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Interim Results

Millennium & Copthorne's Q3 pretax profit down 28%

29 October 2015 07:29

Millennium & Copthorne Hotels said its Q3 pretax profit fell 28% to GBP36m, but on a nine-month basis was down 9.3% to GBP98m. It issued a cautious accompanying statement.

RevPAR was GBP77.66 for Q3, and GBP71.43 for the nine-month period. Revenue fell 2.8% to GBP211m in Q32, but rose 3.0% to GBP615m for the nine months.

Chairman Kwek Leng Beng commented:

"Revenue and profit were lower in the third quarter because of weaker performance by our hotels in Singapore and Rest of Asia. The Singapore market is unlikely to stabilise until the end of 2017 as hotel room inventory continues to grow.

"In Taipei, visa restrictions continue to inhibit the growth of mainland Chinese visitor numbers. Millennium Seoul Hilton is still recovering from lower visitor numbers after the outbreak of Middle East Respiratory Syndrome in May.

"These factors, together with slower economic growth in China and higher operating costs, will continue to put pressure on revenue and profit in Asia. Trading conditions elsewhere were more benign although we remain cautious about the outlook in New York and London.

"The long-planned upgrades of Millennium Hotel London Mayfair and Millennium Hotel London Knightsbridge are under consideration to commence in 2016 pending final approvals.

"These projects are designed to re-position both properties to appeal to higher yielding customers and, once completed, are expected to deliver considerable benefits to the Group. The projects will require temporary removal of rooms from inventory.

"Pressures on financial performance are expected to persist, especially in Asia. The Group remains focused on controlling costs, optimising sales opportunities and realising the potential of recently refurbished hotels. The Company is developing its talent pool, with a number of strategic appointments in prospect."

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