Centurion Corporation Limited Company Results Briefing – 1H 2013

19 August 2013

Centurion Corporation Limited

DisclaimerDisclaimer

� This presentation and the accompanying presentation materials (if any) ("Presentation") are made for informational purposes, without regard to the objectives, financial situation nor needs of any for informational purposes, without regard to the objectives, financial situation nor needs of any specific persons.

� The Presentation does not constitute, or form any part of any offer for sale of or subscription of, or solicitation of any offer to buy or subscribe for, any securities nor shall it, or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.basis of, or be relied on in connection with, any contract or commitment whatsoever.

� The Presentation was prepared exclusively for the parties presently being invited for the purposes of discussion. Neither the Presentation nor any of its content be distributed, reproduced or used without the prior written consent of Centurion Corporation Limited ('"Company"). The Company does not make any representation or warranty, express or implied, as to the accuracy of the information not make any representation or warranty, express or implied, as to the accuracy of the information contained herein, and expressly disclaim any and all liability based, in whole or in part, on such information, errors therein or omissions therefrom.

� The Presentation includes forward-looking statements provided with respect to the anticipated future performance of the Company. Such forward-looking statements reflect various assumption of the performance of the Company. Such forward-looking statements reflect various assumption of the management concerning the future performance of the Company. Accordingly, there can be no assurance that such projections and forward-looking statements will be realised. The actual results may vary from the anticipated results and such variation may be material. No representations or warranties are made as to the accuracy or reasonableness of such assumptions or the forward-looking statements based thereon.

2

ContentsContents

� CORPORATE OVERVIEW

� 1H RESULTS OVERVIEW

� BUSINESS OVERVIEW

� OUTLOOK� OUTLOOK

� Q&A

3

Corporate OverviewCorporate Overview

4

About Centurion CorporationAbout Centurion Corporation

� Owns, develops and manages quality workers accommodation assets under the WESTLITE brand. WESTLITE brand.

� Strong portfolio of 7 operational accommodation assets totalling 29,066 beds in Singapore and Malaysia.

� Also owns an optical storage media manufacturing business as a result of the � Also owns an optical storage media manufacturing business as a result of the reverse takeover of SM Summit on 1st August 2011.

Centurion Private Equity Group (65.0%)

Public and Other Shareholders (35.0%)Centurion Corporation Ltd

5

Our Regional PresenceOur Regional Presence

◄ ISKANDAR DEVELOPMENT REGION

SingaporeWestlite Cemerlang

Westlite Tebrau

Westlite Senai

Westlite JB Techpark

Port Hedland

Jakarta

Westlite Pasir Gudang

Westlite Tampoi

Westlite Senai

Port Hedland

Westlite Tuas Westlite Toh Guan

Westlite Mandai

Sydney

1H Results Overview1H Results Overview

7

KEY FINANCIALSKEY FINANCIALSGroup Net profit increase to $59.8m for 1H2013

S$’000 2Q2013 2Q2012(Restated)3

% Change

1H2013 1H2012(Restated)3

% Change

Revenue 15,984 17,030 - 6% 31,983 30,005 + 7%Revenue 15,984 17,030 - 6% 31,983 30,005 + 7%

Net Profit 1

before valuation 4,044 4,200 - 4% 7,869 6,209 + 27%

NP Margin 25% 25% - 25% 21% + 4ppNP Margin 25% 25% - 25% 21% + 4pp

Valuation 2 51,955 - n/m 51,955 - n/m

Net Profit 55,999 4,200 1,233% 59,824 6,209 + 864%Net Profit 55,999 4,200 1,233% 59,824 6,209 + 864%

The results for 2Q FY2013 and 1H FY2013 included once-off net gain of $51.9 million, namely, the fair value gain arising from change in recognition of investment properties from cost to fair value basis ($55.9 million) and impairment loss on optical business’s plant and equipment ($3.9 million)

1. This represents the recurring earnings of the Group

2. Valuation – One off items represents fair valuation gains arising from investment properties and impairment loss on plant and equipment

basis ($55.9 million) and impairment loss on optical business’s plant and equipment ($3.9 million)

8

impairment loss on plant and equipment

3. With effect from this quarter, the Group changed its accounting policy for investment properties from cost to fair value model. The change was applied retrospectively and accordingly, the comparative financial statements were restated.

Segment Breakdown (Exclude One off items)

S$'000 Accommodation Optical

1H 2013 1H 2012 Change 1H 2013 1H 2012 Change1H 2013 1H 2012 Change 1H 2013 1H 2012 Change

Revenue 22,484 16,031 + 40% 9,499 13,974 - 32%

Net Profit 8,739 5,889 + 48% (870) 320 n/m

Net Profit Margin 39% 37% + 2pp na 2% n/mNet Profit Margin 39% 37% + 2pp na 2% n/m

30%47%

5%

70%53%

95%111%

- 11%

9

Accommodation Business

Recorded a 48% increase in net profits for 1H 2013Recorded a 48% increase in net profits for 1H 2013

Revenue (S$'000) Net Profit (S$'000)

25,000

Revenue (S$'000)

16,031

22,484

10,000

Net Profit (S$'000)

5,889

8,739

10,000

15,000

20,000

16,031

4,000

6,000

8,0005,889

0

5,000

1H2012 1H2013

0

2,000

1H2012 1H2013

• Accommodation revenue grow $6.5m (40%) from business expansion & increase rental rates in Singapore

• Net Profit increase $2.9m (48%) attributable to revenue growth and contributions from joint venture company.

10

Optical Disc Business:

32% reduction in revenue for 1H 201332% reduction in revenue for 1H 2013

Revenue (S$'000) Net Profit (S$'000)

15,000

Revenue (S$'000)

200

400

Net Profit (S$'000)

13,974

9,499

320

(870)

5,000

10,000

(600)

(400)

(200)

0

200

1H2012 1H2013

0

1H2012 1H2013 (1,000)

(800)

(600)

• Revenue decrease $4.5m (32%) stemmed from weakened demand for optical media

• Lower revenue and exchange losses impacted the bottom line of the optical • Lower revenue and exchange losses impacted the bottom line of the optical business which turn from profit of $0.3m to loss of $0.9m

• Generated positive cashflow but decrease from $1.6m to $0.1m in 1H 2013.

11

Balance Sheet Highlights

Net Assets boosted from fair valuation gains

S$’000 1H2013 FY2012S$’000 1H2013 FY2012(restated) Change %

Cash & Cash Equivalents 36,285 41,027 - 12%

53,010 58,538 - 10%Current Assets 53,010 58,538 - 10%

Non Current Assets 326,419 267,324 + 22%

Current Liabilities 45,290 45,149 -Current Liabilities 45,290 45,149 -

Non Current Liabilities 71,009 68,585 + 4%

Net Assets 263,130 212,128 + 24 %Net Assets

Gearing Ratio 23% 26% - 3 pp

Net Gearing Ratio 14% 14% -

• Cash and cash equivalents reduced by $5m due to dividend payments and funding requirements for the acquisition of dormitory assets in Malaysia.

• Net asset increase by $51 m due mainly to a fair value gain

12

• Net asset increase by $51 m due mainly to a fair value gain

Key RatiosKey Ratios

Change 1H2013 FY2012(restated)

FY2011(restated)(restated) (restated)

Earnings Per Share

+275% 7.91c 2.11c 3.46c

Price +66% 31.50c3 19.00c2 16.30c1Price

Price/Earnings Ratio

4 9 5

Dividend N.A. 0.7c4 N.A.Dividend N.A. 0.7c N.A.

Dividend Payout Ratio

N.A. 19%5 N.A.

NAV per share +26% 34.80c 27.51c 25.92cNAV per share +26% 34.80c 27.51c 25.92c

Market Capitalisation6

+65% S$238m S$144m S$123m

1. As at 31 December 20112. As at 31 December 20123. As at 28 June20134. Comprising a one-off interim dividend of 0.3 cents and a full year dividend of 0.4 cents for FY20125. Based on FY2012 dividend of 0.4 cents6. As at 31 December for respective years

13

6. As at 31 December for respective years

Business Overview -Business Overview -

Accommodation

14

Our WESTLITE Brand

• WESTLITE brand communicates the heart of our business. • WESTLITE brand communicates the heart of our business.

• Shaped and inspired by roofs and the Chinese character for people

人， it is a symbol of affordable home living in conducive environment designed for our residents.

• Managed with our heart!

15

About WestliteAbout Westlite

� One of the largest providers of workers accommodation in Singapore and Malaysiaaccommodation in Singapore and Malaysia

• 7 operational dormitories

− Current capacity 29,066 beds

− 2 undergoing asset enhancements − 2 undergoing asset enhancements (increase of 5,304 beds)

• 2 dormitories under development

− 16,000 beds in the pipeline (3,000 beds − 16,000 beds in the pipeline (3,000 beds in 2013)

� Professionally managed under our WESTLITEbrandbrand

� Pioneer of purpose-built workers accommodation concept in Malaysia

Our Mission:

To be Asia’s leading provider of quality accommodation and

related professional management services.

16

Strong Singapore Base

� One of Singapore’s leading workers accommodation providers

• 3 dormitories with 18,186 beds in operation (≈100% occupancy )

• 2 undergoing asset enhancements (increase by 5,304 beds by end 2013)

Westlite Toh Guan Westlite TuasWestlite Mandai

• 2 undergoing asset enhancements (increase by 5,304 beds by end 2013)

� Board client based including marine, manufacturing, construction, oil & gas industries etc

Westlite Toh Guan Westlite TuasWestlite Mandai

(45% owned)

� Purpose-built accommodation with current capacity of 4,836 beds on leasehold land (45 years lease remaining)

� Acquired in March 2012

� Temporary prefabricated workers accommodation on short term

� Purpose built accommodation on freehold land under development

� Phase 1 commenced operations in April 2013 with 4,750 beds

remaining)

� Commenced upgrading to increase capacity to 8,600 beds

� Upgrading to be completed in Dec 2013

BCA lease (3 3/4 years remaining)

� For construction workers only

� Capacity: 8,600 beds

in April 2013 with 4,750 beds

� Phase 2 will be completed by end 2013 and will increase capacity to 6,290 beds

2013 � Capacity: 8,600 beds

Building Presence in Malaysia� Pioneer of purpose-built workers accommodation in Johor catering

primarily to Manufacturing sector

� 4 operating dormitories and 2 under development

� Current capacity of 10,880 beds� Current capacity of 10,880 beds

� 16,000 beds in the pipeline (3,000 in 2013)

� Good progress in ramping up with renowned MNCs

Operating Dormitories

Westlite Tebrau Westlite JB Techpark

Under Development

Westlite Senai

Acquired in: Dec 2012Acquired in: Feb 2012Opened in: Apr 2012

Acquired in: Nov 2011Opened in: Jul 2012

Acquired in: Dec 2012Phase 1 to be completed in 2Q2013Expected Capacity: 3,000 beds (Phase 1)

6,000 beds (Phase 2)

Opened in: Apr 2012 Capacity: 2,480 beds

Westlite TampoiWestlite Desa Cemarlang Westlite Pasir Gudang

Opened in: Jul 2012Capacity: 5,800 beds

Acquired in: Apr 2012 Opened in: Jun 2012Capacity: 1,600 beds

Acquired in: Oct 2012 Opened in: Dec 2012Capacity: 1,000 beds (2,000 after development completion)

Acquired in: May 2012Under PlanningExpected Capacity: 6,000 beds

First Foray into AustraliaFirst Foray into Australia

� Acquired plot in Port Hedland, Western Australia in September 2012

� Currently undergoing rezoning and development approval process

� Proposed development of a short-stay � Proposed development of a short-stay accommodation in the Pilbara Region, Western Australia

� Short stay accommodation to be constructed on Anderson Street in the city centre of Port on Anderson Street in the city centre of Port Hedland

� Cater to workers and business travellers involved in the region’s mining industriesinvolved in the region’s mining industries

19

KEY ACHIEVEMENTS KEY ACHIEVEMENTS

SINCESINCE

REVERSE TAKEOVERREVERSE TAKEOVER

20

� 6 ACQUISITIONS TO DATE in Singapore and Malaysia maintaining our focus on providing quality workers accommodation in Asiain Asia

� 5-FOLD INCREASE in BED CAPACITY growing from 5,300 beds at the time of the RTO to 29,066 beds currentlyat the time of the RTO to 29,066 beds currently

� REVENUE GROWTH OF 3.6 TIMES from $6.3m to $22.5m in 1H � REVENUE GROWTH OF 3.6 TIMES from $6.3m to $22.5m in 1H 2013 compared to the corresponding period in 2011

� NET PROFIT STANDS AT $8.74m (92% Growth) compared to � NET PROFIT STANDS AT $8.74m (92% Growth) compared to the net profit of $4.55m in 1H 2011

� WESTLITE BRAND is well on the way to becoming synonymous with quality accommodation services

21

Accommodation Portfolio

7 Operational accommodation assets in Singapore

& Malaysia

� Current capacity of almost 30,000 beds

100% Occupancy rate for Singapore

accommodation assets

> 60% � Current capacity of almost 30,000 beds

2 Accommodation assets under development

� 20,000 beds in the pipeline

> 60% Occupancy rate for Malaysia

accommodation assets

OUTLOOKOUTLOOK

23

Industry Landscape Remains Favorable

Supply Demand

‹‹‹

� Particularly in Singapore, bed rental rate growth and high occupancy will continue due to the acute � Particularly in Singapore, bed rental rate growth and high occupancy will continue due to the acute demand/supply of workers accommodation

� Foreign work permit holders working in the non-domestic sectors increased 5.7% to 742,500 in 2012 compared to 2011

� Only 160,000 purpose-built beds were available in 2012, without any meaningful increase in supply

24

� Only 160,000 purpose-built beds were available in 2012, without any meaningful increase in supply

Outlook Summary

ACCOMMODATION BUSINESS

� Strong PIPELINE to support continuous growth� Strong PIPELINE to support continuous growth

• 1,540 beds in Westlite Mandai (4Q 2013)

• 4,000 beds after upgrading works in Westlite Toh Guan (1Q 2014)

• 3,000 beds in Johor (3Q 2013) • 3,000 beds in Johor (3Q 2013)

� Recognition of development profits from Mandai industrial ramp-up factory expected in 4Q 2013factory expected in 4Q 2013

� Continued ramp up of occupancy in Johor dormitories

� Clear growth and expansion strategies identified as well as various opportunities to expand our business into other geographical locations opportunities to expand our business into other geographical locations and accommodation types

OPTICAL DISC BUSINESS

� Optical disc business remains challenging as demand continues to fall

� Calibrate operational capacity to match demand reductions

25

� Calibrate operational capacity to match demand reductions

Warrant issue to our shareholdersWarrant issue to our shareholders

To reward shareholders for their support:

� Propose bonus issue 1 free warrant for every 10 existing ordinary shares � Propose bonus issue 1 free warrant for every 10 existing ordinary shares held

� Each Warrant to subscribe to 1 new share in our Company at an exercise � Each Warrant to subscribe to 1 new share in our Company at an exercise price of S$0.50

26

Thank YouThank You

27

Q & A SESSIONQ & A SESSION

28

Differentiation through Our Holistic Differentiation through Our Holistic Approach

A game of badminton to de-stress

Staff interaction with residents Receiving letters from home Computer room for easy internet access

MP Yeo presenting an award for excellence

Westlite Day celebrationsSharing laughter over drinks at the canteen

Residents catching up on some reading

29

Convenient grocery shopping on premises

Reminding residents the importance of security

Enjoying a meal in the comfort of their unit

On-site and always vigilant

End of Q2 Results Briefing End of Q2 Results Briefing

30