Mandarin Oriental's 2014 revenue, earnings edge up; announces US$316m rights issue

MANDARIN Oriental on Thursday reported a net profit of US$97 million for 2014, up one per cent from the US$96.3 million it made a year ago. Revenue rose 2 per cent to US$1.39 billion.

This came despite challenging trading conditions in some markets. For instance, two of its wholly owned hotels in Hong Kong did well in 2014, although their results were impacted by demonstrations in the city in Q4.

Occupancy levels at its Bangkok property also continued to be affected by the ongoing political uncertainty in the country, while the performances of its other Asian hotels were broadly stable.

The directors recommended a final dividend of five US cents per share. This, together with the interim dividend of two US cents per share, will make a total annual dividend of seven US cents per share, unchanged from 2013.

The hotel group on Thursday also announced a rights issue of up to 250.93 million new shares to raise gross proceeds of US$316 million.

The issue price of US$1.26 per share represents a 28.4 per cent discount to the closing price on March 4, 2015.

Proceeds will help Mandarin Oriental to retire debt and reduce gearing to levels before the acquisition of the Paris hotel, and finance the £85 million (S$117.4 million) renovation of Mandarin Oriental Hyde Park in London, due to start in 2016. It will also enable it to make further investments, in line with its development strategy.

Jardine Strategic, the company's principal shareholder, has committed to take up its entitlement and fully underwrite the offer.