Wanda Hotel first-half loss widens to HK$300 million
The interim loss is eight times the loss for the first half of 2016 due to the disposal of a Spanish asset
Losses at Wanda Hotel Development, the overseas platform of Chinese tycoon Wang Jianlin’s Dalian Wanda Group, widened to HK$300 million (US$38.3 million) in the first half of 2017, no thanks to a substantial loss from the disposal of a Madrid development project.
The first-half loss was also eight times the year-earlier period’s HK$37 million, the company said in a filing to the Hong Kong stock exchange on Wednesday.
The developer booked a one-off loss of HK$330 million on its disposal of Wanda Madrid Development for €272 million (US$320.2 million). In June, the Wanda Group’s Europe unit had agreed to sell the Edificio Espana building – bought in 2014 for €265 million – to Spanish investment group Baraka at a price of €272 million, after feuding with city authorities for two years over plans to renovate the landmark, the company said.
Wanda Hotel’s first-half revenue for the year was down 61 per cent to HK$100 million, largely because of a HK$74 million decrease in property sales in mainland China and a HK$64 million cut in rental income from a Sydney project. ,
Two weeks ago, Wang announced that the group’s Wanda Culture Travel Innovation Group and Wanda Hotel Management will be injected into Hong Kong-listed Wanda Hotel for a combined 7.05 billion yuan (US$1.05 billion). Wanda Culture builds and manages theme parks, while Wanda Hotel Management operates hotels.
In addition, Wang would transfer the stake that Wanda Hotel owns in his overseas property projects in Australia, London, Chicago and China’s Guilin city, to Dalian Wanda Commercial Properties.
The reshuffling is aimed at turning Wanda Hotel into a professional manager and operator of theme parks, while privatising Wanda’s overseas assets as Wanda Commercial Properties was delisted from Hong Kong last September.
The terms of the transactions were “pending finalisation”, so the company “will continue to run its current business in the ordinary and usual course,” said Ding Benxi, chairman of Wanda Hotel Development, said in the earnings statement.
The restructuring of Wang’s corporate portfolio comes as the group faces heightened scrutiny by the Chinese government over its debt-fuelled overseas expansion.
Wanda disposed of most of its hotels and theme parks for US$9.5 billion last month to repay debt. Yesterday, it revealed that it scrapped a plan to acquire a plot of land in London’s Nine Elms district for £470 million.
The Hong Kong stock market was closed due to a typhoon on Wednesday, but Wanda Hotel shares have surged 60 per cent since the announcement of the asset injection.