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https://scmp.com/business/article/3167444/sino-hotels-expects-conditions-remain-challenging-after-first-half-losses Business
Sino Hotels expects conditions to remain challenging after first-half losses rise amid Covid-19 curbs in Hong Kong
- The owner of the Conrad Hong Kong saw losses widen by more than a fifth to US$7.1 million for the six months ending December
- City Garden Hotel reported 100 per cent occupancy from June to December, while Conrad and Royal Pacific Hotel & Towers also saw higher occupancy
City Garden Hotel, owned by Sino Hotels and located in Hong Kong island’s eastern district of Fortress Hill, had 100 per cent occupancy in the six months to December. Photo: Handout
Sino Hotels, controlled by billionaire Robert Ng Chee Siong, said on Thursday that the outlook does not look too bright after its first-half losses widened, as Hong Kong’s zero Covid-19 policy continued to weigh on its bottom line.
The owner of the Conrad Hong Kong saw losses increase by more than a fifth to HK$55.5 million (US$7.1 million) for the six months ending December from a year ago.
“The hospitality industry continued to be heavily impacted by cross-border travel restrictions and social distancing measures,” Ng said in a statement filed to the Hong Kong stock exchange.
“A meaningful recovery will be dependent on the easing of travel restrictions and resumption of international travel. The group is taking all practicable measures to cope with the challenges.”
Hong Kong’s quarantine restrictions, which are among the strictest in the world, saw visitor arrivals in the six-month period ending December slump to 57,649, a fraction of the 21 million recorded in the same period in 2019 before the coronavirus outbreak.
Meanwhile, Hong Kong continues to battle an exponential surge in infections that shows no signs of slowing down.
“The pandemic situation in Hong Kong remains fluid due to ongoing threat of new variants emerging,” Ng said. “Travel restrictions will likely remain in place for the time being, and trading conditions for our hotels are expected to remain challenging.”
Revenues rose by about 20 per cent to HK$62.3 million, but losses from other income rose to HK$11.9 million from a gain of HK$13.9 million in the same period in 2020.
Owing to the losses, Sino Hotels did not declare a dividend for shareholders.
The group’s portfolio of three hotels in Hong Kong saw improved average occupancy rates in the six months to December.
City Garden Hotel had a 100 per cent occupancy rate after entering a “bulk hiring arrangement” in August 2020.
The Royal Pacific Hotel & Towers saw occupancy rise to 65.7 per cent from 26.5 per cent, while Conrad Hong Kong, the most prestigious hotel in the portfolio, reported an average occupancy rate of 31.7 per cent, up from 18.5 per cent a year earlier.
Ng said that the focus on staycation and long-stay businesses at Conrad and Royal Pacific helped occupancy, but room rates had been competitive.
Shares of Sino Hotels closed 1.3 per cent higher at HK$2.32 each.
Meanwhile, Sino Land, one of Hong Kong’s largest property developers and also chaired by Ng, reported a near doubling of its net profit to HK$4.2 billion for the six months ending December, from HK$1.3 billion in the same period in 2020.
Revenue from property sales, including residential units and car parking spaces in Hong Kong and mainland China more than quadrupled to HK$8.5 billion.
The company declared a dividend of HK$0.15 per share to be paid on April 11.
Sino Land’s shares were unchanged on Thursday.