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Mandarin Oriental H1 underlying net profit slides 52% to US$10.7m

DUAL-LISTED Jardine hotelier Mandarin Oriental's underlying net profit - which excludes non-trading items - was more than halved for the first half, according to results released on Thursday.

Underlying net profit plunged by 52 per cent year-on-year to US$10.7 million for the six months to June 30, as revenue fell by 8 per cent to US$641 million on the closure of the iconic The Excelsior in Hong Kong, and lower earnings from a Bangkok hotel shut in March for renovation.

Mandarin Oriental had said in late-2018 that it would shutter the 45-year-old The Excelsior for redevelopment as a mixed-use commercial building, which could take six years. The Excelsior, which closed on March 31, has since been reclassified as an investment property.

Overall, the group posted a net loss of US$12.1 million for the six months to June 30, against a net profit of US$22.2 million before, amid net non-trading losses on The Excelsior's closure.

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Mandarin Oriental described a mixed showing in the half-year across its own properties, as a slowdown in corporate business pared profits from the group's flagship Hong Kong hotel.

"Results in Tokyo were notably better while in the rest of the region, performances were broadly flat" with the exception of Bangkok, it added in its results statement.

Loss per share came to 0.96 US cent, against earnings per share of 1.76 US cents before.

The group opened four new hotels in the latest half-year, with freshly inked management contracts for a second hotel and residences in Istanbul, as well as residences in New York. It added in its outlook statement that it expects to benefit from a fully reopened Mandarin Oriental Hyde Park, London - which had needed repairs after a fire in June 2018 - and a growing pipeline of new developments.

The board has declared an interim dividend of 1.50 US cents a share, unchanged year-on-year.

Mandarin Oriental, which is listed in London, has secondary listings in Bermuda and Singapore.

The counter lost US$0.04 or 2.52 per cent to US$1.55 in Singapore on Thursday before the results were released.