Unrest has hotel giant restlessBusiness | Stella Zhai 8 Aug 2019
Hongkong and Shanghai Hotels (0045) is worried about political uncertainty as underlying net profit fell 38.6 percent to HK$148 million in the first half.
Net profit plunged 59.7 percent to HK$254 million, primarily due to a 73.9 percent decline in its net property revaluation gain. Also a factor was a suspension of Peak Tram services for a major upgrade.
Earnings per share were 16 HK cents, down from 40 HK cents the previous year. An interim dividend of four HK cents per share was declared, compared to five HK cents in 2018.
Revenues fell 2 percent to HK$2.79 billion, with revenue from the Peninsula Hong Kong declining 7 percent to HK$617 million. The SAR occupancy rate slipped from 70 percent in the first quarter to 61 percent in the second.
The United States, the mainland and Japan remain its top three market segments, and the trade war hit occupancy rates, although the scale of this impact is difficult to quantify. Arrivals from Taiwan, South America and Eastern Europe increased during the period due to sales outreach in these markets.
Chief executive Clement Kwok King-man said "We are concerned about the effect this political uncertainty may have on our results, especially given the proportion of our income that is earned in Hong Kong. It should be noted that we are currently in dispute with the local partner concerning the future management arrangements for The Peninsula Bangkok and the Thai Country Club."