic growth will decline from 5.9% in 2015 to 5.7% in both
2016 and 2017. Southeast Asia however would see a slight increase from 4.4% in 2015 to 4.5% and 4.8%, respectively, in 2016 and
2017.
China is expected to suffer further economic declines from 6.9% in 2015 to 6.5% and 6.3%
respectively, in 2016 and 2017, and India to decline from 7.6% to 7.4% in 2016 but then rebound to 7.8% in 2017. The ADB noted
that risks to growth forecasts remain skewed towards the downside.
Despite slower forecast growth, we expect Symphony's portfolio investments to continue to expand
and benefit from growing wealth and consumerism in Asia. Symphony's listed investments that include MINT, IHH and PREIT continued
to build their respective portfolios during the first quarter of 2016. MINT announced new acquisitions in Europe and a hotel
development in Indonesia. In addition, PREIT acquired its 44th healthcare related property in Japan and IHH announced the ground
breaking for a new hospital in Myanmar.
Although facing headwinds given the weak economic climate, our unlisted operating businesses that
include C Larsen and the Wine Connection Group ("WCG") continued to focus on developing avenues to grow their businesses. C
Larsen is exploring additional franchised outlets of the Clinton Street Baking Company and WCG opened its first outlet in
Malaysia.
The development in Desaru is progressing and we continue to see increasing development and
interest in the areas where we hold our other land related investments. We believe growing demand for quality branded
developments and real estate in Asia will allow these types of investments to create long-term value.
Symphony continues to support the management teams of its portfolio companies and is currently
evaluating several opportunities to grow its portfolio.
COMPANY UPDATE
Symphony International Holdings Limited's ("Symphony" or the "Company") unaudited Net Asset Value
("NAV") at 31 March 2016, excluding dividends payable, was US$723,227,101 and NAV per share was US$1.3695. This compares to NAV
and NAV per share at 31 December 2015 of US$695,590,436 and US$1.3172, respectively. On this basis, the change in NAV and NAV per
share was predominantly due to a strengthening of the Thai baht (2.5%), Singapore dollar (4.9%) and Malaysian ringgit (9.2%)
during the quarter. Including the accrual of dividends payable, Symphony's NAV and NAV per share was 683,247,482 at 31 March 2016
and NAV per share was US$1.2938. On a fully-diluted basis (adjusting for in-the-money vested options), the NAV per share was
US$1.2782 on the same date.
Symphony's change in NAV per share (down 1.7%) outperformed the MSCI AC Asia (down 2.7%) and
underperformed the MSCI Singapore (down 0.4%), MSCI AC World (down 0.3%) and MSCI Thailand (up 10.9%) indices during
1Q16.
Symphony's listed investments accounted for 73.4% of NAV at 31 March 2016 up from 70.3% at 31
December 2015. The change is predominantly due to a strengthening in underlying currencies and marginal increases in the share
prices of Minor International Pcl ("MINT"), IHH Healthcare Berhad ("IHH"), and Parkway Life Real Estate Investment Trust
("PREIT") during the quarter. On a per share basis, the value of Symphony's listed investments stood at US$0.949. Unlisted
investments (including property) comprised a further 20.8% of Symphony's NAV (or US$0.269 per share), while the remaining 5.8% of
NAV (or US$0.075 per share) represented temporary investments.
Symphony's share price continued to trade at a discount to NAV in 1Q16. At 31 March 2016,
Symphony's share price was US$0.730, representing a discount to NAV per share of 43.6%.
As of 31 March 2016, the sum of Symphony's temporary investments (which includes cash net of
working capital) and listed investments amounted to US$541.0 million, or US$1.02 per share. Symphony's share price on the same
date represents a discount of 28.7% to temporary and listed investments.
PORTFOLIO DEVDELOPMENTS
Minor International Pcl ("MINT") is one of the largest hospitality
and restaurant companies in the Asia Pacific region. MINT owns 59 hotels and manages 79 other hotels and serviced suites with
17,714 rooms. In addition to owning hotels under the Four Seasons, St. Regis and Marriott brands, MINT owns and manages hotels in
22 countries under its own brand names that include Anantara, Oaks, Elewana, AVANI, Per AQUUM and Tivoli. MINT also owns and
operates 1,851 restaurants (comprising 957 equity-owned outlets and 894 franchised outlets) under brands that include The Pizza
Company, Swensen's, Sizzler, Dairy Queen, Burger King, Beijing Riverside, Thai Express, The Coffee Club, Veneziano Coffee
Roasters, and Breadtalk.
MINT's operations also include contract manufacturing and an international lifestyle consumer
brand distribution business at 307 retail points focusing on fashion, cosmetics, wholesale and direct marketing channels under
brands that include GAP, Esprit, Bossini, Red Earth and Henckels amongst others.
Update: MINT continued to see growth on a consolidated basis in 4Q15
year-over-year. Revenue, EBITDA, and net profit (excluding fair value adjustments) increased by 25%, 15%, and 11%, respectively,
during the period. Growth was attributable to the strong performance of MINT's restaurant and hotel & mixed-use
businesses.
MINT's hotel & mixed-use business grew revenues by 32% in 4Q15 year-over-year, driven by the
strong performance of Thailand hotels, additional revenues from recently acquired hotels, and sales of The Residences by Anantara
Layan in Phuket. In 4Q15, MINT announced the addition of a fifth Tivoli Group hotel in Portgual, the development of Anantara
Desaru Resort and AVANI Residences in Malaysia and Australia, respectively. During the first four months of 2016, MINT announced
the development of two Oaks hotels in India in Neemrana and Bodhgaya, the development of Anantara Ubud in Bali, and Anantara
Jebel Dhanna and Avani Jebel Dhanna in the UAE.
Mixed-use business, which includes property development operations and plaza and entertainment,
saw an overall increase in revenues in 4Q15. Property development revenue increased by 49% due to the sale of three villas in The
Residences by Anantara in Phuket, offset by a 10% decrease in plaza and entertainment revenue due to the decline of Russian
tourists to Thailand.
In 4Q15, MINT's total number of restaurants reached 1,851, representing an increase of 64 outlets
in 4Q15. 64% of the total restaurants are in Thailand with the remainder in other Asia-Pacific countries and the Middle East.
Total system sales in 4Q15 increased by 7.8% year-over-year primarily due to outlet expansion.
The fair value of Symphony's investment in MINT at 31 March 2016 was US$362.2 million, up from
US$361.9 million at 31 December 2015. The change is due to strengthening of the Thai baht by 2.5% and an increase in the share
price of MINT from THB36.00 to THB36.75 during the quarter, which was partially offset by the realisation by Symphony of 15.8
million MINT shares. The partial realisation of shares provided gross proceeds of approximately US$16.0 million.
Minuet Limited ("Minuet") is a joint venture between Symphony and an
established Thai partner. Symphony 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.
Update: The Company's investment cost (net of shareholder loan
repayments) was approximately US$60.9 million at 31 March 2016. The value
of Symphony's interest in Minuet at 31 March 2016 was US$82.5 million based on an independent third party valuation on 31
December 2015. The change in value from US$80.2 million at 31 December 2015 is predominantly due to an appreciation in the Thai
baht during the quarter.
Parkway Life Real Estate Investment Trust
("PREIT") invests in income generating healthcare-related properties in the Asia-Pacific region including
three of Parkway's Singapore hospitals, which are leased back to Parkway on long leases. Established by Parkway Holdings Limited,
PREIT is the largest listed healthcare REIT in Asia by asset size and generates an inflation-linked yield of around 4-5% based on
current valuations and historic distributions.
Update: PREIT reported an increase in gross revenue and net property
income by 8.6% and 8.5% to S$26.9 million and S$25.1 million, respectively, in Q1 16 year-over-year. The increase was due to
higher yielding properties from the asset recycling initiative in 2015, the appreciation of the Japanese yen and higher rent from
the Singapore properties.
Following the acquisition of a nursing home facility in March 2016 in Japan, PREIT's portfolio
increased to 48 properties. The portfolio includes 44 properties in Japan, three in Singapore and strata titled units/lots within
Gleneagles Medical Centre, Kuala Lumpur, Malaysia.
As at 31 March 2016, PREIT had a gearing ratio of 36.4%, which is well within the 60% limit
allowed under the Monetary Authority of Singapore Property Funds Guidelines and will allow for further yield accretive
acquisitions.
As at 31 March 2016, the fair value of Symphony's investment in PREIT was US$68.2 million,
compared to US$63.2 million at 31 December 2015. The change is due to a 4.9% strengthening of the Singapore dollar and an
increase in the share price from SGD $2.33 to SGD $2.39.
IHH Healthcare Berhad ("IHH") IHH
Healthcare Berhad ("IHH") is one of the largest healthcare providers in the world by market capitalisation. Its portfolio of
healthcare assets includes Parkway Holdings Limited, Pantai Holdings Berhad, International Medical University, Acibadem Saglik
Yatirimlari Holding A.S. ("Acibadem") and a minority shareholding in Apollo Hospitals Enterprises Limited. IHH has a broad
footprint of assets in Asia as well as Turkey, Abu Dhabi, Central and Eastern Europe that employ 25,000 people and operate close
to 10,000 licensed beds in 49 hospitals worldwide.
Update: IHH reported 4Q15 revenue and EBITDA growth of 18% and 5% to
MYR2.3 billion and MYR0.6 billion, respectively, compared to the same period a year earlier. The improvement in performance is
due to organic growth in IHH's existing hospitals and ramp up of its newer hospitals: Acibadem Atakent and Acibadem Taksim
Hospitals in Turkey and Pantai Manjung, Gleneagles Kota Kinabalu, and Gleneagles Medini in Malaysia. The consolidation of
Continental and Global Hospitals in India also contributed new revenue since their acquisitions.
Revenues at Parkway Pantai hospitals grew 22% in 4Q15 year-over-year to MYR1.4 billion, driven
partly by the continued ramp-up of Mount Elizabeth Novena Hospital in Singapore as well as a strong performance from existing
hospitals. In Q1 2016, IHH announced the groundbreaking of Parkway Yangon Hospital and the finalisation of the lease agreement
for ParkwayHealth Chengdu Hospital.
Acibadem's operations also grew with revenue increasing by 13% due to an increase in organic
growth at existing hospitals and the continued ramp up of Acibadem Atakent Hospital, which quadrupled EBITDA that was partially
offset by a 1.3% decline in the Turkish Lira against the Malaysian Ringgit.
IMU Health, the medical education arm of IHH, increased revenue by 8% during 4Q15, which was due
to higher tuition fees and lower marketing activities and maintenance.
At 31 March 2016, the fair value of Symphony's investment in IHH was US$71.0 million up from
US$64.1 million at 31 December 2015. The change is primarily due to a strengthening Malaysian ringgit of 9.2% and an increase in
the share price of IHH from MYR6.52 to MYR6.56.
Property Joint Venture in Malaysia: Symphony has a 49% interest in 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 is developing a beachfront country club and private villas on the south-eastern coast of Malaysia
that will be branded and managed by Amanresorts. The property is to commence operations in December 2016.
Update: Symphony invested US$29.0 million in January 2012 for its interest in the joint venture
company. Symphony's interest in the joint venture at 31 March 2016 was US$24.8 million, which compares to US$22.5 million at 31
December 2015. The change in value is predominantly due to a strengthening of the Malaysian ringgit by 9.2% during the
quarter.
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 Millenia Tower. The two buildings in SG Land's
portfolio have high occupancy rates and offer attractive rental yields. Symphony holds 49.9% of the venture.
Update: SG Land continues to generate stable performance from rental
income on its two office towers.
The value of SG Land at 31 March 2016 was US$13.4 million based on an independent third party
valuation at 31 December 2015. The change from US$12.8 million at 31 December 2015 is due to the appreciation of the Thai baht by
2.5% and an increase in cash not yet offset by the reduced term of the lease, which is used to derive fair value.
Property Joint Venture in Japan: Symphony invested in a property
development venture that has acquired two hotels in Niseko, Hokkaido, Japan. Symphony has a 37.5% interest in the property
development venture.
Update: The property is located in the Hirafu area of Niseko, which
continues to gain traction as a premium winter sports destination and for its popularity as an off-ski season activity
destination. The 2015/2016 ski season has seen strong visitor numbers to the area and new developments have had strong success.
The joint venture continues to evaluate its options with respect to the property site in order to maximise profits for its
shareholders.
Wine Connection Group ("WCG"): At the
end of April 2014, Symphony invested in the Wine Connection Group ("WCG"), Southeast Asia's leading wine themed Food and Beverage
chain with over 60 outlets in Singapore, Thailand and Malaysia.
Update: WCG continues to focus on expanding its business and opened its
first outlet in Malaysia during the first quarter of 2016. There have been strong headwinds in the food and beverage sector,
particularly in Thailand, which has impacted same-store-sales growth. We expect sentiment to gradually improve the overall market
environment.
Structured Transaction: In February
2014, Symphony completed a structured transaction, which provides a minimum return of 15% per annum. The investment amount is
less than 2% of NAV.
C Larsen Singapore Pte Limited ("C Larsen") is a luxury hospitality
company which primarily sells several high-end U.S. and European furniture brands and is based in Thailand. The current portfolio
of furniture brands includes Christian Liaigre, Barbara Barry, Baker, Thomasville, Herman Miller, Minotti, Bulthaup kitchens,
Puiforcat, and St. Louis. It also provides FF&E solutions to drive additional furniture sales to various real estate and
hotel projects. Recently, a new F&B business was added to the company under the brand of Clinton Street Baking
Company.
Update: C Larsen entered the F&B industry with the launch of
breakfast and lunch operations at its Clinton Street Baking Company franchise in Singapore, in October 2015. In February 2016,
the franchise commenced dinner service. Initial response has been promising and the company intends replicate this restaurant
concept in other Asian cities. In the furniture side of the business, the Company is in the process of developing new design
services targeted at high-end property developers and an enhance marketing strategy.
OUTLOOK
We remain confident growing wealth and consumerism in Asia will benefit Symphony's portfolio.
Symphony continues to support the management teams of its portfolio companies and continues to evaluate opportunities to expand
its portfolio.
IMPORTANT INFORMATION
A more detailed Shareholder Update is available on request from the Company and can be accessed
via www.symphonyasia.com.
This document is not for release, publication or distribution, in whole or in part, directly or
indirectly, in or into the United States or any other jurisdiction into which the publication or distribution would be unlawful.
These materials do not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities in the
United States or any other jurisdiction in which such offer or solicitation would be unlawful. THE securities referred to in this
document have not been and will not be registered under the securities laws of such jurisdictions and may not be sold, resold,
taken up, transferred, delivered or distributed, directly or indirectly, within such jurisdictions.
No representation or warranty is made by the Company or its Investment Manager as to the accuracy
or completeness of the information contained in this document and no liability will be accepted for any loss whatsoever arising
in connection with such information.
This Document contains (or may contain) certain forward-looking statements with respect to certain
of the Company's current expectations and projections about future events. These statements, which sometimes use words such as
"anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential", "should", "will" and "would" or the
negative of those terms or other comparable terminology, are based on the Company's beliefs, assumptions and expectations of its
future performance, taking into account all information currently available to it at the date of this document. These beliefs,
assumptions and expectations can change as a result of many possible events or factors, not all of which are known to the Company
at the date of this announcement or are within its control. If a change occurs, the Company's business, financial condition and
results of operations may vary materially from those expressed in its forward-looking statements. Neither the Company nor its
Investment Manager undertake to update any such forward looking statements
Statements contained in this DOCUMENT regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the future. The information contained in this document is subject
to change without notice and, except as required by applicable law, neither the Company nor THE INVESTMENT MANAGER assumes any
responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not
place undue reliance on forward-looking statements, which speak only as of the date of this announcement.
This document is for information purposes only and does not constitute an invitation or offer to
underwrite, subscribe for or otherwise acquire or dispose of any securities of the Company in any jurisdiction. All investments
are subject to risk. Past performance is no guarantee of future returns. Shareholders and prospective investors are advised to
seek expert legal, financial, tax and other professional advice before making any investment decisions.
This DOCUMENT is not an offer of securities for
sale into the United States. The Company's securities have not been, and will not be, registered under the United States
Securities Act of 1933 and may not be offered or sold in the United States absent registration or an exemption from registration.
There will be no public offer of securities in the United States.
Neither the content of the Company's website (or any other website) nor the content of any website
accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this
DOCUMENT.
The Company and the Investment Manager are not associated or affiliated with any other fund
managers whose names include "Symphony", including, without limitation, Symphony Financial Partners Co., Ltd.
End of Announcement