Mandarin Oriental H1 profits jumped 49% to US$22.3m

The company recorded improved performances across most of its portfolio.

Mandarin Oriental was on a roll in the first half of 2018 as its underlying profit jumped by 49% from US$15m to US$22.3m. The combined revenue of its hotels grew by 9% from US$644.8m to US$700.2m.

According to its financial statement, the company recorded improved performances across most of the portfolio, particularly from Hong Kong (+8.6% to US$34.1m), Singapore, Bangkok and Tokyo. “There were also signs of recovery in Paris after several years of weak demand,” said Mandarin Oriental chairman Ben Keswick.

In The Americas (+142.11% to US$9.2m), there were weaker performances in Boston and in Washington D.C. compared with the same period last year, with the latter having benefited from the Presidential Inauguration in 2017. “Overall results were impacted by the closure of Hotel Ritz, Madrid in February 2018 for a comprehensive 19-month restoration,” Keswick added.

Mandarin Oriental Hyde Park, London has closed for the necessary repairs but it is anticipated that the hotel will be able to partially reopen in the fourth quarter of this year. “The impact of the fire is being assessed by insurers with the estimate of a write-off of tangible assets offset by insurance claims recoverable,” Keswick said.

The group expects the impact of this on the profitability to be modest. The company also paid an early termination fee in respect of the cessation of its management of the Las Vegas hotel from the end of August 2018.

In June 2017, the Group announced that consideration was being given to potential strategic options for The Excelsior, Hong Kong. The group is still considering all options for the site, including possible redevelopment as a commercial property

In light of the ongoing programme of renovations, an interim dividend of 1.50 US cents per share has been declared, unchanged from last year.