HK&S HOTELS(HK:00045)2021-03-31 09:41Financial Performance - Total revenue for 2020 was HKD 2,710 million, a decrease of 54% compared to HKD 5,874 million in 2019[14]. - The company reported a loss attributable to shareholders of HKD 1,940 million, compared to a profit of HKD 494 million in the previous year[14]. - The basic loss per share was HKD 1.18, a significant decline from a profit of HKD 0.30 in 2019[14]. - The total assets increased by 1% to HKD 53,679 million from HKD 53,061 million in 2019[14]. - The company did not declare any dividends for 2020, compared to HKD 212 million in dividends declared in 2019[14]. - The interest coverage ratio was -14.6x, a significant decline from 20.5x in 2019[14]. - The EBITDA loss for the year was HKD 61 million, resulting in an overall operating loss of HKD 614 million[19]. - The company reported a net loss attributable to shareholders of HKD 1,940 million, which includes a HKD 236 million impairment provision for the Istanbul Peninsula Hotel[19]. - The company’s retained earnings decreased to HKD 30,940 million by the end of 2020, down from HKD 33,705 million at the beginning of the year[20]. - The group reported a basic loss attributable to shareholders of HKD 1,940 million for the year ended December 31, 2020[22]. - The group's investment properties experienced an unrealized revaluation loss of HKD 732 million, primarily due to impairments in the valuation of properties in Repulse Bay, Hong Kong, Beijing, New York Peninsula Mall, and Victoria Peak[23]. - The company reported a comprehensive loss of HKD 1,940 million for the year 2020, compared to a profit of HKD 1,510 million in the previous year, indicating a significant decline in performance[42]. Operational Challenges - The company faced significant challenges in 2020 due to the COVID-19 pandemic, resulting in a 94% decline in visitor numbers to Hong Kong[28]. - The company temporarily closed hotels in major cities including New York, Chicago, Paris, Tokyo, Bangkok, and Manila due to the pandemic[33]. - The company experienced significant challenges in the global hotel industry, leading to staff layoffs and voluntary unpaid leave, while extending medical benefits for affected employees[34]. - The company anticipates continued operational losses in 2021 due to the ongoing impact of the COVID-19 pandemic and geopolitical instability[49]. - The company is actively monitoring financial needs and maintaining adequate cash reserves to support development projects amid the pandemic's impact[42]. Revenue Declines - The company's total revenue decreased by 54% to HKD 2,710 million, with hotel segment revenue dropping by 62% to HKD 1,831 million due to pandemic-related closures and restrictions[16]. - The average revenue per available room and food and beverage income significantly declined compared to 2019 levels due to reduced operations in key markets[16]. - The commercial property segment's revenue decreased by 18%, primarily due to poor performance in the Repulse Bay project, which accounts for over 76% of the segment's income[16]. - The hotel segment revenue for the Hong Kong Peninsula Hotel was HKD 603 million, down 45% year-on-year, while the New York Peninsula Hotel saw a 73% decline in revenue to HKD 192 million[53]. - The Bangkok Peninsula Hotel and Manila Peninsula Hotel experienced revenue declines of 80% and 82%, respectively, highlighting the severe impact of the pandemic on the hospitality sector[53]. Cost Management - The company implemented cost-saving measures, achieving a total cost reduction of 38% compared to the previous year[33]. - The operating costs decreased by 38% to HKD 2,771 million, down from HKD 4,484 million in 2019[100]. - Employee salaries and related expenses decreased by 34% to HKD 1,511 million, accounting for 55% of total operating costs[104]. - The group implemented strict cost-cutting measures, including significant reductions in employee compensation and related expenses[104]. - The group received employment-related subsidies totaling HKD 130 million during the year[104]. Investments and Future Projects - The company continues to invest in new hotel projects despite supply chain issues and labor shortages, with ongoing developments in London, Istanbul, and Yangon[29]. - The company has committed to long-term investment in the Bangkok Peninsula Hotel following the acquisition of full ownership of the property[31]. - The company is committed to a significant capital expenditure plan, with budgets of GBP 800 million, EUR 150 million, and USD 130 million for new hotels in London, Istanbul, and Yangon, respectively[129]. - The company remains committed to maintaining a strong financial position and focusing on long-term investments in new hotel projects in London, Istanbul, and Yangon, expected to open in 2022[49]. Sustainability and Corporate Responsibility - The company aims to enhance its integrated reporting and sustainability practices in line with international standards[5]. - The company achieved over 91% of its corporate responsibility and sustainability goals despite operational challenges[15]. - The company has launched a 10-year sustainability strategy named "Prestigious Legacy 2030 Vision" to enhance its environmental, social, and governance standards[28]. - The company is committed to sustainable development, becoming a member of various organizations focused on global issues like climate change and plastic waste[153]. - The company has implemented sustainable development guidelines in new hotel and renovation projects, adhering to international environmental standards[153]. Awards and Recognition - The company received multiple awards in 2020, including the ARC Annual Report Awards, with accolades for best cover design and overall presentation[155]. - The Peninsula Hotels received multiple awards in 2020, including the title of "Best Business Hotel" by Business Traveler Magazine and "Top 10 Hotels in Hong Kong" by Condé Nast Traveler[156]. - The Hong Kong Peninsula Hotel was ranked 1st in the "Top 10 Best Hotels in Hong Kong" by Condé Nast Traveler and received a Michelin star for its Chinese restaurant, Gaddi's[156]. - The Shanghai Peninsula Hotel was awarded "Best City Hotel in Shanghai" and ranked 1st in the "Top 5 Best City Hotels" by Travel + Leisure in 2020[157]. - The Tokyo Peninsula Hotel achieved a 5-star rating from Forbes Travel Guide for its spa and hotel services[157]. Governance and Leadership - The company has implemented a robust governance framework to mitigate the impacts of the COVID-19 pandemic, with regular discussions on the pandemic's effects on business during board meetings[162]. - The board of directors has been restructured, with Mr. Matthew resigning as Executive Director and CFO in October 2020, and Mr. Yip being appointed as his successor in January 2021, bringing extensive experience in international investment and corporate finance[162]. - The company emphasizes governance and compliance, with independent non-executive directors overseeing audit and remuneration committees[194]. - The leadership team has a wealth of experience in the Asia-Pacific region, particularly in real estate and distribution sectors, enhancing operational understanding[187]. - The company is focused on leveraging its board members' expertise to navigate market challenges and capitalize on growth opportunities[200].