Hotel Properties H2 net profit rises to S$74.5 million on higher revenue

HOTEL Properties : H15 0% on Friday (Feb 24) reported a net profit of S$74.5 million for the second half of the year ended Dec 31, 2022, versus earnings of S$14.6 million in the comparable period for 2021. 

Revenue for the period came in at S$276 million, up 58.1 per cent from S$174.6 million. 

The board of directors has recommended a first and final cash dividend of S$0.04 per ordinary share, as well as a special dividend of S$0.01 per share. The date payable, as well as the books closure date, will be announced in due course, the company said. 

Hotel Properties’ FY2022 earnings came in at S$76.4 million, compared to a loss of S$7.7 million in FY2021. 

Revenue for the financial year rose 52.7 per cent to S$525.5 million. The company attributed this to better performance by its hotels and resorts as most countries reopened their borders and treated Covid-19 as “endemic”. 

Cash generated from operations improved significantly from S$56.6 million in 2021 to S$147.9 million for the year under review, Hotel Properties said. 

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Due to market volatility, the group suffered a mark-to-market fair value loss of S$17.3 million on long term investments for the year, compared to a fair value gain of S$45.1 million in 2021. 

Finance costs for the year also increased to S$59.4 million from S$34.7 million due to higher interest rates and additional borrowings to fund investments. 

Hotel Properties had announced on Dec 20 last year that it would dispose of all seven shop units that it owns in Ming Arcade in a collective sale. 

The company said all registered proprietors of the units in Ming Arcade have since signed the collective sale agreement, and the completion of the sale will take place in May according to the terms of the sale contract.

Following the reclassification of these seven shop units, the group recorded a total fair value gain from investment properties of S$77.8 million for the year, compared to S$3.6 million in 2021. 

Looking ahead, Hotel Properties said there are still challenges from political tensions, persistent inflation, rising interest rates, elevated commodity prices and logistic disruptions. 

The company said the commercial office space of Paddington Square and premium commercial office building Bankside Yards West-Arbor in London were completed in December 2022. 

It added that the completion of the London Underground ticket hall and related area comprising retail units of Paddington Square is expected this year, while the planning and development of the remaining phases of Bankside Yards continues. 

Shares of Hotel Properties ended flat on Friday at S$3.58.