Hongkong and Shanghai Hotels looking at $900 million loss in 2024

Hongkong and Shanghai Hotels (0045), operator of Peninsula Hotels, warned of a loss of HK$900 million last year due to revaluation loss and increases in depreciation, impairments, and net financing charges.

By comparison, it saw a net profit of HK$146 million in 2023, the company said in a filing on Friday.

The underlying loss, which excludes the post-tax effects of unrealized property valuation movements, impairment provision, and other non-operating items will amount to around HK$200 million in 2024, a reversal of an underlying profit of HK$277 million from the previous year.

The company said it recorded a revaluation loss of about HK$600 million on its investment properties for 2024, a steep drop compared to a revaluation gain of HK$186 million for 2023.

Depreciation rose by about 30 percent over the past year, mainly attributed to The Peninsula London, which opened in September 2023.

Net financing charges also surged by about 150 percent, as the group no longer capitalized the interest on borrowings related to The Peninsula London project after its opening.

Meanwhile, the company made an impairment provision of approximately HK$160 million for its investment in The Peninsula Yangon project, as development work remains on hold with the outlook of Myanmar's tourism market continuing to be uncertain.

Shares were at HK$6.03, up by 0.17 percent before the earnings were disclosed.

STAFF REPORTER