Banyan Tree profitable for first time since FY2015

Singapore

LUXURY resort developer Banyan Tree Holdings is back in the black for the first time since FY2015, when it sunk into its worst loss ever.

The company booked a S$12.93 million profit in 2017, compared to its S$16.2 million loss in 2016. Its earnings per share stood at 1.67 cents, up from a loss per share of 2.13 cents.

This was largely due to a S$21.2 million increase in other income, mainly owing to gains from the deconsolidation of certain entities after an agreement inked with China Vanke Co in August 2017 to create Banyan Tree Assets (China) Holdings.

The company also proposed a dividend of one cent, its first since its 0.13 cent paid out for FY2014.

Banyan Tree's net profit for Q4 2017 fell 54 per cent during its fourth quarter to S$3.9 million ended Dec 31, mostly due to the absence of the benefit enjoyed last financial year from a reclassification in net fair-value gain after Thai Wah became the group's associate.

Excluding the reclassification, the company would have made a loss of S$13.9 million in Q4 2016. Earnings per share for Q4 2017 fell to 0.49 cent per share, from 1.11 cents.

Q4 revenue increased 9 per cent, thanks to the recognition of the sales of 31 units of Cassia Phuket (Phase 2) and higher revenues from its Thailand, Seychelles, Indonesia and Morocco resorts, and partially offset by lower revenue from China and Maldives.

Executive chairman Ho Kwon Ping said he was cheered by the global economic recovery underway. Overall forward bookings for the first quarter for Banyan Tree's owned hotels are 15 per cent above the same period last year, boosted by strong performance in Thailand.

In its property sales segment, the firm has unrecognised revenues of S$166.2 million, of which 30 per cent will be progressively recognised in 2018.

"We had one or two difficult years, and we think the turnaround is clearly here," said Mr Ho in a results briefing on Feb 27. "We only see positive signs and we intend to capitalise on these as much as possible."

On the company's strategic partnership inked in 2017 with AccorHotels to develop and manage Banyan Tree branded hotels around the world, he said: "We are discussing about a dozen or so projects with Accor and a few will be announced in the near future."

Banyan Tree announced on Feb 26 that it was offering 40 baht (S$1.68) apiece for the 57.08 million shares, or in aggregate about 34.25 per cent it does not yet own in its unit Laguna Resorts and Hotels (LRH).

Mr Ho said this was meant to consolidate the company's interest in the subsidiary, which mainly operates the integrated resort of Laguna Phuket. He said: "Whatever we get we will be happy with, because the future of LRH is looking very good."

Banyan Tree's shares closed one cent lower at S$0.62.