大酒店(00045) - 2024 - 中期财报

Company Overview Portfolio Overview The Hongkong and Shanghai Hotels, Limited is a global luxury hotel, commercial, and residential property group, with core assets including 12 Peninsula Hotels worldwide, premium commercial properties in locations like Hong Kong and Vietnam, and club and services businesses such as The Peak Tram and golf clubs - The Group's core business involves owning and managing 12 Peninsula Hotels globally, located across Asia, the Americas, and Europe[5][58] Major Business Segments and Assets | Business Segment | Key Assets | | :--- | :--- | | Hotels | The Peninsula Hong Kong, The Peninsula Shanghai, The Peninsula Beijing, The Peninsula Tokyo, The Peninsula London, The Peninsula Istanbul, and 6 other hotels | | Commercial Properties | The Repulse Bay Complex (residential and retail), The Peak Tower (retail), St. John's Building (office), The Landmark (Vietnam, office and residential), etc | | Clubs and Services | The Peak Tram (Hong Kong), Quail Lodge & Golf Club (California, USA), Peninsula Merchandising, Tai Pan Laundry, etc | Financial and Operational Review Financial Highlights In H1 2024, the Group's total revenue increased by 82% to HKD 4.931 billion, driven by London Peninsula residential apartment sales, yet recorded a HKD 448 million loss attributable to shareholders and an underlying loss of HKD 257 million due to new hotel ramp-up costs, market softness, and increased finance costs Key Financial Indicators for H1 2024 | Indicator (HKD million) | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue^ | 4,931 | 2,704 | +82% | | Revenue | 4,615 | 2,445 | +89% | | EBITDA | 542 | 362 | +50% | | (Loss)/Profit Attributable to Shareholders | (448) | 94 | N/A | | Underlying (Loss)/Profit* | (257) | 25 | N/A | | (Loss)/Profit Per Share (HKD) | (0.27) | 0.06 | N/A |
| Indicator (Period End) | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Net Assets Attributable to Shareholders (HKD million) | 35,891 | 36,279 | -1% | | Net External Debt to Total Assets Ratio | 25% | 26% | -1pp | CEO's Review The CEO noted H1 2024 financial performance fell short of expectations, with underlying loss driven by New York hotel renovations, new hotel ramp-up costs, market softness, increased depreciation and finance costs, and investment property revaluation losses, despite the successful London Peninsula opening and residential sales, while maintaining confidence in the Group's robust financial position and long-term strategy - The Group's H1 performance was below expectations primarily due to underperforming hotels, new hotel ramp-up phases, a HKD 100 million increase in total depreciation, a rise in net finance costs to HKD 237 million, and a HKD 139 million investment property revaluation loss[17] - Despite short-term profitability challenges, the Group maintains a robust financial position with a 25% net external debt to total assets ratio and an A-grade credit rating from a Japanese credit rating agency[18] Hotels Division Performance The Hotels Division showed mixed performance, with strong initial results from new London and Istanbul hotels and robust recovery in Tokyo, but faced challenges in Hong Kong from reduced long-haul travelers and local spending shifts, while New York's revenue significantly declined due to renovations, with new hotel contributions offsetting some weaknesses - The Peninsula London grandly opened on June 18, 2024, completing the sale of 4 luxury residential apartments in H1, generating HKD 1.7 billion in proceeds, with its F&B operations performing strongly and the rooftop restaurant earning two Michelin stars[32] - The Peninsula New York's revenue decreased by 32% during the period due to significant renovation works, rendering an average of approximately 98 rooms unavailable[29] Selected Peninsula Hotels H1 2024 Revenue Performance (in local currency) | Hotel | Y-o-Y Revenue Change (Local Currency) | | :--- | :--- | | The Peninsula Tokyo | +26% | | The Peninsula Istanbul | +175% | | The Peninsula Hong Kong | +9% | | The Peninsula Beijing | +10% | | The Peninsula Paris | +8% | | The Peninsula New York | -32% | | The Peninsula Chicago | -3% | Commercial Properties Division Performance The Commercial Properties Division showed stable performance, with the core Repulse Bay Complex seeing increased revenue and occupancy due to residential demand recovery, The Peak Tower benefiting from a 51% revenue increase driven by significant tourist growth, while St. John's Building experienced a slight revenue decline due to a soft Hong Kong office market Commercial Properties H1 2024 Revenue Performance (in HKD million) | Property | Revenue (HKD million) | Y-o-Y Change | | :--- | :--- | :--- | | The Repulse Bay Complex | 286 | +7% | | The Peak Tower | 80 | +51% | | St. John's Building | 23 | -4% | Clubs & Services Division Performance The Clubs and Services Division demonstrated strong overall performance, with The Peak Tram's revenue increasing by 73% due to significantly higher patronage post-upgrade, Peninsula Merchandising recording a notable 58% growth, and Quail Lodge & Golf Club maintaining stable revenue year-on-year Clubs and Services H1 2024 Revenue Performance (in HKD million) | Business | Revenue (HKD million) | Y-o-Y Change | | :--- | :--- | :--- | | The Peak Tram | 147 | +73% | | Peninsula Merchandising | 60 | +58% | | Tai Pan Laundry | 32 | +18% | | Quail Lodge & Golf Club | 58 | 0% | Outlook The Group maintains cautious optimism for H2 business prospects, anticipating a traditional peak season across multiple markets, yet acknowledges uncertainties from a soft Hong Kong long-haul tourism market, geopolitical tensions, and evolving local consumption patterns, while remaining committed to its long-term strategy of investing in existing assets and enhancing brand value - The Group holds cautious optimism for the H2 hotel business, as the success of new hotels in London and Istanbul will enhance its brand recognition in Europe[45] - The Hong Kong market faces challenges, including a weak long-haul leisure travel segment and the potential impact of local residents' cross-border spending on room and F&B revenue[45] Financial Review This section provides an in-depth analysis of the Group's H1 2024 financial position, where significant total revenue growth was primarily driven by HKD 1.7 billion in London residential sales, though underlying business profitability declined after excluding this and other non-recurring items, detailing revenue and EBITDA contributions by segment and region, alongside balance sheet, cash flow, and treasury management, highlighting the Group's robust financial structure amidst profitability pressures - If hotels and golf courses were accounted for at fair value, the Group's adjusted net assets attributable to shareholders would reach HKD 40.641 billion, 13% higher than the carrying value[51][52] - The Group recorded an underlying loss of HKD 257 million, primarily adjusted for a HKD 153 million investment property valuation loss and HKD 38 million in pre-opening and project expenses[53][54] - Net finance costs significantly increased from HKD 129 million in the prior period to HKD 366 million, mainly due to the cessation of interest capitalization following The Peninsula London's opening[56][57] Revenue and EBITDA Analysis In H1 2024, the Group's total revenue reached HKD 4.931 billion, an 82% increase, with Commercial Properties revenue surging 464% due to London residential sales, Hotels revenue growing 18%, and Clubs and Services revenue up 42%, while the Americas and Europe region saw the largest revenue increase of 227%, contributing most to the 17% rise in total EBITDA to HKD 620 million, though EBITDA declined excluding residential sales Total Revenue by Business Segment (HKD million) | Business Segment | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Hotels | 2,490 | 2,114 | +18% | | Commercial Properties | 2,142 | 380 | +464% | | Clubs and Services | 299 | 210 | +42% | | Total | 4,931 | 2,704 | +82% | Total EBITDA by Business Segment* (HKD million) | Business Segment | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Hotels | 258 | 364 | -29% | | Commercial Properties | 368 | 190 | +94% | | Clubs and Services | (6) | (22) | +73% | | Total | 620 | 532 | +17% | *Excluding pre-opening and project expenses Balance Sheet and Property Value As of June 30, 2024, the Group's net assets attributable to shareholders were HKD 35.891 billion, with net assets per share at HKD 21.53, total assets at HKD 56.031 billion, fixed assets comprising the majority at HKD 48.405 billion, properties held for sale decreasing from HKD 4.382 billion to HKD 2.955 billion due to London residential sales, and total interest-bearing loans at HKD 14.811 billion - The Group's property portfolio has a total fair value of HKD 62.442 billion compared to a total carrying value of HKD 54.294 billion, indicating significant unrealized appreciation[71] Key Balance Sheet Items (HKD million) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Fixed Assets | 48,405 | 48,832 | | Properties Held for Sale/Development | 2,955 | 4,382 | | Total Assets | 56,031 | 57,869 | | Interest-Bearing Loans | (14,811) | (15,914) | | Net Assets | 35,992 | 36,379 | | Shareholders' Funds | 35,891 | 36,279 | Cash Flow and Treasury Management H1 net cash inflow from operating activities was HKD 1.853 billion, primarily driven by London residential sales proceeds, with capital expenditures mainly directed towards hotel projects in London, Istanbul, and New York; the Group's treasury management remains robust, with net borrowings reduced to HKD 14.1 billion, a net debt to total assets ratio of 25%, and HKD 2.4 billion in undrawn credit facilities, ensuring ample liquidity - Proceeds from the sale of The Peninsula London residential apartments amounted to HKD 1.707 billion, serving as the primary source of cash inflow in H1[77] - The Group's net borrowings (excluding lease liabilities) decreased to HKD 14.1 billion, with an average credit maturity of 1.4 years, and 74% of committed credit facilities are green or sustainability-linked loans[78] - After hedging, the weighted average interest rate for the period increased to 4.72% (from 4.38% at end-2023)[79] Corporate Governance and Other Information Corporate Governance and Board Changes The Group emphasizes its commitment to high standards of corporate governance and compliance with the Stock Exchange's Corporate Governance Code, with significant board and senior management changes during and after the period, including the appointment of a Chief Financial Officer, the retirement and succession of the Chief Operating Officer, and the planned retirement of the Chief Executive Officer, indicating a management transition period - The Group confirmed compliance with all code provisions of the Corporate Governance Code in H1 2024[81] - Significant changes occurred within the Board and senior management: - Mr. Peter Borer, Chief Operating Officer, retired on July 31, 2024, succeeded by Mr. Rory Murphy - Mr. Clement Kwok, Chief Executive Officer, will retire on October 31, 2024, with the company actively seeking a successor[86] Directors' and Major Shareholders' Interests The report discloses directors' and major shareholders' interests in the company's shares, with Sir Michael Kadoorie and his family holding approximately 51.57% controlling interest through trusts, and lists other major shareholders with over 5% stake, such as Sino Hotels (Holdings) Limited - Chairman Sir Michael Kadoorie and his family members are deemed to have an interest in 859,625,063 shares, representing 51.57% of the total issued shares of the company[89][90] - Sino Hotels (Holdings) Limited and its associates hold 85,909,519 shares, representing 5.15% of the issued shares of the company[94] Interim Dividend Due to the company recording an underlying loss, the Board of Directors decided not to declare an interim dividend for 2024 - The Board resolved not to declare an interim dividend for the six months ended June 30, 2024 (H1 2023: nil)[98] Interim Financial Report Consolidated Financial Statements This section presents the unaudited consolidated statement of profit or loss, statement of comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows, showing that despite significant revenue growth from residential sales, increased operating costs, depreciation, and finance expenses led to a net loss, while the balance sheet indicates a slight asset contraction and the cash flow statement reflects residential sales proceeds offsetting substantial project investment outlays Consolidated Statement of Profit or Loss Summary (HKD million) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 4,615 | 2,445 | | Operating Profit | 209 | 129 | | Loss/Profit Before Tax | (380) | 143 | | Loss/Profit for the Period | (448) | 95 | | Loss/Profit Per Share (HKD) | (0.27) | 0.06 | Consolidated Statement of Financial Position Summary (HKD million) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 56,031 | 57,869 | | Total Liabilities | (20,039) | (21,490) | | Net Assets | 35,992 | 36,379 | Condensed Consolidated Statement of Cash Flows Summary (HKD million) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 1,853 | 335 | | Net Cash Outflow from Investing Activities | (731) | (1,396) | | Net Cash (Outflow)/Inflow from Financing Activities | (1,259) | 1,092 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (137) | 31 | Notes to the Financial Report The notes provide detailed explanations and supplementary information to the financial statements, including segment reporting data showing revenue and profitability for Hotels, Commercial Properties, and Clubs and Services, an investment property revaluation loss of HKD 139 million, and a residential unit sale transaction with an associate of the Chairman's family - Segment reporting indicates the Hotels division contributed HKD 2.174 billion in revenue, the Commercial Properties division contributed HKD 2.142 billion (including residential sales), and the Clubs and Services division contributed HKD 299 million[112] - A net loss of HKD 139 million from investment property revaluation was recognized in the consolidated statement of profit or loss[124] - The Group completed the sale of a Peninsula London residential apartment unit to a company controlled by major shareholder Sir Michael Kadoorie's family, with the transaction value of GBP 28.75 million recognized as revenue[147] Review Report and Shareholder Information Review Report to the Board of Directors KPMG, the auditor, has reviewed this interim financial report and found no matters suggesting it was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - The auditor concluded that nothing came to their attention to suggest the interim financial report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[150]