HPL’s earnings in Q1 inch up 0.3% to $14.3m

Tomlinson Heights, Maldives resorts posted weak contributions.

Hotel Properties Limited’s (HPL) profit after tax and minority interests (PATMI) in 1Q16 inched up by a meagre 0.3% YoY to $14.3m.

According to a report by OCBC, management attributes the weak growth from the quarter’s disappointing topline, which dipped 9.6% to $143.7m. This, in turn, is on back of reduced contributions from the Tomlinson Heights development as well as the group’s Maldives resorts.

In addition, management underscores that two hotels were closed intermittently over the quarter. Four Seasons Resort Bali at Jimbaran Bay is currently seeing a major refurbishment while Holiday Inn at Vanuatu has been shut down for repairs following a cyclone in March 2015.

OCBC further notes that HPL’s share of results of joint ventures and associates improved to $3m in this quarter, from a loss of $3.9m in 1Q15. This is due largely to stronger number from Four Seasons Seychelles and Four Seasons Hotel The Westcliff in Johannesburg, as well as decreased losses from Four Seasons Hotel Shanghai which was divested July 2015.

“We are heartened by the stable set of results over the latest quarter which reflects resilience of the recurring income generated by the group’s diversified hotel segment. That said, management indicates that the global economic outlook remains uncertain and expects the year ahead to be a challenging one across various business sectors,” OCBC observes.

“With a healthy balance sheet with S$113.1m in cash and a net gearing of 46.4% as at end Mar 16, the group remains well positioned to capitalize on investment opportunities should we see any severe dislocations ahead,” adds OCBC.