GPHC: Announcement on Quarterly Report for First Quarter and Three Months Ended 31 March 2024

GENERAL ANNOUNCEMENT::ANNOUNCEMENT BY SUBSIDIARY COMPANY, GRAND PLAZA HOTEL CORPORATION

Issuer & Securities

Issuer/ Manager

CITY DEVELOPMENTS LIMITED

Securities

CITY DEVELOPMENTS LIMITED - SG1R89002252 - C09

Stapled Security

No

Announcement Details

Announcement Title

General Announcement

Date &Time of Broadcast

07-May-2024 17:18:14

Status

New

Announcement Sub Title

Announcement by Subsidiary Company, Grand Plaza Hotel Corporation

Announcement Reference

SG240507OTHR0HI1

Submitted By (Co./ Ind. Name)

Enid Ling Peek Fong

Designation

Company Secretary

Description (Please provide a detailed description of the event in the box below)

Please refer to the Quarterly Report for First Quarter and Three Months Ended 31 March 2024 submitted by Grand Plaza Hotel Corporation to the Securities and Exchange Commission of the Philippines on 7 May 2024.

Attachments

05.07.2024_GPHC_Q1FS.pdf

Total size =730K MB

SECURITIES AND EXCHANGE COMMISSION

SEC FORM 17-Q

QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES

REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER

• For the quarterly period ended March 31, 2024

2. Commission identification number ____________

3. BIR Tax Identification No. 000-460-602-000

GRAND PLAZA HOTEL CORPORATION

1. Exact name of issuer as specified in its charter
   PHILIPPINES
2. Province, country or other jurisdiction of incorporation or organization _____________

6. Industry Classification Code:		(SEC Use Only)

10F, The Heritage Hotel Manila, Roxas Blvd. cor. EDSA, Pasay City 1300

7. Address of issuer's principal office

Tel. No. (632) 8854-8838

Fax No. (632) 8854-8825

1. Issuer's telephone number, including area code N.A.
2. Former name, former address and formal fiscal year if changed since last report
3. Securities registered pursuant to Sections 8 & 12 of the Code, or Sections 4 & 8 of the RSA

Title of each Class	Number of shares of common
	Stock outstanding and amount
	Of debt outstanding
COMMON SHARES	87,318,270*
*includes 33,600,901 treasury shares

11. Are any or all of the securities listed on Stock Exchange?

Yes [ X ]

No [ ]

If yes, state the name of such Stock Exchange and the class/es of securities listed therein:

PHILIPPINE STOCK EXCHANGE, INC.

COMMON

12. Indicate by check mark whether the registrant:

1. has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines, during the preceding twelve (12) months (or for such shorter period the registrant was required to file such reports)

Yes [ X ]

No [ ]

(b) has been subject to such filing requirements for the past ninety (90) days.

Yes [ X ]

No [ ]

PART I - FINANCIAL INFORMATION

Item 1 Financial Statements

Financial Statements and, if applicable, Pro-forma Financial Statements meeting the requirements of SRC Rule 68, Form and Content of Financial Statements, shall be furnished as specified therein.

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations.

Furnish the information required by Part III, Paragraph (A)(2)(b) of "Annex C"

PART II - OTHER INFORMATION

The issuer may, at its option, report under this item any information not previously reported in a report in SEC Form 17-C. If disclosure of such information is made under this Part II, it need not be repeated in a report on Form 17-C which would otherwise be required to be filed with respect to such information or in a subsequent report on Form 17-Q.

SIGNATURES

Pursuant to the requirements of the Securities Regulation Code, the issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Issuer: YAM KIT SUNG

Signature and Title: General Manager & Chief Financial Officer

Date : 7 May 2024

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements Required Under SRC Rule 68.1

• Please see attached financial statements for interim Balance Sheets, Statements of Income, Statements of Changes in Equity and Statements of Cash flows.

Notes to Financial Statements

Summary of significant accounting policies

The financial statements of the Company have been prepared in accordance with Philippine generally accepted accounting principles (GAAP) and are denominated in Philippine pesos. The preparation of financial statements in accordance with Philippine GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies.

The same accounting policies and methods of computation are followed in the interim financial statements for the year 2024 as compared with the most recent annual financial statements.

Seasonality or Cyclicality of Interim Operations

All segments of the business are in its normal trading pattern.

Material Items

There are no material items affecting assets, liabilities, equity, net income or cash flows that are unusual because of their nature, size or incidents.

Estimates

There are no changes in estimates of amounts reported in prior interim periods of the current financial year or changes in estimates of amounts reported in prior financial years that have a material effect in the current interim period.

Issuances of Debts and Equity

There are no issuances, repurchases and repayments of debts and equity securities.

Dividends

There were no dividends declared in the current interim period.

Segment Revenue and Results

Statement of Financial Accounting Standard No. 31, "Segment Reporting", which becomes effective for financial statements covering periods beginning on or after January 1, 2001, requires that a public business enterprise report financial and descriptive information about its reportable segments. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance.

The Company organized its business into 3 main segments:

• Room Division - Business derived from the sale of guestrooms.
• Food and Beverage Division - Business derived from the sale of food and beverage at various restaurants.
• Other Operated Departments and rental - Business derived from telephone department, business center, car parking, laundry and rental of space.

The segment revenues and results are as follows:

	YTD 1st Quarter Revenue	YTD 1st Department Profit
	- Peso	- Peso
	'000	'000
Room	62,518	45,873
Food and Beverage	29,283	8,155
Other Operated Departments	14,845	14,746
and rental

Subsequent Events

None

Composition of Company

There are no changes in the composition of the Company during the interim period, including business combinations, acquisition or disposal of subsidiaries and long-term investments, restructurings and discontinuing operations.

Contingent assets or liabilities

There are no changes in contingent assets or liabilities since the last annual balance sheet date.

Contingencies

There are no material contingencies and any other events or transactions that are material to an understanding of the current interim period.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The top 5 Key Performance Indicators of the Company are as follows:

			31 March 2024	31 March 2023
Current liquidity ratios	2.0	2.1
Solvency (Debt to equity)	0.58	0.55
Assets to equity ratios	1.58	1.56
Profitability ratios	7.0%	(14.7%)
Profit/(Loss)	before tax
margin ratio
EBITDA	(Earnings before	6.59m	(1.51m)
interest,	tax,	depreciation
and amortization) - Peso

Note: The Company has no loans due to third party or related parties.

Current liquidity ratio is derived by dividing the current assets with the current liabilities. This indicator measures the liquidity of the Company in the short term. The current ratio decreased by 0.1 during the period of review compared to the same period of last year due to higher current liabilities arising from higher accounts payable offset by higher cash and accounts receivable.

Debt to equity ratio measures a company's financial leverage. It is derived by dividing total liabilities over equity. There is an increase in this ratio by 0.03 or 5.5% over the same period of last year and this is due to higher liability.

Assets/Equity ratio measures the proportion of equity used to finance assets of the company and it is derived by dividing total assets to equity. There is an increase in this ratio by 0.02 or 1.28% over last year as a result of higher assets balance specifically cash balance.

Profit before tax margin ratio is computed by dividing the profit before tax against the total revenue. This ratio measures whether the Company is able to contain its expenses in relation to the revenue. For this quarter, the Company reported an improvement as compared to the same period last year with a profit before tax margin of 7.0%.

EBITDA represents earnings before interest, tax, depreciation and amortization. This indicator measures the operating cash flow of a company. For the quarter under review, EBITDA increased by PhP8.1 million as compared to negative EBITDA in prior year.

Balance Sheets Analysis:

• Cash and investments in short-term notes: This balance consists mainly of cash and fixed deposits with banks. As compared to the end of last fiscal year, the balance increased by PhP23.5 million or 4.3% and increased by PhP77.4 million or 15.8% compared to the same period of last year. Due to improved trading at the hotel and further boosted by the rental income from casino tenant, cash improved.
• Accounts receivable: trade: As compared to 31 December 2023, trade receivable has fallen by PhP28.2 million (37.8%) due to improvement in collection effort while it increased by PhP15.5 million (50.6%) relative to same period of last year due to higher trading.
• Prepaid expenses: This balance increased by about Ph18.8 million (51.4%%) as compared to same period last year due to prepaid insurance premium during the year which will be amortized in 2024.
• Deferred tax assets: This balance increased by PhP4.4 million (54.2%) as compared to the same period of last year due to lower foreign exchange loss.
• Property and equipment: As compared to the same period of last year, this balance fell by PhP0.7 million (0.2%) as a result of depreciation for the year offset by addition during the year.
• Accounts payable: As compared to the end of last fiscal year, this balance has decreased by PhP11.1 million (11.3%) due to lesser purchases while the balance increased by PhP39.5 million (83.5%) as compared to same period of last year due to higher trading volume.
• Due to associated/related companies: This balance increased by PhP19.0 million or 38.0% as compared to last year due to the Company had not repaid its outstanding balance to related companies which will be paid off in 2Q2024.

Income Statement Analysis for the 3 Months Ended 31 March 2024

Revenue:

Total revenue for 1Q2024 as compared to 1Q2023 improved by PhP18.4 million (20.8%). All departments showed improvement with a notable increase in rental income.

Rooms:

Occupancy improved by 1.8 percentage points as compared to the same period of last year. However, Average Room Rate registered an increase from PhP2,902 to PhP3,086 or

6.3% improvement. As such, Revpar increased by 10.2% compared to last year. Retail segments led the improvement.

F&B:

F&B revenue improved marginally by PhP0.5 million (1.7%). Although Riviera showed an improvement, the gap in Banquet offset the higher revenue at Rivera. Banquet revenue is 6% lower than last year due to lower rental income.

Cost of Sales:

Consistent with the increase in F&B revenue, the cost of sales for F&B increased.

Operating Expenses:

This comprised of payroll cost, operating expenses and utilities. This balance increased by PhP10.5 million (11.7%). The main reason for the increase is in Administration and General expenses as the increase in minimum wage mandated by the government impacted wages. With higher revenue, credit card commission also increased compared to last year.

Non-operating Income:

Non-operating income recorded an income of PhP10.5 million as compared to a loss of PhP2.5 million last year. This is due to an exchange gain of PhP3.9 million in this quarter while prior year was a loss of PhP8.7 million.

Net income before tax:

The Company reported a profit of PhP7.5 million versus loss before tax of PhP13.2 million in prior year.

There are no material event(s) and uncertainties known to management that would address the past and would have an impact on the future operations of the following:

• Any known trends, demands, commitments, events or uncertainties will have a material impact on the Company's liquidity.
• Any material commitments for capital expenditures, the general purpose of such commitments and the expected sources of funds for such expenditures.
• Any known trends, events or uncertainties that have had or that are reasonably expected to have a material favorable or unfavorable impact on net sales/revenues/income from continuing operations.
• Any significant elements of income or loss that did not arise from the Company's continuing operations.
• The causes for any material change(s) (5% or more) from period to period in one or more line items (vertical and horizontal) of the Company's financial statements.
• Any seasonal aspects that had a material effect on the financial condition or results of operations.

Management is not aware of any event that may trigger direct or contingent financial obligations that is material to the Company, including any default or acceleration of an obligation. Management is not aware of any material off-balance sheet transaction, arrangement, obligation (including contingent obligations), and other relationships of the Company with unconsolidated entities or other persons that were created during the first 3 months of 2024.

PART II - OTHER INFORMATION

Tax matter:

This case is a Petition for Review with the CTA to invalidate the tax deficiency assessment in relation to year 2008 ("Deficiency Tax Case").

On 20 February 2015, the Company filed a Petition for Review with the CTA to invalidate the collection proceedings of the BIR. The Petition is based on the Company's position, as advised by tax counsel, that the collection proceedings initiated by the Commissioner of Internal Revenue ("CIR") is void because the assessment, from which the collection proceedings arose, did not comply with the requirements of law and lacked factual and legal bases.

The Deficiency Tax Case seeks to have the CTA review the Collection Letter that the Company received from the BIR on 12 December 2013. As far as the Company is aware, the Collection Letter was issued by the BIR in connection with a Formal Letter of Demand for alleged deficiency income tax, value added tax, expanded withholding tax, withholding tax on compensation and documentary stamp tax for the year 2008, in the aggregate amount of PhP508,101,387.12 consisting of PhP262,576,825.03 for basic tax, and interest of PhP245,524,562.09 from 20 January 2009 to 30 September 2013.

On 24 July 2015, the Company received a Warrant of Distraint and/or Levy dated 24 July 2015 from the BIR ("Warrant"). The Warrant relates to the tax case for year 2008. Considering that a Petition for Review has been earlier filed with the CTA on 20 February 2015 to question the validity of the collection proceedings initiated by the CIR and that the matter is currently being litigated at the CTA, the Company has taken appropriate legal measures to ensure that such Warrant is not implemented during the course of the trial proceedings.

During the CTA hearing on 21 September 2015, the Company presented 2 witnesses and they were able to finish their testimonies on the same day. The BIR, on the other hand, did not present any witnesses and opted to submit the case for the resolution of the CTA.

On 6 November 2015, the Company filed its Formal Offer of Documentary Evidence. In two Resolutions dated 04 January 2016 and 11 March 2016 respectively, the CTA admitted in evidence the Company's documentary exhibits.