Friday, May 21, 2010

Shangri-La upbeat on 2010 results

SHANGRI-LA Hotels (Malaysia) Bhd's performance in the current financial year ending December 31 2010 is expected to match, if not surpass, its results for 2008.

The expectation comes in line with better economic sentiments and two fully-furbished hotels. Shangri-La Hotel Kuala Lumpur and Golden Sands Resorts Penang underwent a RM112 million and RM40 million renovation respectively last year.

In the year ended December 31 2008, Shangri-La posted a net profit of RM49.27 million on revenue of RM415.45 million.

In comparison, the hotel owner-cum-operator only churned in a net profit of RM35.35 million on revenue of RM367.37 million last year as its revenue, especially from its main performer Shangri-La Hotel Kuala Lumpur took a hit from the global financial crisis.
"Business will definitely be better with two hotels back in line... all things being equal, we hope to make as much, if not slightly better than in 2008," managing director Kuok Oon Kwong told reporters after the group's annual general meeting in Kuala Lumpur yesterday.

She said the Iceland volcanic ash situation did cause some blips in the group's business, but overall all its hotel properties in Malaysia are expected to churn in a better gross operating profit (GOP) compared to 2009.

GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).

Main revenue contribution in 2010 is expected to come from Shangri-La Hotel Kuala Lumpur, followed by Rasa Ria Resort in Sabah and the Golden Sands Resorts Penang.

The hotel in the capital alone is expected to contribute over half to the group's total revenue this year.

Meanwhile, Kuok said there is no more hotel upgrade exercise scheduled for the year, but Rasa Ria Resort in Sabah is expected to undergo renovation at its old wing in 2011.

Kuok also said that with the positive cash flow coming in, it expects to retire its borrowings by the end of 2012.

The group's gearing increased to 23 per cent (RM168.97 million) as at December 31 2009 as a result of financing to renovate the two hotels, from 21 per cent (RM154.32 million) in 2008.

Its net gearing ratio is expected to reduce to between 13 per cent and 15 per cent by the end of this year and be completely settled by the end of 2012.

Source : BTimes
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