Shangri-La Asia extends its losses; H1 FY2022 net loss at US$158.2 million

HOTEL group Shangri-La Asia reported a net loss of US$158.2 million for the first half of FY2022, marking 2 consecutive years of net losses since the Covid-19 pandemic hit the hospitality industry.

In a bourse filing on Friday (Aug 26), the company reported that its net loss for the period ending June 30, 2022 went up by 164.5 per cent from a net loss of US$59.8 million for the same period a year ago.

However, its consolidated revenue increased by 15 per cent to US$627.5 million from US$545.8 million over the same period.

The effective share of earnings before interest, taxes, depreciation and amortisation (Ebitda), which aggregates the Ebitda of Shangri-La Asia, as well as its subsidiaries and associates, declined 15.2 per cent to US$169.2 million from US$199.6 million a year ago.

The company said that recovery of its hotel business was strong in markets where travel restrictions have been relaxed. This includes its markets in the United Kingdom, Turkey, the Philippines, Singapore and Malaysia.

Revenue growth was also helped by a continued steady contribution from its investment properties business, where consolidated revenue increased to US$50.9 million, from US$45.6 million over the same period.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

However, the overall recovery has been impeded by sporadic Covid-19 outbreaks in China, which have led to localised lockdowns.

This led to a decrease in Ebitda on an effective-share basis, as hotels held by the group’s associates in Beijing and Shanghai were affected in a bigger way.

The weighted average occupancy of its hotels was 34 per cent for H1 FY2022, a decrease from 38 per cent a year ago.

Meanwhile, the revenue per available room (RevPAR) was US$51, a 13 per cent increase from US$45 over the same period.

“The decrease of occupancy rate was mainly due to a drop in mainland China hotels, arising from localised lockdowns during the period,” said Shangri-La Asia.

In addition, its net losses have also extended as the group was affected by an exceptional foreign exchange loss of US$106.6 million, arising from a 44 per cent depreciation of the Sri Lankan rupee in the first 6 months of 2022.

Its loss per share for H1 FY2022 is at 4.4 US cents, compared to 1.7 US cents a year ago.

Shangri-La’s board did not recommend the payment of an interim dividend for H1 FY2022.

Shares of Shangri-La Asia fell 0.8 per cent or 5 Hong Kong cents on Friday, closing at HK$6.23.