SINGAPORE (Feb 23): Banyan Tree Holdings, the manager and developer of luxury hotels, resorts and spas in Asia, has declared $8.5 million in 4Q earnings on higher operating profit – a turnaround from the $18.4 million loss posted in 4Q15.
Revenue for the quarter fell 35% to $81.3 million from $123.2 million a year ago, mainly due to lower revenue recognition from property sales. This largely resulted from the absence of substantial profit recognitions from Cassia Phuket and Laguna Park Phuket as income from their sold units were recognised over the course of 3Q15 and 4Q15 when the keys were progressively handed over.
Notwithstanding lower revenue, operating profit grew 22-fold to $36.8 million over 4Q16 as Banyan Tree recognised higher contributions from its hotel investments segment, largely because of strong performances from the group’s resorts in Thailand.
In addition to lower provision on delinquent debts, the increase in operating profit was also due to Thai Wah Public Company Limited’s incorporation as the group’s associate in Dec 2016. This resulted in the reclassification of net fair value gains to other income, which grew significantly to $26.7 million from $1.9 million a year ago.
In its outlook, Banyan Tree says it expects its recent alliance with AccorHotels to contribute positively in the medium term through additional co-development projects around the world.
The group also anticipates potential benefits and income relating to valuation gains and asset consolidation, among others, to arise from its recent partnership with China Vanke Co.
(See also: Banyan Tree enters into strategic collaboration with AccorHotels)
(See also: Banyan Tree forms JV with Vanke to consolidate China assets)
“2017 signals the start of a transformational change for Banyan Tree,” said Ho Kwon Ping in the group’s filing to the SGX on Wednesday evening.
“As a Singapore company, we are proud that our brands have attracted two world class partners – Accor, one of the world’s largest listed hotel companies, and Vanke, the largest listed property developer in China – to co-develop our brands and venture into new areas such as senior care, around the world. The transformation of Singaporean companies – and Banyan Tree – in partnership with global partners heralds an exciting new future.”
As at 12.20pm, shares of Banyan Tree are trading 1.03% at 43 cents.
