| To: Business Editor | 18th March 1998 For immediate release |
The following announcement was today issued to the London Stock Exchange.
MANDARIN ORIENTAL INTERNATIONAL LIMITED
1997 PRELIMINARY ANNOUNCEMENT OF RESULTS
Results
"Against the background of difficult business conditions and declining travel and tourism in the Asia Pacific, the overall outlook for 1998 is not encouraging."
Simon Keswick, Chairman
18th March 1998
The final dividend of US¢1.85 per share will be payable on 17th June 1998, subject to approval at the Annual General Meeting to be held on 10th June 1998, to Shareholders on the register of members at the close of business on 9th April 1998 and will be available in cash with a scrip alternative. The share registers will be closed from 13th to 17th April 1998, inclusive.
MANDARIN ORIENTAL INTERNATIONAL LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 1997
PERFORMANCE
Mandarin Oriental International Limited today announced that its consolidated net profit after taxation and minority interests for the year ended 31st December 1997 was US$45 million, a decrease of 25% from 1996. A non-recurring provision of US$9 million in respect of the Group's investment in Hotel Majapahit in Surabaya, Indonesia was a significant contributing factor to the reduction in profit. Excluding this non-recurring item, net profit after taxation for 1997 declined by 10% to US$54 million.
Earnings per share were US¢6.41, a decline of 26%. Excluding the non-recurring item, earnings per share would have declined by 11% to US¢7.72.
A Directors' review of the valuation of the Group's hotel properties at the end of 1997 has indicated that the significant increase in values shown in 1996 has now been reversed. Net asset value per share was, therefore, US$1.37, a decrease of 24%.
In view of the Group's capital commitments and the depressed current state of the tourist and travel industry throughout the Asian Region, the Board has decided to reduce the dividend. Accordingly the Directors recommend a final dividend of US¢1.85 per share, payable in cash with a scrip alternative, which, together with the interim dividend of US¢1.65 per share, will make a total annual dividend of US¢3.50 per share, a decrease of 44% from 1996.
GROUP REVIEW
Turning to the operations, the Chairman, Simon Keswick said that the overall picture for the Group was of a strong first half followed by a steep decline in the second half, as Asia's economic crisis began to bite. This was particularly apparent in the Group's two Hong Kong hotels. Mandarin Oriental, Manila continued its profit growth into the second half of 1997, although lower economic activity and a weakening exchange rate in the Philippines began to affect its performance adversely towards the end of the year.
Having acquired Mandarin Oriental Hyde Park, London in late 1996, the Group has embarked on a renovation programme to establish its position as one of London's premier luxury hotels.
The Group's associate hotels in Southeast Asia were adversely affected by a combination of declining overseas visitors and the effects of falling exchange rates. In these circumstances, only The Oriental, Singapore achieved an increased profit contribution in 1997. In view of an unprecedented deterioration in the Indonesian market, the Group has made full provision in respect of its 25% interest in the Surabaya hotel. The reduction in tourist traffic from Japan had an impact in Hawaii, although Kahala Mandarin Oriental achieved an improved performance over 1996.
DEVELOPMENTS
Work is progressing towards a partial opening of the new Mandarin Oriental, Kuala Lumpur in the middle of 1998. When fully opened, the 645-room hotel will provide the Group with the premium location in this important Asian market, although the hotel's initial performance will inevitably be affected by the current economic climate.
In January 1998, the Group announced a joint venture with Swire Properties which will develop a 325-room Mandarin Oriental hotel in Miami, Florida, taking its deluxe brand into a new market. This 25%-owned hotel is expected to open in 2001 and will be managed by the Group.
OUTLOOK
In conclusion, Simon Keswick said, "Against the background of difficult business conditions and declining travel and tourism in the Asia Pacific, the overall outlook for 1998 is not encouraging."
Mandarin Oriental International Limited
Notes
1 BASIS OF PREPARATION
The financial information contained in this announcement has been based on the audited results for the year ended 31st December 1997 which have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and in conformity with International Accounting Standards on the basis of accounting policies set out in the Financial Statements.
2 SEGMENTAL INFORMATION
3 NON-RECURRING ITEM
Provision against Hotel Majapahit, Surabaya includes a write-off of its carrying value and provision for commitments in respect of a guarantee of a bank loan to the hotel.
4 TAXATION
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
5 EARNINGS PER SHARE
Earnings per share are calculated on the profit after taxation and minority interests of US$45.0 million (1996: US$60.1 million) and on the weighted average number of 701.7 million (1996: 694.3 million) shares in issue during the year. The weighted average number excludes shares held by the Trustee of the Senior Executive Share Incentive Schemes.
Earnings per share excluding non-recurring item are calculated on the profit after taxation and minority interests and after adjusting for the non-recurring item of US$9.2 million (1996: nil).
Full exercise of the options under the Schemes would not result in a material dilution of earnings per share.
6 CASH FLOW PER SHARE
Cash flow per share is calculated on the cash flows from operating activities of US$78.9 million (1996: US$80.2 million) and on the weighted average number of shares of 701.7 million (1996: 694.3 million) in issue during the year.
7 ACQUISITIONS
'Purchase of a subsidiary' in 1997 relates to the acquisition of additional 10.45% interest in Mandarin Oriental, Jakarta which became a subsidiary hotel in September 1997.
8 ANNUAL REPORT
The Annual Report will be posted to Shareholders on or about 7th May 1998. Copies may be obtained from Butterfield Corporate Services Limited, P.O. Box HM 1540, Hamilton HM FX, Bermuda; IRG plc, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU, England and M & C Services Private Limited, 16 Raffles Quay #23-01, Hong Leong Building, Singapore 048581.
The final dividend of US¢1.85 per share will be payable on 17th June 1998, subject to approval at the Annual General Meeting to be held on 10th June 1998, to Shareholders on the register of members at the close of business on 9th April 1998 and will be available in cash with a scrip alternative. The share registers will be closed from 13th to 17th April 1998, inclusive. Shareholders will receive their cash dividends in United States Dollars. Shareholders registered on the United Kingdom branch register also have the option to elect for Sterling calculated by reference to a rate prevailing ten business days prior to the payment date. Such Shareholders may make new currency elections by notifying any one of the Company's registrars or the UK transfer agent in writing by 29th May 1998. Shareholders holding their shares through The Central Depository (Pte) Limited ("CDP") in Singapore will receive United States Dollars unless they elect, through CDP, to receive Singapore Dollars or the scrip alternative.
- end -
For further information, please contact:
| Mandarin Oriental Hotel Group International Limited Robert E. Riley Stuart Burnett |
(852) 2895 9188 (office) (852) 2895 9288 (office) |
| Ludgate Asia Limited Martin Spurrier |
(852) 2543 5413 (office) |
Full text of the Preliminary Announcement of Results and the Preliminary Financial Statements for the year ended 31st December 1997 can be accessed through the Internet at "http://www.irasia.com/listco/sg/mandarin". This announcement is also available through "First Call".
| © Copyright 1996-2008 irasia.com Ltd. All rights reserved. Tel: (852) 2831-9792. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |