The Hongkong and Shanghai Hotels, Limited Annual Results for the
Year Ended 31 December, 2010
HONG KONG, March 22, 2011 /PRNewswire-Asia/ --
HIGHLIGHTS
Key financial results
-- Turnover increased by 12% to HK$4,707 million (2009: HK$4,218
million)
-- EBITDA increased by 24% to HK$1,143 million (2009: HK$924
million)
-- Net profit attributable to shareholders amounted to HK$3,008
million
(2009: HK$2,660 million)
-- Underlying profit attributable to shareholders increased by 26%
to
HK$408 million (2009: HK$323 million)
-- Earnings per share and underlying earnings per share of HK$2.04
(2009:
HK$1.82) and HK$0.28 (2009: HK$0.22) respectively
-- Final dividend of 8 HK cents per share, making a total dividend
of 12
HK cents per share for 2010 (2009: 9 HK cents per share)
-- Shareholders' funds as at 31 December 2010 amounted to HK$29,103
million
or HK$19.66 per share (2009: HK$26,147 million or HK$17.79 per
share)
-- The Group's adjusted net assets as at 31 December 2010 amounted
to
HK$31,888 million (HK$21.55 per share) (2009: HK$28,571 million
at
HK$19.44 per share)
Key developments
-- The Peninsula Shanghai formally opened its doors on 18 March,
2010 with
a Grand Opening Gala, ushering in an historic moment for HSH as
it
returned to one of its two founding cities. Over 3,000 guests
from
around the world joined the celebrations.
-- Under an agreement signed in December 2009, The Peninsula
Shanghai has
commenced the management of building No. 1 at Bund 33 (the
former
British Consulate) as a state guesthouse and the leasing of
buildings
No. 2, 3 and 4 as well as the basement of the Bund 33 complex
for
commercial usage, as from September 2010.
-- Construction work for The Peninsula Paris began in September
2010. By
October, site installations had finished while ground and
structural
works continued through the end of the year.
-- A number of successful renovation projects were completed in
several
of our hotels during the year.
-- Significant renovation plans have been approved for The
Peninsula Hong
Kong and the Repulse Bay Complex to further improve and enhance
their
value over the next few years.
HSH'S 2010 RESULTS SHOWED STRONG RECOVERY
The audited results for the year ended 31 December 2010 of The
Hongkong and Shanghai Hotels, Limited (HSH) show that the Group's
business performance improved strongly from the year before, with
some recovery in the global hospitality markets following the
significant downturn caused by the economic crisis which started in
August 2008.
The highlight of 2010 was undoubtedly the Grand Opening of The
Peninsula Shanghai hotel, which took place on 18 March. Situated in
a magnificent location on the famous Bund in Shanghai with
commanding views over the Bund and across the river to Pudong, this
magnificent hotel represents for our Company a fitting return to
one of its founding cities after an absence of over 50 years.
(Logo: http://www.prnasia.com/xprn/sa/200804301910.jpg
)
In line with our Company's philosophy of focusing on a small,
select number of hotel projects which we hope can rank amongst the
world's best, no efforts were spared in the design, construction
and service standards of The Peninsula Shanghai and this property
has already gained widespread recognition both within China and
internationally, with the receipt of many prestigious awards.
HSH Chief Executive Officer, Mr. Clement K.M. Kwok, said: "2010
was a year in which we saw some recovery in the global hospitality
markets following the significant downturn caused by the economic
crisis which started in August 2008. However, whilst hotel revenues
recovered partially towards the 2008 pre-crisis levels,
inflationary pressures have remained on operating and other costs,
especially labour costs, and margins continue to be under pressure.
The performance of our hotels have varied quite significantly
between different geographical locations, with strength in Greater
China but recovery lagging in some parts of the US and Japan.
"It continues to be a strength of our Group that our hotels
business is balanced by a strong mix of commercial properties,
including several successful high-end shopping arcades inside our
hotels, as well as our well-established commercial, residential and
office properties."
The Group's total turnover in 2010 amounted to HK$4,707 million,
up 12% as compared to last year. Earnings before interest,
taxation, depreciation and amortisation (EBITDA) increased by 24%
to HK$1,143 million, while operating profit rose 35% to HK$794
million. We have continued to focus on controlling costs while
providing the staff and resources to service the increased business
levels and this has resulted in an improvement in EBITDA margin
from 22% in 2009 to 24% in 2010.
Inclusive of non-operating items, being principally the year-end
investment property revaluation surpluses, the net profit
attributable to shareholders was HK$3,008 million, as compared to
HK$2,660 million in 2009. The underlying profit attributable to
shareholders, which the Group has calculated by excluding the
post-tax effects of the property revaluation surpluses and other
non-operating items, amounted to HK$408 million, as compared to
HK$323 million in 2009, representing an increase of 26%.
HSH's financial position remains strong. The revalued net assets
attributable to shareholders increased by 11% to HK$29,103 million,
representing HK$19.66 per share and the gearing remained at a very
conservative level of 5% at the year-end. Our net cash surplus for
the year, after deducting capital expenditure, interest and
dividends, amounted to HK$568 million.
The Directors have recommended a final dividend of 8 HK cents
per share (2009: 6 HK cents per share), making a total dividend for
the year at 12 HK cents per share. Shareholders will also be given
the option to receive their dividend in the form of scrip rather
than cash.
On the situation in Tokyo, Mr. Kwok said: "We are of course
deeply saddened by the massive earthquake that shook Japan on 11
March 2011 and the suffering and devastation it has caused to the
people of Japan. The full extent of the devastation is still to be
assessed. However, all of the guests and staff at The Peninsula
Tokyo were safe and unharmed and the hotel premises did not suffer
any physical damage of significance. On the night of the
earthquake, The Peninsula Tokyo opened its doors to the general
public, providing hot food and beverages and refreshment facilities
to those seeking refuge, while special guestrooms were set aside
for pregnant women, mothers with small children, and the elderly
who needed a place to rest. The hotel has remained fully
operational throughout and will continue to play a role in
supporting the community where needed as it faces the challenges
that lie ahead as Japan recovers from the earthquake. We have
already launched a number of fundraising initiatives in our hotels
to assist the relief efforts.
"The impact on our businesses, both in Japan and elsewhere, in
the aftermath of this earthquake cannot be fully assessed at this
stage. We will, of course, use our best endeavours to manage the
financial and other consequences of this disaster and play our part
in restoring a healthy operating environment at The Peninsula Tokyo
as quickly as possible."
Hotels
Our Hotels Division recorded a mixed performance as economies
around the world recovered at different speeds and travel
demographics shifted from established long-haul markets to
intra-regional and domestic markets. Challenges remained in some
markets where we operate, including weak corporate business,
oversupply of luxury hotels and political instability.
Nevertheless, we experienced a strong surge in the second half of
the year in markets such as Hong Kong and New York.
China: Amongst the Peninsula Hotels, the strongest performance
came from our flagship property The Peninsula Hong Kong, where
business was revived in both the corporate and leisure segments.
Mainland China has become one of the top producing markets for the
hotel, along with significant business growth from emerging markets
including Russia and the Middle East. The Peninsula Arcade remains
highly sought after by leading luxury retail brands and both it and
the Office Tower were able to grow their average rent and maintain
effectively full occupancy during the year. The Peninsula Shanghai
held its Grand Opening Gala in March 2010 and has rapidly
established itself as the leading hotel in China. Boosted by the
World Expo 2010, the hotel benefited from strong demand from both
domestic and international travellers and performed well for a
hotel in its first full year of operations. The Peninsula Arcade
has been fully occupied by leading luxury retail brands and
officially opened in July 2010. Interior fit out work continues for
the 39-unit Peninsula Residences, which form part of this complex.
The Peninsula Beijing was able to maintain a leadership position in
the capital whilst competition from the large supply of other
luxury hotels remained intense. There was a significant recovery in
revenue as compared to last year and the important stream of
revenue from the Peninsula Arcade remained robust. The hotel's
Arcade upgrade is currently underway.
Asia: The Peninsula Tokyo, in its third year of operation, has
become a landmark in Japan's capital. The hotel saw a surge in
Asian and Middle Eastern visitors, who were relatively unaffected
by the global economic crisis, and its revenue increased
significantly from the previous year. Its wedding market was also
robust. In Thailand, The Peninsula Bangkok was hit by
anti-government demonstrations from April to June, which crippled
Bangkok and led to gloomy forecasts for Thailand's vital tourism
sector. However, tourism rebounded to a limited extent in the final
quarter of the year. At The Peninsula Manila, there was a marked
improvement in business during 2010 and the hotel was further
supported by the opening of Salon de Ning in December. Continuing
the Salon de Ning theme at the Peninsula hotels in Hong Kong,
Shanghai and New York, this venue has already become a leading
nightspot in Manila.
USA: The Peninsula New York completed the final phase of its
guestroom renovation in September 2010, which positioned the hotel
favourably for future growth. The number of business and leisure
travellers increased during the year although competition remained
intense within the luxury hotel segment. The booming business we
experienced in the fourth quarter, reminiscent of the pre-crisis
period, bodes well for the hotel. Business was weak for The
Peninsula Chicago, which is highly dependent on domestic and
corporate business. Nevertheless, the hotel continues to be
recognised as one of the best in the US and its well-recognised
leading market position places it strongly for future recovery. The
Peninsula Beverly Hills has sustained business remarkably well
throughout the economic crisis. In 2010, it enjoyed significant
business improvement, particularly from the entertainment industry
and the Middle East market. In October 2010, the hotel embarked on
a comprehensive guestroom enhancement programme which will continue
through the first half of 2011.
Overall, the revenue and EBITDA of the Hotels Division for the
year were HK$3,576 million and HK$604 million, an increase of 12%
and 40% respectively as compared to 2009.
Commercial Properties
As in past cycles, the Commercial Properties Division proved
more resilient during the economic downturn than the Hotels
Division, providing stable income contribution to the Group's
earnings.
The most important asset in this Division is the Repulse Bay
Complex. In the first full year after the revitalisation of the
Complex's restaurants and shopping arcade, food and beverage income
was significantly increased and the shop spaces were fully let,
reflecting the success of the renovation. Leasing demand for the
apartments remained strong. The total revenue of the Complex rose
8% from 2009 to HK$505 million. In order to continually enhance the
value and attractiveness of this important asset, a major
improvement plan has been approved. Starting in mid 2011, this will
comprise a three-year phased programme that will significantly
upgrade all the public areas of the residential towers and improve
the layout and efficiency of the serviced apartment tower.
The Peak Complex enjoyed an increase in income over 2009, due to
its strong positioning in the tourist market. The Peak Tower
achieved 100% occupancy during the year and recorded an increase of
24% in year-on-year revenue. The Sky Terrace welcomed a record
number of visitors. St. John's Building enjoyed a high occupancy
throughout the year with a 6% increase in revenue.
At The Landmark in Vietnam, both the office and residential
towers maintained high occupancies, yet revenues were 15-18% lower
than 2009 due to intense competition in Ho Chi Minh City.
Overall, the revenue and EBITDA of the Commercial Properties
Division for the year were HK$688 million and HK$450 million
respectively, an increase of 8% as compared to 2009.
Clubs & Services
The 122-year-old Peak Tram has maintained its position as one of
Hong Kong's most popular tourist attractions. In 2010, patronage of
the Peak Tram rose to a record 5.4 million passengers, an 11%
increase from 2009 and in line with the growth in visitor numbers
in Hong Kong.
Income from our club management activities rose, with a major
contribution coming from our management of the Cathay Pacific
lounges at the Hong Kong International Airport. The Thai Country
Club maintained the same number of golfers in 2010 but increased
its revenue by 12% over 2009. At Quail Lodge, the hotel portion
remained closed but the golf course and Clubhouse were open to
service the Club's 300-plus members and catering clientele.
Peninsula Merchandising achieved record sales in Hong Kong and Asia
for its signature mooncakes during Mid Autumn Festival, while
retail sales at the Peninsula Boutique in The Peninsula Hong Kong
were very strong.
Overall, the revenue and EBITDA of the Clubs & Services
Division for the year were HK$443 million and HK$89 million, an
increase of 10% and 20% respectively as compared to 2009.
Projects and Developments
The focus of our projects and development activities continues
to be on (i) the establishment of a small and select number of new
Peninsula hotels in key international gateway cities and (ii)
continual enhancement of our existing hotels and other properties
so as to maximise their long term value.
In Shanghai, following the grand opening of the hotel portion in
March 2010, we focused on working with the various retail tenants
to complete the Peninsula Arcade for its grand opening on 1 July
2010, as well as progressing with the interior construction and
fit-out of the 39 apartment units which form part of The Peninsula
Shanghai complex. Given the unique location of these apartments and
taking a positive view of the long term value of this asset, it has
been decided to hold these apartments as investment property and it
is expected that they will be offered for rental as from the second
half of 2011.
We have also worked closely with a company associated with the
Huangpu District Government in relation to the construction and
fit-out of the former British Consulate buildings, now named Bund
33. Under an agreement signed in December 2009, The Peninsula
Shanghai has commenced the management of the building No. 1 as a
state guesthouse and the leasing of buildings No. 2, 3 and 4 as
well as the basement of the Bund 33 complex for commercial usage,
as from September 2010.
The next Peninsula hotel currently under construction is in
Paris. Conversion of this magnificent, century-old Beaux Art
building to become The Peninsula Paris hotel commenced in September
2010, following the appointment of the general contractor in July
2010. At the same time, interior designs for the hotel's public
areas and guestrooms are at an advanced stage. The Peninsula Paris
will be the Group's first hotel in Europe and is scheduled to open
in 2013.We continue to look for future new Peninsula hotel
developments, but remain very selective in seeking opportunities in
exceptional locations in key gateway cities which offer the
potential to build a hotel to Peninsula's full requirements. A lot
of time and effort goes into this endeavour and I hope to be able
to report further progress in due course.
In the meantime, we continue to devote significant efforts to
the continual enhancement of our existing assets. During the year,
plans have been finalised for an ambitious upgrade of the
guestrooms at The Peninsula Hong Kong. The current guestrooms set a
new level of technology and functionality within the industry when
they were unveiled some 17 years ago and the aim is to raise the
bar once more with this new product, the construction of which is
expected to commence in 2012 at a projected cost of approximately
HK$450 million.
We have also approved a spend of approximately HK$731 million in
a phased programme over the next three years to revitalise the
public areas of the residential portions of the Repulse Bay
Complex, as well as to reconfigure the de Ricou serviced apartment
tower to increase efficiency and functionality. We believe this
investment will further enhance the value of the Repulse Bay
Complex which is currently valued at over HK$13.7 billion.
Many projects are undertaken on an ongoing basis to maintain and
enhance our existing hotels and other properties. During the year,
these have included the final stage of the guestroom renovation
programme at The Peninsula New York, the start of a comprehensive
guestroom renovation programme at The Peninsula Beverly Hills and
the creation of new outlets such as the Salon de Ning at The
Peninsula Manila.
Outlook
The strength of our Group continues to emanate from our genuine
commitment to the long term, which provides the vision and
willingness to invest in assets for their long term value creation
and the staying power to ride through shorter term cycles in the
economy without compromising the quality of our products and
services. In the volatile economic circumstances that we regularly
encounter in today's environment, this long term commitment has
enabled us to make investment and capital expenditure decisions
with a long term outlook and to maintain our service quality and
the continuity of our people. With this philosophy in mind, we
remain optimistic that we are continuing to chart a course which
will maximise the quality and value of our assets and deliver long
term returns to our shareholders.
In the more immediate future, we are optimistic that the
recovery in some markets that became apparent in the latter part of
2010 will continue into 2011. Generally, the economic development
of and outlook for Hong Kong and China, where the bulk of our
assets are based, continues to be positive and we expect this to be
reflected both in the trading results of our hotel operations and
the performance of our non-hotel commercial properties. However,
for our operations generally, there is no doubt that in the labour
intensive hotel industry, management of margins in the light of an
ever increasing cost base continues to be a difficult challenge and
the economics between revenue and costs continue to be imbalanced
in several of the markets in which we operate.
Sustainable development continues to be high on our agenda. Much
of our efforts here are focused on the development and well being
of our staff, where during the year we rolled out a completely
revamped human resources manual. Significant efforts have also been
made and continue to be made in the areas of energy efficiency,
water consumption, indoor air quality, waste management,
responsible sourcing and community involvement. Our energy
intensity and water usage intensity figures have continued to
improve and a new set of sustainable design standards for hotels
has been adopted for our future developments.
Our corporate development and investment strategy continues to
focus on the enhancement of our existing assets, seeking
opportunities to increase their value through new concepts or
improved space utilisation, and the development of a small number
of the highest quality Peninsula hotels in the most prime locations
with the objective of being a long term owner-operator. This is the
approach which we believe has enabled us to establish and sustain a
brand which is now recognised as possibly the leading luxury hotel
brand in the world, thereby creating long term value in each
Peninsula hotel through both asset value appreciation and
operational earnings growth.
About The Hongkong and Shanghai Hotels, Limited (HSH)
Incorporated in 1866 and listed on The Stock Exchange of Hong
Kong (00045), HSH is the holding company of a Group which is
engaged in the ownership, development and management of prestigious
hotel, commercial and residential properties in key locations in
Asia, the United States and Europe, as well as the provision of
transport, club management and other services. The hotel portfolio
of the Group comprises The Peninsula Hotels in Hong Kong, Shanghai,
Beijing, New York, Chicago, Beverly Hills, Tokyo, Bangkok, Manila
and Paris (opening in 2013). The property portfolio of the Group
includes The Repulse Bay Complex, The Peak Tower and The Peak
Tramways, St. John's Building, The Landmark in Ho Chi Minh City,
Vietnam and the Thai Country Club in Bangkok, Thailand.
For further information on this release, please contact:
Irene Lau
Senior Manager, Corporate Affairs
The Hongkong and Shanghai Hotels, Limited
Tel: +852-2840-7788
Fax: +852-2840-7567
Email: [email protected]
Websites: www.hshgroup.com , www.peninsula.com
SOURCE The Hongkong and Shanghai Hotels, Limited