SINGAPORE (Feb 2): GL Limited, formerly known as GuocoLeisure, posted a 15% decline in 4Q18 earnings to US$11.6 million ($15.2 million) from US$13.5 million in the same period a year ago on higher costs brought about by foreign exchange (forex) changes.
This brings the group’s earnings for the half year to US$29 million, up 18% from US$24.6 million in 2H17.
Revenue for the quarter grew 2% to US$88.7 million due to favourable forex gains, namely from a stronger GBP and AUD against the USD.
This was however offset in part by lower hotel revenue due to fewer rooms available for sale due to the refurbishment of Cumberland Hotel. The gaming and oil & gas (O&G) segments, too, continued to generate lower revenue due to lower gaming drop and O&G production during the period.
Meanwhile, cost of sales for 2Q18 grew 6% to US$36.2 million compared to US$34 million in the previous year as a result of strengthening of the GBP against USD over the quarter.
Administrative expenses also grew 5% to US$67.5 million from US$64 million previously on higher business operating costs in the hotel segment, as well as the strengthening of GBP against the USD.
Looking ahead, GL expects the London hotel market to remain soft, while factors such as uncertainties over Brexit and higher London room supply continue to affect the overall UK hotel industry.
The group says it maintains a cautious outlook as its London hotels continue to operate in a challenging environment due to increasing operating costs and stagnant demand, while the market is not expected to grow significantly going forward.
GL notes that the refurbishment of The Cumberland Hotel is progressing in stages, and is on track to be launched as Hard Rock Hotel in the next financial year.
The group expects its total rooms available for sale to be affected during this refurbishment period.
Shares in GL Limited closed 0.6% higher at 86 cents on Friday.
