Sim Leisure Group Ltd. 1H2025 Financial Results: Navigating Transition with Growth in Theme Parks and Slower Construction

Sim Leisure Group Ltd., a Singapore-listed developer and operator of theme parks and themed attractions, has released its condensed interim financial statements for the six months ended 30 June 2025. The report reveals a period of operational transition, with notable growth in its theme park segment offset by a slowdown in the themed attractions construction business. Below, we break down the key financial metrics, performance trends, corporate developments, and management commentary to provide investors with a comprehensive view.

Key Financial Metrics and Performance Overview

*QoQ: Quarter-on-quarter change not calculated due to lack of quarterly data.

Segment Analysis

• Theme Park Operations: Revenue grew 15.5% YoY to RM37.39 million, driven by the full six-month contribution from KidZania Singapore and increased visitor numbers at Malaysian parks.
• Themed Attractions Construction: Revenue dropped 34.5% YoY to RM35.99 million, as the Six Flags Qiddiya project in Saudi Arabia neared completion, causing a significant reduction in segment revenue and profit.

Profitability and Margins

• Gross Profit: Fell 41.6% YoY, primarily due to lower profits from the construction segment and higher operating costs associated with recently opened parks (ESCAPE Ipoh Park and KidZania Singapore).
• Net Profit: Decreased 48.6% YoY, reflecting the impact of reduced construction segment contribution, higher finance costs, and increased operating expenses from new park openings.
• Other Income: Rose to RM2.027 million (vs. RM0.343 million in 1H2024), including a one-off compensation of RM1.17 million and a government grant of RM0.25 million.

Balance Sheet and Cash Flow Highlights

• Non-Current Assets: Increased by RM9.19 million, mainly due to higher right-of-use assets from new park leases and additional investment in property, plant, and equipment.
• Current Assets: Declined by RM11.78 million, driven by lower cash balances (operating outflows, supplier payments, and tax obligations), and reduced trade receivables and inventories.
• Cash Flow: Net cash used in operations was RM1.35 million (vs. net cash generated of RM11.47 million in 1H2024), mainly due to increased tax payments and negative working capital changes.
• Net Asset Value per Share: Marginally declined to RM0.7039.

Dividend Update

• Dividend Paid: A final tax-exempt dividend of 3 sen per share was paid in respect of FY2024, consistent with the previous year.
• Interim Dividend: No interim dividend has been proposed for 1H2025, as the Board has opted to conserve cash for business expansion.

Exceptional Items and Notable Events

• One-off Items: Included compensation income (RM1.17 million) and a government grant (RM0.25 million).
• Legal Update – ESCAPE @ KL Base: Early termination of the theme park agreement resulted in ongoing negotiations and a letter of demand issued to the landowner. Discussions are at an advanced stage.
• New Contracts: The Group’s 60%-owned Sim Leisure Arabia Contracting L.L.C. secured a SAR 112.6 million subcontract for theming works at the Al Nahda Entertainment Complex in Riyadh, expected to restore segment revenue from 2H2025.
• Related-Party Transactions: Included RM104,000 in interest paid to a non-independent non-executive director for a loan to a subsidiary.

Management Commentary

Chairman’s Statement:

During the financial period under review, the Group continued to expand its indoor park portfolio with the successful launch of two new ESCAPE Challenge parks, one in Putrajaya in February 2025 and another in Johor Bahru, which held a soft launch in September 2024. The Johor Bahru Park was fully completed with all 10 adventure games and activities officially opened to the public in April 2025. This expansion brings our total park count to seven, featuring a diverse range of immersive experiences under the ESCAPE and KidZania brands…

The Group remains firmly committed to the introduction of its rebranded entertainment hub, SIMall – Social Interactive Moments for All, a transformation of the earlier PLAY MALL concept. SIMall is slated for gradual rollout towards the end of 2025 and is envisioned as a multi-brand indoor entertainment environment… The Group remains steadfast in its strategy to elevate its theme park and indoor entertainment offerings, optimise the customer journey through digital transformation, and deliver sustainable growth across its operations both locally and internationally.

The tone is cautiously optimistic, highlighting ongoing expansion, digital innovation, and new business initiatives while acknowledging operational challenges and a focus on sustainable growth.

Outlook and Guidance

• Outlook: The Group expects segmental revenue and profit in themed attractions construction to improve in the second half of 2025 following the new contract in Saudi Arabia. Theme park operations are expected to benefit from the expanded park network and ongoing digital enhancements.
• Risks: Key risks include the impact of project completion timing (notably the Six Flags Qiddiya wind-down), foreign exchange movements, and ongoing legal negotiations related to project terminations.

Conclusion and Investment Recommendation

Overall Assessment: The 1H2025 results reflect a transitional period for Sim Leisure Group. While the theme park segment is showing strong growth and benefiting from recent new openings, the construction segment has seen a significant slowdown as a major project concludes. The company’s financial performance is weaker YoY, with lower revenue, profit, and EPS, and a decline in net cash from operations. However, management is actively investing in new parks, digital solutions, and has secured a substantial new contract that may restore construction revenues in the second half.

For Existing Shareholders: Hold. The Group is investing for future growth, with new parks and a major contract expected to boost results in 2H2025. However, investors should monitor execution risks (especially legal resolutions and project delivery) and cash flow management.

For Potential Investors: Wait. While the long-term prospects appear promising due to expansion and new contracts, the near-term outlook is clouded by weaker earnings, margin pressures, and project transition risks. Consider monitoring for signs of earnings recovery and successful execution of the new Saudi contract and indoor park rollouts before initiating a position.

Disclaimer: This analysis is based solely on the financial report provided and does not constitute financial advice or a solicitation to buy or sell any security. Investors should conduct their own due diligence and consider their risk tolerance before making investment decisions.

View Sim Leisure Historical chart here