Chairman's Message

Dear Shareholders,

On behalf of the Board of Directors of IPC Corporation Ltd (“IPC” or "the Group”), I am pleased to present our annual report for the financial year ended 31 December 2021 (“FY2021”).

We are now into the third year of the COVID-19 pandemic, which continues to upend lives, businesses and leaving many economies battered. The global economy in 2021 was recovering from the low base in 2020 due to the support from governments and central banks worldwide. However, recovery remains uneven across countries and sectors, especially in hardest-hit sectors such as hospitality. Travel restrictions continue to be prevalent for the majority of 2021, with the rapid spread of COVID-19 variants such as Delta & Omicron have disrupted the possibility of mass travel. Subsequently, the Group’s financial performance remained subdued in FY2021 over the pandemic’s persistent effect.

Financial Review

For FY2021, the Group reported revenue of S$4.170 million compared to S$5.412 million for FY2020, a decrease of 22.9%. The decrease was mainly due to a reduction in revenue from the sale of properties from FY2020 of S$3.516 million to S$1.757 million in FY2021. However, an increase of 26.7% in hotel management revenue from FY2020 of S$1.896 million to FY2021 of S$2.402 million has resulted in the Group’s gross loss to decrease to S$ 0.518 million in FY2021 as compared to FY2020 of S$1.070 million. During the period under review, the Group reported other losses of S$4.055 million for FY2021 compared to losses of S$23.248 million for FY2020. This were largely due to a reduction in fair value loss on financial assets from S$18.568 million to S$2.986 million for FY2020 and FY2021 respectively, and a decrease in the write-down on properties developed for sale of S$4.288 million in FY2020 compared to S$0.385 million in FY2021.

Consequently, the Group reported a 68.9% decrease in net operating loss after tax of S$8.848 million for the year as compared to S$28.429 million in FY2020.

Hospitality Business in Japan

NHJC, in which IPC has a convertible preference shares investment, is in the business of hotel management, operation and investment in Japan. In the year under review, despite the ongoing pandemic, NHJC opened two new hotels as part of pre-commitments by the hotel owners. In April 2021, the Group opened Nest Hotel Naha Kumoji, a 120-room hotel located in the centre of Naha City, Okinawa. It is designed to provide the atmosphere of a tropical resort stay for leisure travellers.

Within the same month, NHJC also opened Bespoke Hotel Sapporo, a 125-room hotel located in Hokkaido. The hotel encompasses sleek minimalism and Scandinavian interiors to present a refined space to stay. It also employs a smart check-in system which was implemented in April 2021 to speed up the process and reduce risk of infection exposure. This system is now in usage within all the hotels under NHJC for the customers’ safety and convenience. On 15 March 2022, one hotel in the pipeline that was delayed due to the pandemic opened. The hotel, Nest Hotel Naha Nishi (West) in Okinawa has 143 rooms and is within 10 minutes proximity to the Naminoue beach and Asahibashi urban monorail.

The total number of hotels under NHJC’s management was reduced from 18 to 17 due to the closure of Nest HOTEL naha, Okinawa because of the expiration of the fixed-term lease agreement. There was a cash injection of JPY172.5 million into NHJC on 31 January 2022 from existing shareholders excluding IPC as it has chosen to not participate in this latest round of recapitalisation. As a result, the preference shares of NHJC held by the Group has been reduced from approximately 42.8% to around 37.3% when converted to common shares.

In 2021, Tokyo hosted the Summer Olympics 2020 after it was postponed for a year due to the pandemic outbreak. However, due to a state of emergency which ran throughout the event, the Olympics was held without spectators. While this has proven to be another blow to the hospitality sector in need of a positive catalyst, this decision was essential to contain the spread of the highly contagious Delta COVID-19 variant from spreading.

Japan has also banned foreign nationals from entering Japan until the end of February 2022, to safeguard against the new variants. The domestic travel campaign "Go To Travel”, which cuts the cost of local accommodation and travel packages for residents in Japan has also been suspended due to the state of the COVID-19 infections without a clear restart date.

Due to the ever-changing COVID-19 situation and restrictions, we are unable to accurately predict a recovery of business to pre-covid levels.

Hospitality Business in China

The performance in China in 2021 as compared to 2020 has improved due to some recovery of domestic travel. However, with sporadic spike of new infections, China continues to impose border restrictions and coupled with a strict "zero COVID-19” policy, recovery of China’s travel industry is unlikely to recover to pre-COVID levels in the foreseeable future.

Notwithstanding the improved operating performance of Grand nest HOTEL zhuhai in the 3rd quarter of 2021 as compared with the same period of 2020, the last quarter of FY2021 was hit by the re-emergence of COVID-19 cases in different parts of China. Consequently, reservations on MICE events at the Group’s facilities were cancelled.

In the beginning of 2022, due to COVID-19 positive cases in Zhongshan, a neighbouring city of Zhuhai, and NanPing district of Zhuhai, officials in the Guangdong Province have imposed tightened restrictions on Zhuhai1 . These restrictions came two weeks before the Chinese New Year, and has already affected the Group’s business in Zhuhai, the Grand nest HOTEL zhuhai due to the cancellation of hotel reservations and MICE events.

With a new COVID-19 variant "Omicron” that is more infectious and easily spread, many parts of China including Zhuhai are facing the spread of the new variant and the Group expects another challenging year for the business of Grand nest HOTEL zhuhai due to strict social distancing and lockdown measures in China, particularly in the 1st half of FY2022.

Looking Ahead

The pandemic has taken a hold on our business and its investment in Japan, but the ongoing spike of infections from Omicron has put a damper on the recovery effects for the near future until travel is safer and widespread.

The Group will stay focused on mitigating the negative impact resulting from the pandemic on its operations and business through prudent management of costs and keeping the hotels ready for the eventual recovery.


In view of the challenging operating environment, all the directors have voluntarily taken a 20% reduction in their remuneration for the period under review. This is the 2nd consecutive year that the directors have done so. I would like to thank the Board of Directors for their continued sincerity to relieve the Group’s financial commitment and their invaluable contribution to the Group during this unprecedented time.

In closing, I would also like to round up the year 2021 by thanking all our colleagues, shareholders and business partners for their resilience, support and efforts in this difficult time. We will be living with the effects of the pandemic for some time to come but I am confident that being led by a strong and experienced management, the Group will be able to emerge stronger from the pandemic.


Chairman & Chief Executive Officer