Friday, August 15, 2008

Banyan Tree Q2 Profit Rises 10% To $3.5m

Source : The Business Times, August 15, 2008

BANYAN Tree Holdings yesterday said that second-quarter net profit rose 10 per cent as it sold more of its luxury-branded hotel residences.

Earnings for the three months ended June 30, 2008 climbed to $3.5 million, from $3.2 million a year ago.

Revenue rose 28 per cent to $106.4 million in Q2 2008 from $83 million for the same three months in 2007. Turnover was boosted by the hotel residences segment but offset by lower revenue from its hotel investment division, Banyan Tree said.

Contribution from hotel residences rose more than ninefold to $33.2 million on higher sales and revenue recognition of the group's villas, townhomes and suites at Banyan Tree Phuket, Banyan Tree Lijiang, Dusit Laguna and Banyan Tree Bangkok.

However, turnover from the hotel investment segment fell 13 per cent, mainly due to lower revenue from Laguna Phuket, which was hit by lower business from the meetings, incentives, conference and exhibitions (MICE) segment.

Earnings per share for Q2 2008 rose to 0.46 cents, from 0.42 cents a year ago.

For the first half of 2008, Banyan Tree's net profit rose 32 per cent to $18.9 million. Turnover for the six months rose 27 per cent to $239 million.

Looking ahead, Banyan Tree is 'cautiously optimistic' that its prospects remain broadly positive despite the current global economic slowdown and costlier air travel resulting from higher fuel prices.

The company is particularly upbeat about its branded hotel residences.

In H1 2008, Banyan Tree sold 62 units worth some $90.6 million, compared to 38 units in the first six months of 2007.

'Including units sold in 2007, we have a total of S$95.6 million unrecognised revenue as at June 30, 2008 . . . and we will be progressively recognising revenue on percentage of completion basis as construction progresses in 2008,' the company said.

In 2008, revenue from property sales is expected to surpass last year's, Banyan Tree said.

Banyan Tree's shares closed two cents down at $1.19 yesterday. The stock price has shed 42 per cent this year.

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