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Banyan Tree sinks deeper into the red in H1 2020 on Covid-19 impact

BANYAN Tree Holdings sank deeper into the red with a net loss of S$49.15 million for the six months ended June 30, widening from a loss of S$2.69 million a year ago on the back of the impact of Covid-19.

Revenue dived 43 per cent to S$75.36 million as travel restrictions, limited airlift and multiple waves of lockdowns affected the hotel investments and fee-based segments significantly, with some properties on partial operations.

Loss per share stood at 5.85 Singapore cents, compared with a loss per share of 0.32 Singapore cents previously.

Among its three main business segments, only the residences and extended stay segment saw an increase in revenue, mainly due to higher average price of units recognised in the current period.

The hotel investments segment registered a 49 per cent dive in revenue to S$48.2 million from its operations, as a result of significantly lower occupancies from almost no international tourist arrivals in several of its markets.

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Its fee-based hospitality segment comprising its hotel management, gallery, spa, design and other operations also saw revenue fall 48 per cent to S$14.5 million, due to soft demand, low occupancies and project delays.

The group said that until there is clarity on the duration and consequences of the Covid-19 pandemic, it will continue to pursue steps to reduce costs, conserve cash and diversify sources of funding to strengthen its balance sheet.

Cash preservation measures implemented include unpaid leave, restructuring initiatives, and the suspension of noncritical capital expenditure. The group is also reviewing all aspects of operations, including its sales and marketing programme, to ensure that it is ready to meet demand when air travel returns to normal and borders are reopened in each of the countries where it operates.

In the next 12 months, the group expects to open eight new resorts and seven new spas across Thailand, Malaysia, Indonesia, China, Qatar, Mozambique and Greece, of which the latter three are new markets.

Over the next three years, 46 new properties are expected to open in line with the group’s ambition to double its operating footprint by 2025.

Banyan Tree’s shares close flat at 23 Singapore cents, prior to the release of its results.

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