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GLOBAL Premium Hotels undid previous years' over provisioning for taxes in the fourth quarter, helping the hotel developer to post a 61 per cent gain in net profit despite a slowdown at an operational level.
Global Premium, which runs the Fragrance chain of economy hotels, reported net profit of S$8.4 million, or 0.80 Singapore cents per share, for the three months ended Dec 31, 2014.
But that was after recording a credit of S$3.4 million, from a S$774,000 expense a year earlier, from writing back provisions for taxes from previous years.
Excluding tax, operating profit fell 17.2 per cent to S$4.9 million despite revenue increasing by 7.2 per cent to S$16 million.
For the whole of 2014, net profit rose 9.7 per cent to S$21.2 million, or 2.02 cents per share. The impact from the tax provision write-back had a similar impact for the full year. Profit before tax for 2014 fell 11.4 per cent to S$20.8 million.
Global Premium Hotels stock closed at 35.5 Singapore cents on Friday, higher by 1.4 per cent or half a Singapore cent before the results were announced.
Global Premium Hotels is "cautiously" optimistic for the year ahead, citing fiercer competition as new supply of hotel rooms further depresses occupancy and room rates.
The company, however, noted that positive press for Singapore tourism and major events such as the Southeast Asian Games and the 50th year of independence for Singapore could help to lift tourist arrivals.