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Mandarin Oriental posts 49% jump in H1 net profit
HOTELIER Mandarin Oriental, a part of the Jardine Matheson Group, on Thursday reported a 49 per cent jump in net profit to US$22.3 million in the first half of the year.
The higher earnings were driven by improved performances across most of the portfolio, notably in Hong Kong, the group said. This trend is expected to continue in the second half of the year, it added.
Although results were impacted by the closure of Madrid's Hotel Ritz in February for a 19-month restoration, this was offset by better performances in Singapore, Bangkok and Tokyo.
Paris saw "signs of recovery" after several years of weak demand, the group said. In the Americas, Boston and Washington DC reported weaker takings from the same period last year, since the latter had benefited from the presidential inauguration in 2017.
Combined total revenue of hotels under management (including subsidiary hotels, as well as associate, joint-venture and managed hotels) in the six months ended June 30 was US$700.2 million, up 9 per cent from the same period last year.
Five new management contracts were signed in the first half of the year.
A strategic review of The Excelsior in Hong Kong has been ongoing since June last year, and could include the possible redevelopment of the site into a commercial building.
Meanwhile, the group is working with its insurers to assess the impact of the fire at Mandarin Oriental Hyde Park in London in June. The hotel is closed for repairs but a partial reopening is expected in the fourth quarter.
Given the coverage under the group's insurance arrangements, the impact on the group's profitability is expected to be modest, Mandarin Oriental said.
The group's US$20 million estimate of a write-off of tangible assets in relation to the London fire has also been offset by insurance claims recoverable.
In the next 12 months, the group expects to open its first hotels in Beijing, Doha and Dubai, as well as The Residences at Mandarin Oriental in Bangkok.
In light of the ongoing programme of renovations, the group has declared an interim dividend of 1.50 US cents per share, unchanged from last year.
Earnings per share was 1.77 US cents in the first half of 2018, up from 1.19 US cents in the first half last year. Net asset value per share was US$0.99 as at June 30, down from US$1.01 as at Dec 31, 2017.
The counter fell 1.69 per cent to US$2.33 on Thursday before results were announced.