STRONG PERFORMANCE FROM OUR THAI HOTELS AND GAIN ON SALE OF ANGSANA VELAVARU BOOSTED 1ST QUARTER OPERATING PROFIT
Category: Corporate Announcements Corporate Social Responsibility
- Revenue increased 17% to S$96.9 million.
- Operating Profit increased 19% to S$33.2 million.
- PATMI increased 19% to S$14.2 million.
Favourable performance from Hotel Investments segment.
- Strong contribution from hotels in Thailand particularly Angsana Laguna Phuket
- Inclusion of 100% of BT Seychelles results.
- Higher contribution from Fee-based segment.
- Gain on sale of Angsana Velavaru hotel and its leasehold rights.
- The persistent economic weakness in Europe is expected to continue.
- Favourable performance from operations in Thailand is expected to continue given the resilient tourism industry and absence of events-related risk.
- Overall forward bookings for 2Q13 for owned hotels are 2% ahead of last year.
- Sales momentum for property sales continues in 1Q13 but below the same period last year. Sales of new project Laguna Shores remain encouraging. 55%, totalling 125 units, were sold as at 8 May 2013.
- However, the next two quarters being low seasons of the year, will perform below 1Q which was the high season period.
Mr. Ho Kwon Ping, Executive Chairman -
“We are pleased with 1Q13 performance given the backdrop of the persistent economic weakness in Europe, our key market. The continuing favorable performance from our Thai operations given the absence of events-related risk and the resilient tourism industry helped sustain the favorable results in 1Q13. Our decision to sell and leaseback Angsana Velavaru as part of the asset rebalancing strategy to unlock values also boosted the performance this quarter. Nevertheless, with the next 2 quarters being low seasons, performance will be below 1Q13.”
DETAILED BUSINESS SEGMENTS REVIEW
In 1Q13, the Group registered revenue of S$96.9 million, an increase of S$13.9 million or 17% compared to the same period last year. This was mainly attributable to Hotel Investments and Fee-based segments, but partially offset by lower revenue from Property Sales segment. EBITDA of S$33.2 million in 1Q13 increased by S$5.2 million or 19% compared to 1Q12, mainly due to higher revenue. In addition, 1Q13 recorded higher other income which relates mainly to gain on sale of Angsana Velavaru hotel and its leasehold rights. In 1Q12, other income relates mainly to net gain on bargain purchase of Banyan Tree Seychelles.
Hotel Investments segment
Hotel Investments segment achieved revenue of S$70.1 million in 1Q13, an increase of 30% or S$16.1 million compared to S$54.0 million in 1Q12. Higher revenue was mainly from Thailand (S$10.0 million), Seychelles (S$4.7 million) and Maldives (S$1.8 million).
In Thailand, all the 3 hotels performed better than last year. Angsana Laguna Phuket recorded strong revenue growth with greater brand awareness. In 1Q12, this resort was still in its soft-opening period after a 5-month extensive renovation. Both Banyan Tree Phuket and Banyan Tree Bangkok’s performances were boosted by secured bookings from corporations. Overall revenue per available room (“Revpar”) for our resorts in Thailand increased by 35% from S$215 to S$290. Banyan Tree Seychelles’ revenue was included in the Group in the current quarter as it becomes a wholly-owned subsidiary following our acquisition of the remaining 70% in end March 2012. Our resorts in Maldives also recorded higher revenue mainly due to higher demand from the leisure market. Moreover, performance last year was partly affected by the political unrest that took place in January/February 2012 in Male. Overall Revpar of our resorts in Maldives increased by 15% from S$557 to S$638.
EBITDA increased by S$4.6 million from S$16.5 million in 1Q12 to S$21.1 million in 1Q13, mainly due to higher revenue.
Property Sales segment
Property Sales segment revenue decreased by S$2.6 million or 43% from S$6.2 million in 1Q12 to S$3.6 million in 1Q13. The shortfall was due to lower contribution of property sales units based on revenue recognition upon completion. In 1Q13, 2 units of Laguna Village villa were completed and recognized, as compared to a total of 4 units comprising of Laguna Village villa, townhome, and bungalow completed and recognised in 1Q12.
We continue to sell units under the new Laguna Shores project launched in December 2012 in Phuket. In 1Q13, a total of 58 units of S$15.4 million were sold with deposits received. For other property types, there were 9 new units sold with deposits received in 1Q13 compared to deposits for 13 units in 1Q12. Overall unrecognised cumulative revenue for all units sold as at 1Q13 was S$50.0 million as compared to S$17.2 million in 1Q12.
EBITDA decreased by S$2.1 million from S$0.1 million in 1Q12 to a loss of S$2.0 million in 1Q13 mainly due to lower revenue as explained above.
Fee-based segment revenue increased by S$0.4 million or 2% from S$22.8 million in 1Q12 to S$23.2 million in 1Q13 mainly due to higher hotel management fees but partially offset by lower revenue from spa/gallery operation.
Higher hotel management fees were mainly attributable to new resorts, Banyan Tree Shanghai on the Bund (opened in October 2012), Banyan Tree Lang Co (opened in December 2012) and Angsana Lang Co (opened in December 2012). Lower revenue from spa/gallery operation was mainly due to closure of a spa outlet in Kuala Lumpur to pave way for the construction of a new mixed development project by the hotel owner, and temporary closure of a spa outlet in Phuket for renovation.
EBITDA increased by S$0.7 million from S$1.9 million in 1Q12 to S$2.6 million in 1Q13 mainly due to higher revenue as mentioned above coupled with exchange gain.
PATMI increased by S$2.2 million or 19% from S$12.0 million in 1Q12 to S$14.2 million in 1Q13. This was mainly due to higher EBITDA in line with higher revenue from Hotel Investments and Fee-based segments, and higher other income. In addition, depreciation and finance costs were also lower following the sale of Angsana Velavaru hotel and its leasehold rights. This was however partially offset by higher income tax expense and higher non-controlling interests’ share of profits mainly due to the gain on sale of Angsana Velavaru hotel and its leasehold rights.
In the current quarter, the Group generated its funds from operations and from sale of Angsana Velavaru hotel and its leaseholds rights. It has fully settled its bank loans in Maldives, continued to invest in the two private equity funds and expended on property, plant and equipments for the resorts’ operations. As at 31 March 2013, the Group’s cash and cash equivalents was S$157.8 million.
1Q13 results have been in line with our expectation. At the macro level, the persistent economic weakness in Europe is expected to continue. However, with the resilient tourism industry in Thailand and the absence of events-related risk to date, we are hopeful that the positive trends generated from our operation in Thailand will continue.
Currently, the forward bookings for 2Q13 for owned hotels outside of Thailand on same store basis is ahead of last year by 3%, and for those owned hotels in Thailand, it is in line with last year. Overall, the Group’s forward bookings are ahead by 2%.
On the Property sales segment, sales momentum continues in 1Q13 with 9 units of S$9.7 million sold. However, this was lower than 13 units of S$14.3 million sold in 1Q12. Units in our recently launched Laguna Shores apartments in Phuket continues to be selling. As at 8 May 2013, we have received deposits for 125 units with total sale value of S$31.7 million. This represents 55% of total units available for sale. We are hopeful that this momentum will continue in the next few quarters.
As 2Q and 3Q are the low seasons of the year, the Group’s performance is therefore expected to perform below 1Q results which were the high season of the year.