Mandarin Oriental warns of impending H1 underlying loss in interim business update

LUXURY hotelier Mandarin Oriental International continued to post losses into the first three months of the year, as the Covid-19 pandemic battered the industry.

Unaudited underlying losses came to US$41 million for January to March, and the group expects to finish the half-year in the red - with more losses in the second quarter. It had already reported a half-year underlying loss of US$101.8 million in the year-ago period, for the six months to June 30, 2020.

Jardine-backed Mandarin Oriental reiterated in an interim business update on Wednesday that "the outlook for the second half of the year is uncertain", even as "trading conditions in the first quarter were extremely challenging".

The mainland Chinese market was the bright spot for the quarter, with Mandarin Oriental citing strong local consumption as a support for occupancy.

But border controls "greatly limited demand" in the rest of Asia, while the operating environment in America improved only slowly, and European conditions worsened.

The roll-out of Covid-19 vaccines in key markets and a rollback of travel curbs "will be crucial for the restoration of viable operating conditions", said Mandarin Oriental, which is listed in London, Bermuda and Singapore.

Still, it added that its financial position "remains robust", with net debt of US$536 million as at March 31, 2021, along with US$150 million of cash reserves and US$403 million in available committed debt facilities.

The group, which operates 34 hotels and seven residences in 24 markets, had earlier recorded an underlying loss of US$205.9 million for the year to Dec 31, 2020.

It saw a net loss of US$680.1 million when non-trading items were taken into account, including a revaluation loss on an investment property being developed.

Conglomerate Jardine Matheson has a 79 per cent stake in Mandarin Oriental. Shares in Mandarin Oriental last closed at US$1.98, up by US$0.03 or 1.54 per cent, before the news.