Banyan Tree Q4 profit grows 44% on property sales, one-offs; to pay out 1.05 S cent/share

RESORT operator Banyan Tree Holdings' fourth-quarter net profit rose 44 per cent to S$5.6 million as better property sales and one-off disposal gains offset a weaker hotel segment, the company announced on Wednesday evening.

Earnings per share rose to 0.67 Singapore cent for the three months ended Dec 31, 2018, from 0.49 cent a year ago. The company is declaring a final cash dividend of 1.05 Singapore cent per share for the year. Banyan Tree shares closed at 59.5 Singapore cents on Wednesday before the results were announced.

For the 12 months ended Dec 31, 2018, net profit grew four per cent to S$13.5 million, or 1.60 Singapore cent per share.

Fourth-quarter revenue gained four per cent to S$92.8 million due to the recognition of 41 Laguna Park townhomes or villas in the property sales segment. The company recognised only 31 units in the year-ago quarter. Hotel investments revenue, however, was lower during the quarter due to Thailand hotels and the disposal of the Seychelles hotel in November 2018. Fee-based revenue also shrank due to lower architectural design and project fees earned from projects based on project milestones.

Banyan Tree's other income more than doubled to S$24.3 million in the fourth quarter from S$9.0 million a year-ago, a S$15.3 million increase. That came from gains as the company sold its assets portfolio in Seychelles and further restructured its assets in China. In November 2018, Banyan Tree sold an 18.6 per cent interest in Banyan Tree Assets (China), also referred to as BTAC, to China Vanke Co.

Looking ahead, Banyan Tree expects to open seven new resorts and to launch eight spas over the next 12 months. Forward bookings for owned hotels for the first quarter of 2019 are down eight per cent year-on-year, split between a four per cent decline outside of Thailand and a 10 per cent decrease within Thailand, the company said. Deposits for 57 property sale units with a sale value of S$37.2 million were received in the fourth quarter of 2018, down from 101 units with a sales value of S$63.6 million a year ago.

Unrecognised revenue as at Dec 31, 2018, was S$189.9 million, up 14 per cent from S$166.2 million as at end-2017. Banyan Tree expects to recognise about 40 per cent of that in 2019.

Executive chairman Ho Kwon Ping said in a statement: "In 2018, we continued our path of rebalancing assets to be more asset light by taking profit on our matured properties. We sold our Seychelles assets and also further reduced our shareholding in BTAC to a small minority stake. Amidst global slowdown and rising interest rates, we will be conservative and will deploy the proceeds from sale to reduce bank borrowings while continue to generate growth from existing core businesses."

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