Miramar Hotel and Investment Company, Limited Announces 2018 Annual Results

March, 19/2019 - 06:14
Miramar Hotel and Investment Company, Limited Announces 2018 Annual Results

PBT Exceeds HKD1,000 Million with Overall Steady Growth

 

HONG KONG, CHINA - Media OutReach - 18 March 2019 - Miramar Hotel andInvestment Company, Limited (the "Company") and its subsidiaries (collectively, the "Group"), HKSE stock code: 71, announced todaythe annual results for the year ended 31 December 2018.

 

 

HK$ Million

For the year ended 31 December

2018

2017

Change

Revenue

3,199

3,186

+0.4%

Profit attributable to shareholders

1,624

1,519

+6.9%

Underlying profit attributable to shareholders*

828

764

+8.4%

Basic underlying earnings per share (HK$)

1.20

1.27

-5.5%

Dividend per share (HK Cents)

Final dividend per share

Interim dividend per share

 

37

24

 

36

23

 

+2.8%

+4.3%

* Underlying profit attributable to shareholders andunderlying earnings per share (basic) excluded the post-tax effects of theinvestment properties reevaluation movements and other non-operating andnon-recurring items such as net gain on disposal / liquidation of a subsidiary

 

TheGroup's revenue for the year amounted to HK$3,199 million, representing anincrease of 0.4% compared to last year (2017: HK$3,186 million).  Profit attributable toshareholders for the year increased by 6.9% to HK$1,624 million (2017: HK$1,519million). Mr. Lai Ho Man, Director of Group Finance, said, "This growth is mainlyattributable to the satisfactory performance of both the property rentalsegment and hotels and serviced apartments segment, with additionalcontribution from revaluation gain of investment properties." 

 

Excluding the net increase of HK$783 million inthe fair value of our investment properties and net gain from non-corebusinesses, the basic underlying profit attributable to shareholders* increasedby 8.4% to approximately HK$828 million (2017: HK$764 million). The underlyingearnings per share (basic) dropped by 5.5% to HK$1.20 (2017: HK$1.27).  Excludingthe effect of the increased number of shares issued in the beginning of the yearpursuant to the bonus warrant scheme, basic underlying earnings per share wouldhave shown a growth in line with the underlying profit attribute toshareholders.

 

The Board is pleased to recommend a final dividend ofHK37 cents pershare payable to shareholders whose names are on the Register of Members as at18 June 2019. Including an interim dividend of HK24 cents per share paid on 16October 2018, the total dividend payment for the whole year will be HK61 cents pershare.

 

Hong Kong's economy was booming in the first half of 2018 but growthmomentum slowed down in the second half of the year.  In respect of hotels and serviced apartmentsbusiness, the Group adopted a dynamic revenue management strategy, based onmarket supply and demand and state of competition, resulting in improvedoperational efficiency. Our property rental business has achieved a respectableperformance as the Group continually optimized the tenant mix of the shoppingmall and office tower and enhanced the quality of services, affording tenantsand customer solicitous services and gleeful shopping experience. For food andbeverage business, we continued to adjust our business strategies in responseto changes in rental levels and market preferences for different brands. Inregard to travel business, the performance is encouraging due to proactivecontrol of operating costs and responsive strategies pursued to tackle changingdestination preferences of the customers.

 

Hotels and Serviced Apartments Business

In2018, overnight visitor arrivals increased by 4.9% compared to last year.  Occupancy rates of hotels in Tsim Sha Tsuiarea and hotels in the Tariff A category both increased compared to last year.Our hotels and serviced apartments business recorded satisfactory results inboth revenue and EBITDA (earnings before interest, taxes, depreciation andamortisation).


Duringthe year, the management adopted dynamic marketing and pricing strategies whichserved to increase the attractiveness and competitiveness of our hotels, andsucceeded in bringing about improved operational efficiency. Revenue hasincreased by 7.3% to HK$710 million compared to last year while EBITDA amountedto HK$265 million, representing an increase of approximately 6.9%.  Average occupancy rates of both The Mira HongKong and Mira Moon stayed at high levels and RevPAR (revenue per availableroom) registered satisfactory growth.

 

Property Rental Business

TheGroup's Property Rental business grew steadily during the year and recordedrevenue of HK$914 million and EBITDA of HK$807 million, rising by 6.5% and 7.1%respectively compared to last year. During the year, the Group continued to optimize the tenant mix of itsoffice and retail space.  Occupancy ratemaintained at a high level and rental income grew steadily.  The synergetic effect in the continuousupgrade of the shopping mall and offices has enabled stable appreciation of thetotal value of our properties.  The Groupdevoted relentless efforts towards enhancing the overall image and positioningof its property assets, continually improving its surroundings, upgrading itsservice quality and keeping the mall iconic for its unique personality anddynamism.  During the year, Mira Place hasupgraded its mobile application software to strengthen customer services andpromote interactions, and successfully launched Hong Kong's first smart parkingsolution "e-PARKING" as well as a number of popular promotional activitieswhich have driven up Mira Place's average yearly footfall by 18% and boostedtenants' sales revenue by 4%.  TheGroup's investment property portfolio recorded a net increase in fair value ofHK$783 million, amounting to HK$14.9 billion as at 31 December 2018.

 

Food and Beverage Business

The foodand beverage business recorded revenue of HK$319 million and EBITDA of HK$13million, which dropped by 19.2% and 44.1% respectively, due to a strategicrevamp through which the management closed certain shops that lackedoperational efficiency.  The Group'sChinese restaurants business has achieved good performance.  The business of the Western restaurants wasstable, and the management continued to actively raise service levels andimprove product quality, which showed promising progress. Next step themanagement will adopt effective methods to improve financial performance.  The Group's strategy is to improveoperational efficiency, improve product and service qualities, and to createnew dishes and new themes on a regular basis. In addition, the Group willcontinue to seek for new opportunities to properly implement the strategy ofbrand diversification.


Travel Business

Revenuefrom travel segment at HK$1,256 million was level with that in the prior yearbut EBITDA improved substantially to HK$60 million, registering an increase of108% due to proactive control of operating costs and responsive strategiespursued to tackle changing destination preferences of the customers.

 

Operating and otherexpenses and other revenue

TheGroup has further enhanced its operating efficiency and managed to keep theoverall operating costs stable at HK$237 million (2017: HK$227 million). Due tothe depreciation of Reminbi, exchange loss of HK$13 million (2017:exchange gain of HK$27 million) was recorded during the year. Other revenuecomprising mainly bank deposit interests increased to HK$49.2 million as aresult of a mild uptick in the interest rate levels. 

 

Corporate Finance

The Group maintains its conservative and sound financial policy withample cash and available banking facilities, enabling the Group to comfortablydeal with the uncertain economic environment in the foreseeable future and tofund opportune business development projects that promise good investmentreturns.  Gearing, calculated by dividingconsolidated total borrowings by the consolidated total shareholders' equity,was at only 0.1% as at 31 December 2018 (31 December 2017: 0.1%).  At 31 December 2018, total available creditfacilities amounted to approximately HK$1.3 billion (31 December 2017:approximately HK$1.3 billion), 0.2% (31 December 2017: 0.2%) of which have beenutilised. At 31 December 2018, consolidated net cash were at approximatelyHK$4.7 billion (31 December 2017: HK$3.4billion), of which HK$2.85 million weresecured borrowings (31 December 2017: HK$3 million). 

 

BusinessOutlook

In the second half of 2018, growth in the global economy has shown aslowing trend, under uncertainties that a consensual and comprehensive tradepact was not yet in sight in the Sino-US negotiations and likewise in theBrexit arrangements.  Mr. Lee Ka Shing,Chairman and CEO of the Company, has concluded, "Looking forward to 2019, theglobal political and economic environment remains confronted by a wide varietyof uncertainties which are characterised by great complexity and vicissitude,hindering economic growth. I will continue to lead the Group management in ourunreserved effort to manage our businesses prudently, with particular attentionpaid to improving service quality and strengthening operational efficiency,while at the same time on the lookout for appropriate investment opportunities,with a view to increasing profitability and shareholder return."

About Miramar Hotel and Investment Company, Limited

Established in Hong Kong in 1957, Miramar Hotel and Investment Company, Limited (Miramar Group) is a group with a diversified service-oriented business portfolio comprising stylish hotels and serviced apartments, property rental, food and beverage, and travel services in Hong Kong and Mainland China. Miramar Group has been listed on the Hong Kong Stock Exchange since 1970 (HKEx Stock Code: 71) and is a member of Henderson Land Group.

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