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Mandarin Oriental’s underlying results for the
six months ended 30th June were significantly affected by the
depressed demand resulting from the global economic downturn and
to some extent concerns over Swine Flu while (H1N1).
In the face of these difficult challenges,
Mandarin Oriental achieved earnings before interest, tax,
depreciation and amortization for the first six months of 2009 of
US$35 million, compared to US$86 million in the first half of
2008.
The company’s underlying profit for the period
was US$1 million, compared with US$36 million in 2008.
Underlying earnings per share were US$0.11, compared to US$3.68
in 2008.
Including non-trading items, principally a US$78
million gain on the sale of the group’s 50% interest in its
Macau hotel offset by a provision of US$5 million against asset
impairment, the profit attributable to shareholders for the six
months was US$74 million, compared with US$36 million in 2008.
With the inclusion of non-trading items, the earnings per share
were US$7.53 compared with US$3.68 for the first half of 2008.
An unchanged interim dividend of US$2.00 per share has been
declared.
The Hotels
Occupancy levels for most of the
group’s hotels were substantially below those achieved in the
same period last year due to declining travel levels worldwide.
Average room rates have also been negatively affected,
particularly in Asia.
The group’s 100%-owned
Hong Kong hotels have both suffered from a significant decrease
in occupancy, which led to deterioration in average room rates.
The Tokyo hotel, which operates under a
long-term lease, was also impacted by lower occupancy levels, as
was the property in Manila. In Jakarta, the hotel remained
closed throughout the period for extensive renovations, and
will reopen in October of this year.
In Europe, demand for leisure travel, particularly in London,
remained relatively resilient. Average rates in US dollar
terms, however, were eroded by weaker currencies.
In the
Americas, the group’s subsidiary hotel in Washington D.C.
maintained its results, but management fees from other hotels
fell in response to declining revenues.
The average room rate was
maintained in Bangkok, but occupancy levels were badly affected
by the country’s ongoing political uncertainties and related
issues.
In Singapore, occupancy
weakened and average room rates suffered from competitive
pressures. The Kuala Lumpur hotel also saw demand weaken
significantly. Similarly, both New York and Miami suffered from
falling occupancy and lower average rates.
The Future
Mandarin Oriental currently operates 23 hotels and has a further
18 under development.
These represent approximately 10,000
rooms in 25 countries, with 17 hotels in Asia, 14 in the
Americas and 10 in Europe and North Africa. In addition, the group operates, or has under development, 13 Residences at
Mandarin Oriental connected to the Group’s properties.
Over the
next six months, new Mandarin Oriental hotels are due to open in
Barcelona, Marrakech and Las Vegas. The group continues to
liaise with the developers on the timing of the 15 other hotels
under development, all of which, except Paris, are management
contracts.
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