HK&S HOTELS(HK:00045)2024-08-07 04:04Financial Performance - Total revenue for the six months ended June 30, 2024, increased by 82% to HKD 4.931 billion, primarily driven by HKD 1.7 billion from the sale of four units of the London Peninsula residential apartments[2]. - Shareholders' attributable loss recorded was HKD 448 million, with a basic loss of HKD 257 million for the same period[3]. - Adjusted net asset value per share decreased by 2% to HKD 24.38 as of June 30, 2024, compared to HKD 24.92 as of December 31, 2023[2]. - Operating profit before interest, tax, depreciation, and amortization (EBITDA) was HKD 580 million, reflecting a 16% increase compared to the previous year[4]. - The group reported a consolidated revenue increase of 89% to HKD 4.6 billion for the first half of 2024, while EBITDA (excluding pre-opening and project expenses) rose by 16% to HKD 580 million[5]. - The group recorded a loss attributable to shareholders of HKD 448 million, compared to a profit of HKD 94 million in the same period last year, reflecting a basic loss of HKD 257 million versus a basic profit of HKD 25 million last year[5]. - The group reported a net loss attributable to shareholders of HKD 448 million for the six months ended June 30, 2024, compared to a profit of HKD 94 million in the same period of 2023[103]. Debt and Financing - The net external debt to total assets ratio improved to 25%, down from 26%[3]. - Net financing costs increased to HKD 237 million due to the cessation of capitalizing interest related to the London Peninsula Hotel project and high interest rates[3]. - The average interest coverage ratio improved to 1.3x, up from 1.0x in the previous year[4]. - The group's net financing costs increased to HKD 237 million due to the cessation of capitalizing interest related to the London Peninsula Hotel project and high interest rates[6]. - The group's interest-bearing loans decreased by 7% to HKD 14,811 million, down from HKD 15,914 million[67]. - The average cost of debt increased to 4.72% as of June 30, 2024, compared to 4.38% at the end of 2023[77]. Cash Flow and Liquidity - Cash flow from operating activities showed a net inflow of HKD 1.853 billion, a significant increase of 453% compared to the previous year[4]. - The group has a credit facility of HKD 2.4 billion and cash and bank balances of HKD 756 million, indicating sufficient liquidity to meet operational needs[46]. - Net cash inflow after deducting normal capital expenditures increased significantly to HKD 1,749 million in 2024 from HKD 373 million in 2023, marking a growth of 368.4%[75]. - The company reported a net cash outflow from investment activities of HKD 731 million for the six months ended June 30, 2024, compared to HKD 1,396 million in 2023, showing a reduction in capital expenditures[87]. - Total cash and cash equivalents as of June 30, 2024, amounted to HKD 560 million, a decrease from HKD 597 million in 2023, reflecting a net decrease of 6.2%[88]. Property and Investment Performance - The group recorded an investment property revaluation loss of HKD 139 million for the six months ended June 30, 2024[3]. - The group experienced a property revaluation loss of HKD 139 million for the six months ended June 30, 2024, compared to a revaluation gain of HKD 222 million in the same period last year[6]. - The fair value of the group's hotel properties as of June 30, 2024, is estimated at HKD 39,707 million, compared to HKD 39,232 million as of December 31, 2023, indicating a slight increase[69]. - The total market value of the group's properties is HKD 62,442 million as of June 30, 2024, compared to HKD 62,205 million as of December 31, 2023[69]. - The group has 100% ownership of the London Peninsula Hotel project, which includes a hotel with 190 rooms and 24 luxury residential apartments[110]. Hotel Operations - The Hong Kong Peninsula Hotel achieved revenue of HKD 517 million, a 9% increase, with an average room rate increase of 19% and a 21% increase in revenue per available room[11]. - The London Peninsula Hotel opened on June 18, 2024, marking a significant milestone in the company's 157-year history[5]. - The hotel division's revenue rose by 18% to HKD 2,490 million, despite a significant decline in revenue from the New York Peninsula Hotel due to renovation[55]. - The hotel achieved an occupancy rate increase of 2 percentage points and a 10% rise in average room rates[13]. - Average revenue per available room (RevPAR) increased by 15%[13]. Market and Operational Challenges - The New York Peninsula Hotel's revenue decreased by 32% to HKD 226 million, reflecting operational challenges during renovations[9]. - The outlook for the group's business remains uncertain due to weak long-haul leisure travel market in Hong Kong and geopolitical tensions[41]. - The second half of the year is traditionally a peak season for multiple business markets, leading to cautious optimism for hotel operations[41]. Sustainability and Corporate Governance - The sustainable development strategy "Prestige Legacy 2030 Vision" integrates corporate responsibility into broader business strategies, focusing on enhancing guest experience, employee development, and community prosperity[38]. - The company has signed a total of HKD 12.7 billion in sustainable development-linked and green loans as of June 30, 2024[40]. - The group has achieved EarthCheck certification for its Peninsula Hotels, demonstrating strong environmental management processes[39]. - The company has launched its sustainability strategy "Vision 2030," focusing on enhancing guest experience, employee development, and community enrichment[140]. - The company adheres to all governance code provisions and best practices, except for the publication of quarterly financial results and disclosure of individual senior management remuneration[138]. Employee and Organizational Development - The company hired over 3,200 new employees in 2023 and continues its talent recruitment strategy into 2024[37]. - The number of specific readers on the Viva Engage platform increased by 53% to over 4,300 in the first half of 2024[36]. Future Plans and Developments - The company plans to renovate the shopping mall at Repulse Bay and explore new positioning for the Peak Tram[41]. - The company plans to continue its investment in the development of the London Peninsula Hotel project, with a capital expenditure of HKD 269 million reported for the first half of 2024[87]. - The group is exploring new dining and retail service options at The Peak Galleria to attract more tourists[31].