Shangri-La underlying profit rises 33pc on mainland tourism boom

China's tourism boom catapulted the underlying profit of luxury hotelier Shangri-La Asia 33 per cent higher to a record US$198 million last year, with momentum lingering into the first quarter of this year.

Net profit soared 69 per cent to a forecast-beating US$340.9 million, an amount that included one-off items such as a revaluation of investment properties, gains in asset sales and depreciation. The net profit beat a Thomson First Call consensus of US$250 million.

The profit growth was also helped by a 41 per cent cut in finance costs to US$19.1 million after a rights share issue cut its debt ratio to 20.5 per cent at the end of last year from 41 per cent a year earlier.

The company's 57-hotel portfolio, spread across the Asia-Pacific region, registered an average 9 per cent increase in yields, or revenue per available room, to US$105 last year. The mainland, Singapore and Malaysia were the growth leaders.

'We continued to see growth in the past three months in all markets,' executive director Giovanni Angelini said. 'There is another record year this year.'

Mr Angelini expected average room rates would climb 10 per cent this year after a 16.54 per cent rise in the first two months. The yield of the group's hotels was on average about 11 per cent higher in the two-month period year on year.

Last year, the yield of the group's three hotels in Hong Kong fell 3 per cent to US$211, dragged down by the newly acquired mid-tier Novotel Century Harbourview hotel in Sheung Wan.