Pavillon Holdings Ltd. – 1H 2025 Financial Performance Review

Pavillon Holdings Ltd., a Singapore-listed company with interests spanning food & beverage (F&B), property, warehousing, and logistics, has released its half-year results for the period ended 30 June 2025. This review analyzes the company’s financial performance, business developments, and outlook based strictly on its latest interim report.

Key Financial Metrics and Comparative Table

Historical Performance Trends

• Revenue: Down 3% YoY, with F&B revenue declining by S\$783k, partly offset by increased contributions from China operations (+S\$538k).
• Net Profit: Swung from a profit of S\$2.03m to a loss of S\$1.85m, largely due to higher finance expenses, a sharp currency exchange loss, and lower other income.
• Operating Cash Flow: Operating activities used S\$0.69m cash, a reversal from inflows in the prior period, but overall cash balance rose due to investing activities (notably, disposal of financial assets).

Exceptional Earnings and Expenses

• Finance Expenses: Up 150% YoY, mainly due to full-period consolidation of Fengchi IOT, which shifted from associate to subsidiary status in May 2024.
• Currency Exchange Loss: S\$2.01m loss (vs. S\$0.21m gain last year), driven by RMB depreciation against SGD and translation of RMB-denominated loans.
• Other Income: Down 80%, as previous year included a S\$199k gain on asset disposal and higher government grants.
• Fair Value Gain (FVOCI): S\$8.28m recognized in other comprehensive income on conversion and partial disposal of Lingbao Gold Group shares, boosting total comprehensive income despite operating losses.

Asset Revaluation and Delays

• Investment Property: No revaluation in 1H 2025; change in value reflects only FX translation (RMB depreciation). The last valuation (Dec 2024) was S\$98m based on the Income Approach. Carrying value as of 30 June 2025 is S\$93.73m.

Divestments and Fund Flows

• Disposal of Financial Assets: S\$13.19m proceeds from sale of Lingbao Gold Group shares, which contributed significantly to the cash increase.
• Cash Position: Cash and equivalents nearly doubled to S\$17.71m as a result.

Related Party and Unusual Transactions

• Related Party Transactions: Material transactions (accrued interest, rental payments/receipts) with entities associated with controlling shareholder Mr. Ding totalled ~S\$2.97m YTD, under 5% of group NTA. Most are interest accruals or rental flows between consolidated entities, with no net group impact.
• No Dividends: No interim or final dividend declared for the period. The company cites a need to preserve capital for operations and new business development.

Macroeconomic & Industry Commentary

• Management notes “ongoing challenges” in the F&B sector, including increased costs, cautious consumer sentiment, and global uncertainties (especially US tariffs).
• Customers are increasingly price-sensitive, impacting restaurant revenue and overall group performance.

Chairman’s Statement and Tone

The Board’s statement is matter-of-fact and neutral, offering confirmation of the report’s accuracy and transparency regarding related-party transactions. There is no overt positive or negative spin, but the commentary acknowledges a challenging operating environment and justifies the absence of dividends.

Business Developments

• Fengchi IOT: Now fully consolidated, providing property, warehousing, and logistics revenue out of Tianjin, China.
• Lingbao Gold Group Investment: Conversion of unquoted shares to H Shares and subsequent partial sale generated significant fair value gains and cash inflow.

Outlook and Forward Guidance

• Management expects continued competition, cost pressure, and macroeconomic headwinds in the F&B sector.
• No specific forecasts or guidance are provided, but the company’s strong cash position is highlighted as a buffer for operational needs and future development.

Conclusion: Neutral to Weak Outlook, Cautious Stance

Pavillon Holdings Ltd. enters the second half of 2025 with a much stronger cash position but faces ongoing operational losses, mainly from F&B headwinds, higher finance expenses, and currency effects. The one-off fair value gain from investment disposal masks underlying business challenges. The absence of dividends reflects management’s cautious approach in an uncertain environment.

Overall, financial performance is weak from a core-earnings perspective. The significant improvement in balance sheet liquidity and NAV per share is driven by asset sales and investment revaluation, not by sustained operating profitability. Investors should monitor for stabilization in F&B operations and further clarity on the deployment of surplus cash.

View Pavillon Historical chart here