Mandarin Oriental International has decided against paying a final dividend for a second consecutive year, although its full-year net profit rocketed 348.83 per cent to US$19.3 million.
The luxury hotel operator, part of the Jardines Group, said the directors had decided not to recommend a dividend in view of the continued global uncertainty and the group's investment programme. The company also failed to declare an interim dividend.
'The luxury hotel industry continues to face considerable challenges, and no early recovery in room rates can be expected so long as the global uncertainty persists,' chairman Simon Keswick said. 'At the same time, the pre-opening expenses of two new United States hotels will negatively affect the group's result in 2003, particularly in the second half.'
Mandarin Oriental said the strong result was partly due to a US$5 million write-back for the development costs of a Washington hotel project.
The group, which operates Mandarin Oriental and The Excelsior in Hong Kong, also benefited from reduced financing charges due to lower interest rates, which offset the effect of an overall increase in net borrowings.
Chief executive Edouard Ettedgui said Mandarin Oriental recovered somewhat last year from the depressed conditions as occupancy levels in most of its key markets improved. But average room rates continued to suffer from the weakness in the global economy.