Results

"The reopening of the London hotel and the addition of the Rafael hotels will contribute positively to results, although this will be partially offset by higher finance costs. The Group's results in the second half of the year will also benefit from the continued recovery in Hong Kong."

Simon Keswick, Chairman
27th July 2000

The interim dividend of US¢0.50 per share will be payable on 18th October 2000 to shareholders on the register of members at the close of business on 25th August 2000. The ex-dividend date will be on 23rd August 2000, and the share registers will be closed from 28th August to 1st September 2000, inclusive.

Mandarin Oriental International Limited today announced that the first half of the year saw a significant step forward in the development of the Group with the acquisition of The Rafael Group, increasing its room portfolio from 5,800 to 7,000, and with the reopening of the London hotel following an extensive renovation programme.

PERFORMANCE

Mandarin Oriental's performance in the six months benefited from the continued recovery in its Hong Kong hotels. However, this was more than offset by operating costs associated with the closure of the London hotel. As a result, consolidated profit before interest and tax for the six months ended 30th June 2000 was US$18 million compared with US$21 million in the first half of 1999. Higher interest and tax charges also contributed to the lower consolidated profit after tax and minority interests at US$3 million, compared with US$9 million in 1999.

Earnings per share for the half year were US¢0.32, a decrease of 75% from US¢1.28 in 1999.

The Board has declared an interim dividend of US¢0.50 per share which is unchanged from 1999. The dividend will be payable in cash.

GROUP REVIEW

Turning to the operations, the Chairman, Simon Keswick, said that improved performances from the Group's Hong Kong hotels were led by Mandarin Oriental, Hong Kong which increased its occupancy to 76% in the first six months of 2000 compared with 62% in 1999. Occupancy at The Excelsior continued to be strong at 86%. Average room rates at the two hotels improved but remained below levels achieved before the economic downturn.

In the rest of Asia, the hotels in Manila and Jakarta were affected by continuing economic uncertainty while the hotels in Singapore and Macau performed satisfactorily. The Oriental, Bangkok did well despite the commencement of a self-financed US$30 million rooms renovation programme in mid-May. The renovations will be carried out over a two-year period during the summer months.

In London, Mandarin Oriental Hyde Park reopened in late May and has shown encouraging results to date. The renovation programme, costing approximately £50 million since acquisition, was more extensive than anticipated due to the degree of complexity in improving the structure of this heritage building. A state-of-the-art spa facility will open in the autumn to complete the repositioning of this property as one of London's finest hotels.

Results from the Group's North American hotels continued to improve. In particular, Kahala Mandarin Oriental, Hawaii increased its occupancy from 56% to 67% while maintaining its average room rate.

The results of the newly acquired Rafael hotels had no material effect on the half year as the results were consolidated only from late May when the acquisition was completed. June results were in line with expectations.

Corporate resources have been strengthened to support the Group's growth strategy. A US office has been established to provide management services to the Group's growing North American portfolio. The Group's new brand advertising campaign was launched and the sales force was increased significantly in major regional centres.

DEVELOPMENTS

The Group acquired The Rafael Group, an operator of six distinctive luxury hotels in North America and Europe. The consideration for the acquisition was US$143 million which was financed out of proceeds from a Rights Issue in early 2000 of approximately US$150 million.

Mandarin Oriental, Miami is on schedule to open in late 2000 and work is progressing on Mandarin Oriental, New York, scheduled to open in late 2003.

The Group's strategy remains focussed on positioning Mandarin Oriental as one of the world's leading luxury hotel brands with a growing presence in North America and Europe. The objective is to increase the number of rooms under operation to 10,000 and a number of opportunities are being pursued.

OUTLOOK

In conclusion, Simon Keswick said, "The reopening of the London hotel and the addition of the Rafael hotels will contribute positively to results, although this will be partially offset by higher finance costs. The Group's results in the second half of the year will also benefit from the continued recovery in Hong Kong."

No interim valuations of the Group's properties have been undertaken. Stated values at 30th June 2000 and 1999 reflect the values at the previous 31st December. However, properties acquired from The Rafael Group were stated at fair value at acquisition on 19th May 2000.

The unaudited interim condensed financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 - Interim Financial Reporting. The accounting policies used in the preparation of the interim condensed financial statements are consistent with those used in the annual financial statements for the year ended 31st December 1999.

2. REVENUE

3. OPERATING PROFIT

4. SHARE OF OPERATING RESULTS OF ASSOCIATES AND JOINT VENTURES

5. TAXATION

Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates. Taxation includes United Kingdom tax credit of US$865,000 (1999: US$1,300,000).

6. EARNINGS PER SHARE

Basic earnings per share are calculated on the profit after tax and minority interests of US$2.5 million (1999: US$9.3 million) and on the weighted average number of 789.3 million (1999: 726.6 million) shares in issue during the period. The weighted average number excludes the Company's shares held by the Trustee under the Company's Senior Executive Share Incentive Schemes.

Diluted earnings per share are calculated on the weighted average number of shares after adjusting for the number of shares which are deemed to be issued for no consideration under the Senior Executive Share Incentive Schemes based on the average share price during the period. The convertible bonds are anti-dilutive and therefore are ignored in calculating diluted earnings per share.

7. ACQUISITION

On 19th May 2000, the Group acquired 100% of the share capital of The Rafael Group Limited which is a hotel investment and management company incorporated in Bermuda. The consideration of US$147.7 million, including acquisition costs, was settled in cash. The fair value of the net identifiable assets of the company at the date of acquisition was US$123.5 million. The resulting goodwill of US$24.2 million will be amortised on a straight line basis over 20 years. The acquired business contributed revenue of US$4.5 million and operating profit of US$0.5 million to the Group for the period from 19th May 2000 to 30th June 2000.

The assets and liabilities arising from the acquisition are as follows:

There are no other significant changes in the composition of the Group during the first six months of 2000.

8. TANGIBLE ASSETS AND CAPITAL COMMITMENTS

9. BORROWINGS

i) Bank borrowings

The movements in bank borrowings can be analysed as follows:

ii) Convertible bonds

6.75% convertible bonds were issued by the Group in March 2000. Proceeds of the bonds were used to finance the acquisition of The Rafael Group. The bonds are due in 2005 and convertible up to and including 23rd February 2005 into fully paid ordinary shares of the Company at an initial conversion price of US$0.671 per ordinary share.

10. SHARE CAPITAL AND SHARE PREMIUM

On 17th March 2000, the Group issued 145,660,854 ordinary shares at US$0.51 per ordinary share to finance the acquisition of The Rafael Group.

11. DIVIDENDS

An interim dividend in respect of 2000 of US¢0.50 (1999: US¢0.50) per share amounting to US$4.3 million (1999: US$3.5 million) is declared and will be accounted for as an appropriation of revenue reserves in the year ending 31st December 2000.

12. INTERIM REPORT

The Interim Report will be posted to shareholders on or about 25th August 2000. Copies may be obtained from Jardine Matheson International Services Limited, P.O. Box HM 1068, Hamilton HM EX, Bermuda; Capita 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 interim dividend of US¢0.50 per share will be payable on 18th October 2000 to shareholders on the register of members at the close of business on 25th August 2000. The ex-dividend date will be on 23rd August 2000, and the share registers will be closed from 28th August to 1st September 2000, inclusive. Shareholders will receive their dividends in United States Dollars, unless they are registered on the Jersey branch register where they will have the option to elect for Sterling. These shareholders may make new currency elections by notifying the United Kingdom transfer agent in writing by 28th September 2000. The Sterling equivalent of dividends declared in United States Dollars will be calculated by reference to a rate prevailing ten business days prior to the payment date. 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.

For further information, please contact:

Mandarin Oriental Hotel Group International Limited

Edouard Ettedgui / John Witt	(852) 2895 9288
Chantal Hooper	(852) 2895 9160

Forrest International Limited

David Dodwell / Cynthia Ma

(852) 2522 6475

This and other Group announcements can be accessed through the Internet at "www.irasia.com/listco/sg/mandarin".

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