Shangri-La Interim Profit inched Up
August 30th, 2015
Shangri-La Asia, the luxury hotelier owned by the Kerry Group, reported the consolidated profit climbed up 5 percent to USD 41.1 million for the six month ended June, as compared to USD 39.0 million in the same period in 2014. The consolidated profit attributable to equity holders for the six months ended June 30 increased by 29 percent to USD 98.4 million from USD 76.2 million in the corresponding period last year.
Total revenue rose to USD 1.02 billion from USD 1.01 billion from the same period of the year prior to it. The Board has declared an interim dividend of HK5 cents per share to the investors.
By segment, the overall results of the hotel ownership segment turned to a net loss of USD 0.9 million this year from a net profit of USD 37.8 million in the same period of last year- the hotel group attributed this to weak market conditions in Hong Kong, Mainland China, Singapore, Malaysia, Australia and France. The large start-up losses, caused by higher depreciation charges in the initial years after opening of the new hotels in Mainland China (total seven hotels opened for business in 2014 and 2015), the hotel in London and the hotel in Ulaanbaatar amplified the negative impact on the financial results. The hotels in the Philippines and in Thailand performed relatively well, recording an increase in net profit of USD 2.3 million and USD 5.1 million, respectively. The performance of the hotel in Tokyo improved slightly but it continued operating at a loss due to the burden of the lease rent, the hotel group said in a statement to the stock exchange.
In contrast, the property rentals segment, especially the investment properties in Mainland China, continued to be the key profit contributor. The incremental net profit during the period from the property rentals segment was USD 15.6 million, mainly contributed by the additional profits from Jing An Kerry Centre Phase II and China World Trade Center of USD 10.1 million and USD 1.4 million, respectively, together with a USD 2.6 million reduction in loss in respect of the Shangri-La Residences, Dalian.
Net profit of the hotel management services segment declined marginally by USD 1.4 million. The Group’s effective share of the land cost amortization and pre-opening expenses for projects declined substantially from USD 29.0 million in 2014 to USD 6.1 million in the current period following the opening of large number of new hotels and the reversal of a USD 6.8 million provision made in prior years for pre-opening costs incurred for the terminated hotel project in Vienna, upon recovery of the sum under a settlement agreement.
