HPL sinks into red with S$17.2 million H1 net loss on higher borrowing costs
Wong Pei Ting
HOTEL Properties Limited (HPL), whose managing director Ong Beng Seng is embroiled in a corruption probe, on Friday (Aug 11) reported a S$17.2 million net loss for its first fiscal half ended Jun 30, reversing from a net profit of S$1.9 million posted in the same period a year ago.
The group moved into the red as a result of higher borrowing costs, its bourse filings showed. This has caused it to share losses of S$16.5 million from associates and jointly controlled entitles, while its own finance costs doubled to S$46.3 million, from S$21.8 in H1 2022.
The results translate to a loss per share of 3.97 Singapore cents, against a loss per share of 0.97 Singapore cents the year before.
Revenue, however, rose 27.9 per cent to S$319 million, while gross profit rose 53.1 per cent to S$78.3 million for the half-year under review. The group attributed these to better performance by its hotels and resorts, in line with the growth trend in international travel.
The group said that it generated an operating profit before the share of results of associates and jointly controlled entities, depreciation, amortisation, fair value changes, and finance costs of S$80.7 million for the half-year. This figure compares with S$59.1 million recorded in the corresponding period last year.
The group reported a mark-to-market fair-value loss on long-term investments of S$8.4 million, compared with S$11.6 million last year.
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No dividend was declared for the financial period.
In giving its outlook, the group said that, barring unforeseen circumstances, the operating performance of its hotels and resorts is expected to continue to improve for the rest of the year, as H2 is traditionally the stronger season for the hospitality industry in general. It is nevertheless “mindful of the continuing challenges such as inflationary cost pressures and rising interest rates”, it stated.
In a separate bourse filing on Friday, the group announced that HPL Dolomites on Apr 25 bought the remaining 10 per cent of the share capital of Alpina Dolomites SRL from a minority shareholder for a consideration of 5.5 million euros (S$8 million).
HPL Dolomites is a joint-venture company incorporated in the United Kingdom that is 80 per cent owned by HPL Europe and 20 per cent owned by Como Holdings (Europe). Como is beneficially owned by Ong.
HPL said the acquisition will be funded by internal funds and bank borrowings, and is not expected to have any significant impact on the net earnings per share and net tangible assets per share of HPL Group, based on its audited consolidated financial statements for the year ended Dec 31, 2022.
The group added that the purchase consideration was negotiated at arm’s length on a willing buyer, willing seller basis, taking into consideration the trading performance of the business.
HPL shares closed at S$3.65, down S$0.01 or 0.3 per cent, on Friday.
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