Mandarin Oriental International Ltd said its net profit for the first half to June fell 12 pct year-on-year to 48.7 mln usd as the temporary closure for renovation of the group’s flagship hotel, the Mandarin Oriental in Hong Kong, affected its operating performance. Chairman Simon Keswick said the impact of the renovation of Mandarin Oriental, Hong Kong has been to lower the hotel’s contribution to group EBITDA (earnings before interest, taxes, depreciation and amortization) by 26. 4 mln usd compared to the same period in 2005, according to AFX news wire.
The company reported that its EBITDA stood at 48.9 mln usd, down from 62. 7 mln usd a year earlier.
Keswick said, however, the impact of the renovation work was partly offset by increased contributions from other properties in the group.
“Market conditions remained favorable in the group’s key markets as room rates benefited from growing demand and limited new supply,” Keswick said in a statement.
The company’s net profit of 48.7 mln usd included a 35.0 mln usd gain from the disposal of the group’s interest in The Mark, New York, against last year’s 55.3 mln usd which included a disposal gain of 36.1 mln usd on the disposal of a property in Hawaii.
Total revenue from hotels under management amounted to 398.4 mln usd, up from 390.1 mln a year earlier.
Keswick noted that the Mandarin Oriental, Hong Kong is scheduled to reopen in late September with some 200 rooms and most of the public areas completed, while the full complement of 502 rooms is expected to be available by year-end.
” While revenues in the second half will continue to be affected by the Hong Kong renovation, overall market conditions in Mandarin Oriental’s key locations are expected to remain strong for the remainder of the year, ” he said.