bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Amy Chew

THE Mandarin Oriental Group had more than its fair share of the limelight last week.

  The group's final results were released just a day before its parent, Jardine Matheson Holdings, announced that it would de-list from the Hong Kong Stock Exchange.

  The market reacted negatively and Mandarin's share price took a fall despite the fact that the group is unlikely to be de-listed, according to Baring Securities analyst Rohan Dalziell.

  Its share price dropped last Wednesday from HK$11.70 to $10.80 but recovered slightly yesterday.

  Mr Dalziell said the de-listing announcement had brought about negative sentiments about Mandarin.

  ''The sentiments will only be lifted if the Mandarin group publicly announces that they will not be de-listed.

  ''I doubt that they [Mandarin] will go public as they are part of the Jardines group,'' he said.

   Mandarin Oriental group managing director Robert Riley said: ''Our board of directors are keeping abreast of the developments in Jardine and they will consider making an announcement in due course''.

  With the dust yet to settle on the Jardine's saga, analysts had mixed reactions on Mandarin's results.

The group announced a mere 1.24 per cent rise in after-tax profits to US$40.8 million for the year ended December 31.

  A poor performance from its Asian operations was blamed for the near inert growth which offset its profitable operations in Hong Kong from the Mandarin Oriental in Central and The Excelsior in Causeway Bay.

  Turnover was up a modest seven per cent to US$158.8 million while operating profits edged up about nine per cent to US$41.2 million.

  Peregrine Brokerage research director Ravi Narain said that while the group's Hong Kong hotels performed well and ended the year strongly, earnings at The Excelsior were affected by a drop in food and beverage business.

  This resulted from tenants moving out of adjacent office buildings.

  ''The food and beverage business makes up about 40 per cent of the hotel's earnings and as such it had an overall impact on its profits,'' said Mr Narain.

  Nevertheless, he was confident that the group had a ''clear run'' from now.

  ''About 70 per cent of the group's earnings come from Hong Kong,'' he said.

  ''As the worst is over for the hotel sector in the territory, the group can expect strong growth for this year.''   But some analysts were not so optimistic. Mr Dalziell said that for the group to perform well, every hotel in the group had to do well.

  ''The group is widely exposed to the region and it would need every hotel in each country to do well for the group to perform well,'' he said.

  ''Its regional hotels have yet to outperform their 1992 contributions.'' he said.

  For the year ahead, Hong Kong hotels were expected to turn in healthy earnings.

  But Mr Dalziell said: ''Staff salary, inflation and shortages of trained staff are factors which could affect the group's performance.''   Earlier, Mr Riley had said its Hong Kong room rates had yet to reach the levels of 1989.

  During that period, the group charged US$221 a night. This compares with last year's average room rate of US$212.

  Mr Riley said that if inflation was taken into account, its average room rate would now be US$300.

  However, Mr Riley also expressed confidence that room rates and yields would rise given the tight room supply and increasing visitor arrivals in Hong Kong.

  The outlook for the region, however, was less rosy, according to Mr Dalziell.

  In Bangkok, The Oriental, which has been a landmark in the city, was finding itself a victim of the city's critical traffic jams.

  ''The horrendous traffic jams in Bangkok are keeping international tourists away from the hotel.

  ''In addition, the hotel's location is slightly out of the city centre and that has affected its food and beverage business as it inhibits people from travelling to the hotel for banquets,'' he said.

  DBS Securities analyst Brian Oung expected the group's hotel in Manila would continue to battle for business this year because it faced increasing competition.

        Mr Dalziell expected the Singapore hotels to stage a recovery this year after a period of room oversupply.



Mandarin in battle to offset JM fallout