Hotel Prop full-year profit rises 7.2%

THANKS to a sharp drop in fair-value losses, Hotel Properties Ltd reported a 7.2 per cent rise in full-year net profit despite a 27.6 per cent dive in revenue.

For the year ended Dec 31, 2009, net profit attributable to shareholders climbed to $35.2 million from $32.9 million. Revenue dropped to $443.2 million from $612 million, resulting in gross profit diving to $131.8 million from $184.6 million.

The earnings attributable to shareholders were also helped by a $5.15 million fall to $1.98 million in profit attributable to minority interests.

‘2009 was a challenging year as the global economic crisis and the H1N1 outbreak directly affected the hospitality sector,’ the group said yesterday. ‘Both hotel occupancy and room rates suffered due to low tourist arrivals and a more cost-conscious business community.’

Revenue from its hotel segment declined 16.3 per cent from $427.7 million in 2008 to $358 million in 2009, while its properties segment recorded a 53.7 per cent fall in revenue from $184.6 million to $85.5 million.

The group attributed part of its lower revenue to the completion of The Met condominium development in Q2 2009. The collection from purchasers, however, resulted in higher cash generated from operations of $153.9 million for 2009 against $26.5 million the previous year.

Hotel Properties noted that the group’s last quarter of the year had begun to show ’signs of recovery’ where its hotel business had been concerned. Boosting its bottomline were the comparatively lower fair value losses last year.

For 2009, the group recorded a fair value adjustment loss on investment properties of $2.7 million compared with $37.6 million in 2008.

The group’s earnings per share for 2009 stood at 6.99 cents compared with 6.52 cents for 2008. It has recommended a final one-tier tax-exempt cash dividend of two cents per share, up from a final one cent the preceding year.

The group is planning to launch the condominium development at the former Beverly Mai site at Tomlinson Road this year. ‘An associate of the group will also have the proposed condominium development at the former Farrer Court site launch-ready during the year,’ it said.

Source: Business Times, 23 Feb 2010