The Hongkong and Shanghai Hotels, Limited Interim Results for
the Six Months Ended 30 June 2010
HONG KONG, Aug. 25 /PRNewswire-Asia/ --
HIGHLIGHTS
Key financial results
Earnings before interest, tax, depreciation and amortisation
increased by 19% to HK$490 million.
Underlying profit attributable to shareholders increased by 26%
to HK$142 million.
Profit attributable to shareholders increased by 31% to HK$605
million, after including property revaluation gains (net of tax and
non-controlling interests).
Earnings per share and underlying earnings per share of HK$0.41
(2009: HK$0.32) and HK$0.10 (2009: HK$0.08) respectively.
Shareholders' funds as at 30 June 2010 amounted to HK$23,461
million or HK$15.89 per share (31 December 2009: HK$23,040 million
or HK$15.67 per share).
Adjusted net asset value as at 30 June 2010 amounted to
HK$29,345 million (HK$19.88 per share).
Gearing ratio decreased to 7% (31 December 2009: 8%).
Interim dividend of 4 HK cents (2009: 3 HK cents) per share.
Milestones
The Peninsula Shanghai held its grand opening ceremony on 18
March 2010, marking the return of HSH to one of its founding cities
after an absence of 55 years. The grand opening of the Arcade
within The Peninsula Shanghai was held on 1 July 2010.
The Peninsula Paris project made steady progress in the first
half-year and the hotel is expected to open in 2012.
In May 2010 the Company, through its wholly-owned subsidiary
Peninsula of Tokyo Limited, signed bilateral loans of JPY 6 billion
each with two international banks. The five-year term loans are
principally to refinance the original construction loans for The
Peninsula Tokyo, which was opened in 2007.
The unaudited interim results announced today by The Hongkong
and Shanghai Hotels, Limited (HSH) showed positive results for the
Group in the first six months of 2010.
Commenting on the Group's interim results, Managing Director and
Chief Executive Officer Mr. Clement K.M. Kwok said: "The highlight
of the first half of 2010 was undoubtedly the grand opening of The
Peninsula Shanghai on 18 March 2010. Standing on a magnificent
location directly fronting the famous Bund and adjacent to the
former British Consulate buildings, the 92,160 square metre complex
comprises 235 guestrooms, extensive restaurant, banqueting and
other facilities, a high-end retail arcade and a hotel apartment
building and provides our Company with a most fitting return to one
of its founding cities after an absence of 55 years.
"The Hotels division recorded a 13% increase in revenue compared
with the first half of 2009, while occupancies at all of the
Peninsula hotels improved as compared to last year. In the
Commercial Properties division, occupancies at the Group's
principal assets remained largely at full capacity. The various
businesses in the Clubs and Services division have all shown
improved performance as compared to the same period last year."
The total turnover for the period amounted to HK$2,176 million,
up 11% over the same period in 2009. EBITDA (earnings before
interest, tax, depreciation and amortisation) increased by 19% to
HK$490 million.
After taking into account the increase in fair value of
investment properties of HK$547 million (2009: HK$413 million) and
the current and deferred tax charges of HK$179 million (2009:
HK$116 million), profit attributable to shareholders in the six
months amounted to HK$605 million. Our underlying profit
attributable to shareholders, which we have calculated by excluding
the post-tax effects of the property revaluation surplus and other
non-operating items, amounted to HK$142 million (2009: HK$113
million).
Earnings per share and underlying earnings per share were
HK$0.41 (2009: HK$0.32) and HK$0.10 (2009: HK$0.08)
respectively.
Shareholders' funds increased to HK$23,461 million or HK$15.89
per share. Net borrowings decreased to HK$1,888 million and the
Group's gearing ratio decreased to 7%. The Company has also
provided a calculation of the adjusted net assets attributable to
shareholders, which after taking into account the fair market
valuations of hotel properties and golf courses and a write-back of
deferred taxation on property revaluation surpluses arising in Hong
Kong, amounted to HK$29,345 million or HK$19.88 per share.
The Directors have resolved to pay an interim dividend of 4 HK
cents per share (2009: 3 HK cents per share).
Business Overview
Hotels Division
Revenue for the Hotels division in the first six months of 2010
was 13% above the same period last year. Most of the hotels
recorded revenue increases exceeding 10%, with the highest
increases of 28% and 23% being achieved by The Peninsula Manila and
The Peninsula Beijing respectively. Revenue growth was more modest
for The Peninsula Chicago and The Peninsula Bangkok, at 3% and 9%
respectively.
In Asia, The Peninsula Hong Kong achieved a revenue increase of
12% over the same period last year, driven by higher occupancy and
increased business from the corporate and wholesale sectors. The
Peninsula Shanghai enjoyed robust business in its rooms and food
and beverage operations; the World Expo helped to drive additional
business to the hotel. Most of the retail tenants had opened their
shops by June, in time for the Peninsula Arcade's formal opening on
1 July 2010. At The Peninsula Beijing, revenue increased by 23% and
RevPAR also increased by 35% over the same period last year.
Commercial revenues from the Arcade remained strong. In Japan, The
Peninsula Tokyo recorded a revenue improvement of 12% with higher
occupancy than the same period last year. In Thailand, revenue
recorded at The Peninsula Bangkok for January and February 2010 was
25% above the same period last year but business was severely
impacted by the political unrest, resulting in a drop in occupancy
and average room rates. However, the hotel was able to achieve a 9%
increase in year-on-year revenue, helped by strong banquet demand.
In The Peninsula Manila, the hotel recorded significant revenue
growth of 28% over the same period last year, following completion
of renovation in most of the guestrooms and public areas.
In the United States, The Peninsula New York enjoyed a strong
second quarter of 2010, resulting in a year-on-year revenue
increase of 15%. Business at The Peninsula Chicago saw some
improvement also in the second quarter and the hotel ended the
first half with a 3% increase in revenue over the same period last
year. The Peninsula Beverly Hills saw revenue improved by 16%
year-on-year at the hotel, with higher occupancies and improved
food and beverage income.
Commercial Properties Division
Turnover from this division was 4% higher than in the first six
months of 2009. The HK$28 million revenue increase from the Repulse
Bay Arcade, Peak Tower and The Landmark was sufficient to offset
the reduced revenue in other residential and office properties. The
residential leasing market in Hong Kong continues to consolidate
and demand for leasing of The Repulse Bay apartments remains
positive.
At The Repulse Bay Complex, turnover was 2% higher than the same
period last year. The completion of the Arcade's revitalisation in
August 2009 has resulted in an increase in commercial revenue as
compared with last year.
At The Peak Complex, turnover from the Peak Tower and St. John's
Building increased by 26% and 5% respectively over the same period
last year. The Peak Tower remained fully let with higher average
rental rates and higher turnover rental than last year. Demand from
visitors for the Sky Terrace continued to be strong.
Clubs & Services Division
Revenue from the Clubs and Services division was 8% above the
same period in 2009, with higher revenue in all areas. The Peak
Tram recorded a 20% higher turnover and 10% more passengers than
last year. An increase in visitor arrivals to Hong Kong and
an expansion of ticket sales network resulted in passenger numbers
increasing to 2.5 million in the first six months of 2010, from 2.3
million in the same period last year.
Revenue from Peninsula Clubs and Consultancy Services was 12%
higher than the same period in 2009, with increased revenue from
management fees, consultancy fees and Cathay Pacific Lounges, as
passenger numbers to the airport lounges have increased.
There has been a 19% increase in revenue in Peninsula
Merchandising, which has wholesale and retail merchandise
operations in Hong Kong, Japan and other countries. Revenue of Tai
Pan Laundry increased by 11% compared to 2009, as lower diesel oil
prices and controlled costs have resulted in higher profit levels
than in the same period in 2009.
Peninsula Paris Project
The Peninsula Paris, 20% owned by the Group in joint venture
with Qatari Diar Real Estate Investment Company, is being developed
in a century old Beaux Art building located on Avenue Kleber, near
the Arc de Triomphe.
This project made steady progress in the first six months of the
year. Soft demolition work, which began in June 2009, was completed
in April 2010. This was followed by the appointments of
design consultants for key areas such as lighting, landscaping,
acoustic, signage and purchasing, as well as health and safety.
Design of the hotel's interiors, including the public areas, spa
and guestrooms, are in progress.
The general contractor for the project has been appointed and
major re-development work including installation, ground and
structural works will begin in the autumn of this year. The
Peninsula Paris is expected to open in 2012 and will be the Group's
first hotel in Europe.
Outlook
As previously reported, the occupancies and room rates at all of
our Peninsula hotels were significantly adversely affected by the
global economic crisis which started in September 2008. By the
second half of 2009, our business had started to stabilise and
improve and this gradual recovery has continued in the first six
months of 2010. Although also affected by the global economic
downturn, our commercial properties, which are mainly located in
Hong Kong, remained relatively stable during the downturn and their
stability has been maintained in the first half of this year.
While we have seen a general improvement across all our
businesses in the first half of the year, the outlook for the
remainder of 2010 remains uncertain with general concerns about a
possibility of a 'double-dip recession' and different economic
conditions and outlook in the various markets in which we
operate.
The bulk of our assets and earnings continue to be based in and
derived from Hong Kong, where the economy has remained strong and
our trading prospects remain positive due to the proximity of Hong
Kong to mainland China. The Peninsula Hong Kong has recovered to
trading levels not too far below the same period before the
financial crisis in 2008. The Repulse Bay Complex continues to
experience a robust level of demand from tenants. Both the Peak
Tram and the Peak Tower have maintained a positive momentum of
business from inbound tourists.
The Peninsula Shanghai has already been widely recognised as an
hotel of exceptional quality and is experiencing strong business,
with reservations on the books which indicate this will continue at
least until the World Expo finishes at the end of October. The
Peninsula Beijing has recovered to a more stable level of business
although the luxury hotels market in this city remains
over-supplied. The economics of The Peninsula Beijing are strongly
supported by its highly successful high-end retail arcade, which as
in The Peninsula Hong Kong and The Peninsula Shanghai, is usually
fully occupied with the top retail brand names.
Elsewhere in Asia, The Peninsula Tokyo continues to be
recognised for its superb product and has improved its business,
although room rates continue to be depressed due to the Japanese
economy. The Peninsula Manila appears to be heading into a stable
economic environment following the recent presidential elections in
the Philippines. The Peninsula Bangkok has of course been
significantly adversely affected by the political troubles in the
country and the emergency rule in Bangkok which remains in
place.
In the US, The Peninsula Beverly Hills has recovered to a
remarkably strong level of business over the summer. The Peninsula
New York has shown some improvement with returning international
and financial markets-related business. However, The Peninsula
Chicago, which is more dependent on US domestic business, remains
well below the pre-crisis levels. Generally, the issue of labour
costs remains a major concern in the US, posing challenges for the
profitability and margins of our businesses.
In overall terms, our Group remains well-placed to address the
economic downturn, with our focus remaining on growing the long
term value of our assets. The Peninsula hotels have all been
maintained and enhanced to an excellent physical condition and are
highly competitive at the top end of the markets which they serve.
Our Company remains in a strong financial position with a low level
of gearing and we have the resources to grow our brand on the
highly selective basis in line with our philosophy.
About The Hongkong and Shanghai Hotels, Limited (HSH)
Incorporated in 1866 and listed on The Stock Exchange of Hong
Kong (00045), HSH is a holding company whose subsidiaries,
associates and jointly controlled entity are 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 2012). 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
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