Shangri-La Asia reverses into losses as Covid-19 hit hotel operations

SHANGRI-LA Asia on Friday posted a net loss of US$460.2 million for its full year ended Dec 31, 2020, a reversal from a net profit of US$152.5 million a year ago.

Consolidated revenue declined 57.5 per cent to US$1.03 billion, as Covid-19's impact on international and domestic travel industries hit its hotel operations severely.

Revenue from its property development segment also declined due to there having been fewer units for handover than a year ago; there was also a drop in its investment properties operations due to weakness at its serviced apartments in Singapore, partially offset by the ramp-up of One Galle Face Mall and Tower in Colombo, Sri Lanka, as well as the growth of its subsidiary Investment Properties in China.

Loss per share was 12.89 US cents, compared to earnings per share of 4.27 US cents a year ago.

In Singapore, its hotel occupancy averaged 45 per cent for the year, down from 82 per cent a year ago, while revenue per available room was US$51, versus US$179 in the previous year.

"A strong start of the year was quickly disrupted by Covid-19, where occupancy dropped to below 30 per cent in March. Our hotels then saw a gradual recovery from April, thanks to the government's contracts for overseas workers and stay-home notice programme for returning residents. They were also helped by 'staycations' towards the end of the year," it said.

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Shangri-La Asia said the H2 2020 recovery in mainland China, where most of its hotel properties are, has mostly sustained its momentum into 2021.

"Our earlier investments into new products related to enhancing the family experience has begun to yield returns, helping our hotels generate a new source of growth. We also saw reassuring outcome from our efforts in venturing into new markets such as home deliveries and takeaways," it said.

It added that it also achieved "very encouraging" results from its 2021 Chinese New Year goodies sales promotions, which served as a strong testament in the general health of China's consumption demand.

Tenants at the retail stores in its investment properties also enjoyed year-on-year growth during the 2020 October Golden Week holidays.

"As countries around the world have begun their vaccination programmes, we hope that it is only a matter of time when our lives can once again resume normality by end of 2021," it said.