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Thai unrest hits resorts company's 4th-quarter profits

Publication Date : 28-02-2014


Fourth-quarter earnings at Banyan Tree Holdings fell 27 per cent to S$3.66 million (US$2.9 million) as income from its Thai resorts was hit by the political crisis in the country.

Revenue was just about flat at S$97.91 million, compared to S$97.46 million a year earlier.

"Many countries have issued travel advisories to Thailand which impacted the tourist arrivals," the company said in its results announcement.

Revenue per available room (RevPAR) for the company's resorts in Thailand decreased by 10 per cent in the quarter.

In contrast, the RevPAR for the Maldives resorts rose 20 per cent and the figure for the Seychelles surged 39 per cent.

RevPAR is a widely used performance indicator in the hotel and resorts industries.

Banyan Tree said that full-year earnings rose 22 per cent to S$18.15 million with revenue up 5 per cent at S$356.15 million.

Full-year turnover rose in the hotel investments segment, but fell in the property sales and fee-based segments.

The resorts in Thailand had recorded higher revenue in the first nine months prior to the return of political unrest in the fourth quarter.

Property sales revenue fell as the company completed and recognised fewer units.

"The ongoing strife in Thailand - the worst political crisis since 2010, when protests turned violent - has slowed down our business in the fourth quarter, the high season of the year," said executive chairman Ho Kwon Ping in a statement.

"However, we are comforted that we are able to reduce the adverse impact these events had on our results following our conscious efforts to rebalance our assets in the last few years."

Full-year earnings per share was 2.39 cents, up from 1.96 cents a year earlier.

Net asset value per share was 72 cents at December 31, unchanged from a year earlier.

The company declared a first and final dividend of one cent per share. A final dividend of 0.651 cent per share had been paid for the 2012 financial year.

Banyan Tree expects the first-quarter performance to be below that for the same period last year.

"We expect continuing political uncertainties in Thailand and this will affect our operations in the near term," it said.

"However, with the economies in the United States and Europe continuing to recover in 2014 and the active China market, we expect our operations outside Thailand to continue to perform favourably."

It added that property sales in Thailand may remain slow.

The results were announced early on Thursday morning.

Banyan Tree shares gained half a cent to 63.5 cents.

*US$1 = S$1.27


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