Profit drop fails to hold back Shangri-La
Luxury hotel operator sticks to its expansion plans on the mainland despite a 66 per cent slump in first-half earnings and bleak outlook
Shangri-La Asia's first-half profit excluding gains on investment properties plunged 66 per cent year on year to US$25.7 million.
The 32 hotels the firm owns on the mainland were hit by government austerity measures and a deceleration in the economy, a trend that management said was likely to continue into the second half.
We are not cutting back. Nor are we slowing down. [Our] developments will come to the market as they have been planned
Consolidated profit for the first half increased to US$215.3 million from US$198.4 million in the same period last year.
The board declared an interim dividend of eight HK cents per share, compared with 10 HK cents a year earlier.
Three weeks before its results announcement, the luxury hotel operator issued a profit warning.
"There seems to be no positive news coming … we do think that the trends in the first six months, unless something radical happens, will probably continue for the rest of the year," chief financial officer Madhu Rao said.
Shangri-La's high exposure to the mainland market hindered its performance.