MANDARIN Oriental saw its net loss narrow to US$52 million for the six months ended Jun 30, 2024, from US$69.2 million in the year-earlier period, based on a Wednesday (Jul 24) night bourse filing.
Group revenue per available room was up 5 per cent year on year, with positive growth charted in all regions, said the hotel investment and management group. This was driven by both occupancy and rates in Asia, continued strength in leisure demand and occupancy in Europe, the Middle East and Africa, and growth in corporate occupancy in the US.
The combined total revenue of hotels under management in H1 2024, at US$979.5 million, marked an 11.1 per cent increase on year from US$881.5 million, boosted by the re-opening of Mandarin Oriental, Singapore, and the opening of four new hotels in Costa Navarino, Zurich, Mayfair and Muscat.
Combined total revenue growth, excluding new hotels and re-openings, was 5 per cent.
But consolidated H1 revenue slid 3.8 per cent to US$250.9 million, from US$260.7 million, due to disposals of hotel properties in Jakarta and Paris.
Loss per share stood at 4.11 US cents for the period, improving from 5.48 US cents the previous year.
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Underlying profit of both the management business and owned hotel segments fell from H1 2023.
The group marked a loss on disposal of US$37 million on the April 2024 disposal of the hotel portion of its Paris property for US$221 million.
“A new long-term hotel management contract has been agreed together with a renovation plan to strengthen the positioning of Mandarin Oriental in Paris,” it said.
In July 2024, the group completed the sale of the retail portion of its Paris property for US$160 million, recognising a US$56 million gain on disposal.
Proceeds from both transactions have been applied to reduce debt.
Mandarin Oriental said the valuation of One Causeway Bay, a Grade A office development in Hong Kong slated for completion in Q2 2025, was broadly flat compared to Dec 31, 2023, adding: “As we continued to invest in construction, the project recorded a non-trading loss of US$37 million.”
As at Jun 30, Mandarin Oriental’s net debt was US$110 million, down from US$225 million at the end of 2023. It attributed this mainly to the receipt of sale proceeds from the Paris hotel property. It holds more than US$619 million in cash and undrawn committed facilities. Gearing as a percentage of adjusted shareholders’ funds was 2 per cent, reduced from 5 per cent at the end of last year.
An interim dividend of 1.5 US cents per share was declared for the half year. It will be paid on Oct 16.
“While the global economic landscape remains uncertain, we continue to have confidence in the
outlook for luxury hospitality in the long term,” Mandarin Oriental said. It expects to open its second Beijing property later this year, and has announced two new management contacts since the start of the year.
The counter closed flat at US$1.65 on Wednesday, before the announcement.
