FINANCE COMMITTEE OVERVIEW OF FINANCIAL PERFORMANCE 2020 was a challenging year for the Club as the impact from COVID-19 pandemic took its toll. As the pandemic escalates, the nation went into a lockdown from April 2020 to May 2020. During this period, our members were restricted from utilising the Club’s facilities and services. As a show of solidarity with our members who are also facing one of the worst economic crisis in history, Management Committee made an unprecedented decision to waive the subscription fees, section fees and F&B Levy for a period of two months at the peak of the pandemic. Reported by: MR JONATHAN KUAH Chairman
Even when Singapore exited the circuit breaker and entered into “safe reopening” (Phase 1), with tight regulatory restrictions meant that the Club was unable to reopen fully. In view of this, the Club’s Management with the approval from Management Committee, decided to extend the waiver of F&B levy until end of December 2020.
With the expected reduction in revenues, we took immediate action to reduce cost and delayed all unnecessary and non-urgent capital expenditures. Despite the loss of revenue, the Club managed to end the year with Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) surplus of $2.48M, representing a decline of 27% over last year and just 4% lower than budgeted EBITDA of $2.6M. Net loss for the year was $669k compared to $128k surplus previously, but a free cashflow surplus amounting to $2.1M was achieved. The following are highlights of the performance of various sections in FY2020: 1. Membership Fees • Subscription Fees (main source of revenue for the Club): Subscription revenues totaled $6.3M, a $1.23M decline compared to FY2019. This was due to the subscription waiver of two months given to members in the months of April and May 2020. • Entrance & Conversion Fees: Total revenue collected from entrance and conversion fees was $281k compared to $302k in 2019. This represented a $20k or 7% decline over FY2019. • Transfer Fees: A total of 151 membership transfers to third parties were transacted in FY2020. This represented a reduction of 6 cases compared to the previous year and thus resulting in a $43k reduction in transfer fees collected. 2. Rental Income Rental Income was badly affected by the pandemic. Rental income declined by 52% to $405k.
Lower rental income was due to the mandatory four months rental relief offered to the Tenants. However, it was partially offset by the $48k cash grant received from the authorities to cover the decline in rents and also from property tax waiver amounting to $490k.
3. Interest Income Due to the ongoing land lease renewal discussion with the authorities, the Club needs to maintain adequate cash reserves in case of any lease top-up. Therefore, surplus funds from operation during the financial year has been channeled into short term Fixed Deposits instead of investing in Bonds. Due to the lower interest rates of the Fixed Deposits, total interest income declined by 4% from $459k to $441k. However, interest received from the existing Bond portfolio increased by $6k or 2% to $276k and now makes up 63% of total interest income. Fixed Deposit interest income declined by $25k or 13% versus FY2019’s $188k.
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ANNUAL REPORT 2020
