SINGAPORE (Mar 8): Mandarin Oriental International, the hotel group which is a member of the Jardine group, reported a 1% drop in full year earnings to US$54.9 million ($72.3 million), or 4.37 cents per share, in FY17 from US$55.2 million, or 4.40 cents per share, in FY16.
Combined total revenue of hotels under management rose 4% to US$1.38 billion but underlying profit attributable to shareholders dipped 4% to US$54.9 million primarily due to the impact of the renovation of Mandarin Oriental Hyde Park in London although the combined results of the group’s other hotels improved in FY17.
The renovation of Mandarin Oriental Hyde Park remains on schedule, says Mandarin. The first phase was completed in Sept 2017, and the second phase is expected to be completed in the 2Q18.
Hotel Ritz in Madrid closed at the end of Feb to start a €99 million ($181 million) restoration, of which the group will fund its half share. The renovation will be extensive, covering all guestrooms and public areas, and will include the restoration of many interior architectural features. The hotel is expected to reopen towards the end of 2019.
Meanwhile, the group says it is continuing to review strategic options for The Excelsior, Hong Kong. This includes the possible redevelopment of the site into a commercial building.
Following an independent valuation of the group’s owned properties, the net asset value per share was US$4.57 at Dec 31 2017, compared with US$3.10 per share at the end of FY16. This increase mainly reflects the higher valuation of The Excelsior, Hong Kong.
In light of the ongoing programme of renovations, the directors have recommended a reduced final dividend of 1.50 US cents per share. This, together with the interim dividend of 1.50 US cents per share, will make a total annual dividend of 3.00 US cents per share in FY17, compared to 4.00 US cents per share in FY16.
In the next 12 months, Mandarin Oriental expects to open its first hotels in the Middle East, in Doha and Jumeirah Beach, Dubai, as well as Mandarin Oriental Wangfujing in Beijing.
Profit will be impacted by the final stages of the renovation of Mandarin Oriental Hyde Park as well as the start of the renovation of Hotel Ritz, Madrid though.
Shares in Mandarin Oriental closed 1 cent higher at US$2.25 on Thursday.
