HOTEL Royal's second quarter net profit tumbled 34.1 per cent year on year to S$469,000 from the previous year, dented partly by foreign exchange losses and lower revenue in some subsidiaries.
The decrease was mainly due to higher taxable income in a New Zealand subsidiary and lower revenue in some of the group's subsidiaries, it said. The weakened Thai baht, New Zealand dollar and Malaysian ringgit against the Singapore dollar also contributed to the decrease.
For the three months ended June 30, revenue shrank 3.9 per cent to S$13.29 million from the previous year. The decline in revenue was due to lower occupancy and lower room rates at some of its hotels.
Q2 earnings per share fell to 0.56 Singapore cent from 0.85 Singapore cent in the previous year.
For the half year ended June 30, net profit was 8 per cent lower at S$2.65 million and revenue edged down 2.2 per cent to S$28.51 million.
"The second half of 2016 will be equally challenging as the first half of 2016," said the group. "With the increased competition in the hospitality industry in Singapore, Malaysia and Thailand, the group expects more challenges in the year ahead. We will monitor our room occupancy and room rates in order to expand our customer base and enlarge our share of tourist arrivals."
The group plans to upgrade its properties in New Zealand to maximise rental income, it added.
It warned that its managed fund portfolio will be affected by world events such as Brexit and the terrorist attacks in Europe, while profitability will be affected by currency fluctuations.