Banyan Tree Posts 38% Q1 Profit Jump

Soure : The Business Times, May 16, 2008

Revenue boosted by strong growth in hotel investment and property sales

RESORT operator Banyan Tree Holdings has reported a 38 per cent increase in net profit to $15.4 million for its first quarter ended March 31.

Total revenue, including other operating income of $7.8 million, rose 34 per cent to $140.3 million, boosted by strong growth in hotel investment and property sales. Operating expenses increased 32 per cent.

Mr Ho: Slight easing in corporate bookings offset by leisure market growth

Banyan Tree's hotel investment revenue grew 18 per cent to $77 million on a better performance by its Laguna Phuket, Banyan Tree Bangkok and Angsana Velavaru resorts.

Revenue from sales of branded properties rose more than fourfold, boosted by Dusit Villas, Banyan Tree Lijiang Villas and Banyan Tree Bangkok Suites. Sales of unbranded properties grew 18 per cent.

The company said that a 'substantial portion' of $107.4 million of unrecognised revenue as of Q1 2008 would be recognised in FY2008.

Q1 earnings per share rose to 2.03 cents, from 1.47 cents a year ago.

'Our Q1 2008 results have been in line with our expectations,' Banyan Tree managing director Ariel Vera said at a results briefing. 'Although we are in a period of uncertainty in the world economy and global financial markets, there has so far been no material negative impact on our hotel operations.'

Executive chairman Ho Kwon Ping noted a 'slight softening' of 5-10 per cent in corporate bookings and meetings, but said that this was 'more than offset by growth in the leisure market'.

Banyan Tree hopes to grow its footprint by expanding its resort and hotel operations to new strategic locations. It will add 47 resorts to its network in the next four years, and expand its existing Banyan Tree Bangkok and Angsana Li Jiang resorts.

The company is also confident of raising US$400 million through its Indochina Hospitality Fund by the end of the year, after a successful roadshow in the Middle East.

Shares of Banyan Tree closed three cents higher at $1.40 yesterday.

Get the link to Banyan Tree's financial results at www.businesstimes.com.sg