M&C posts £17m in net profit for Q1; too early to predict FY2015 performance: Kwek

MILLENNIUM & Copthorne Hotels plc (M&C), which is 61.4 per cent held by Singapore-listed property group City Developments, unveiled on Thursday a net profit of £17 million (S$34 million) for the first quarter of 2015, compared to £16 million a year ago.

M&C saw revenue improve from £175 million a year ago to £189 million, thanks to improved revenue from its hotel operations.

Profit attributable to the equity holders of the parent stood at £8 million, versus £7 million a year ago.

Hotel revenue grew by 10.4 per cent to £170 million, reflecting higher revenue per available room (RevPAR), positive impact from acquired properties and refurbished hotels, as well as higher income from meeting and events.

Property income fell by £2 million to £8 million in Q1 due to the sale of the last Glyndebourne condominium units for £6 million a year ago. This was partially offset by rental income from Millennium Mitsui Garden Hotel Tokyo, a new 329-room hotel, located in the heart of Ginza 4-Chome District.

The slightly weaker pound sterling had a positive impact on group revenue, but did not significantly affect profit.

"Overall trading results in the first three months of 2015 were in line with the slower trading pattern that the group normally sees in the first quarter and in line with expectations, although it is too early to predict performance for the full year," Kwek Leng Beng, M&C's chairman said.

The quarter saw higher labour costs, especially in New York under collective bargaining arrangements and in Singapore because of labour shortages.

Mr Kwek, who is also the executive chairman of City Developments, said: "Management is focused on maintaining profitability by containing costs, especially in Singapore and New York."

In Singapore, hotel occupancy was stable at 87.3 per cent, with average room rate falling by 10.5 per cent to £92.94 as a result of increased room supply and lower visitor numbers. Asia RevPAR fell by 10.2 per cent to £64.16, with decreases in both occupancy and average room rate.

In the United States , RevPAR rose by 11.8 per cent to £60.19 reflecting the contribution from Novotel New York Times Square, growth in the regional US, particularly at the Millennium Biltmore Hotel Los Angeles and The McCormick Scottsdale, which was recently refurbished.

In London, RevPAR was up by 2.3 per cent to £81.09. Excluding The Chelsea Harbour Hotel, London RevPAR increased by 0.6 per cent. Higher RevPAR at Millennium Hotel London Mayfair was largely offset by lower occupancy at Millennium Bailey's Hotel London due to the refurbishment of guestrooms which started at the end of last year. Most of the other European hotels posted RevPAR gains.

Australasia was the group's fastest growing region in RevPAR terms. The 15 per cent increase to £55.91 was driven by higher occupancy and average room rate. New Zealand continues to benefit from increased visitors from Asia, particularly China in the current high season and increased airline capacity into the country.