Hong Kong, Shanghai Hotels Reports Decline in First Half of 2009

The unaudited interim results announced by The Hong Kong and Shanghai Hotels, Limited (HSH) reflect the difficult business environment in which the group has operated for the first six months of 2009.

The total turnover for the period amounted to HK$1.962 billion, down 18 percent over the same period in 2008. EBITDA (earnings before interest, tax, depreciation and amortization) decreased by 41 percent to HK$411 million.

After taking into account depreciation and net financing charges, profit before non-operating items and taxation amounted to HK$182 million. Revaluation gains on investment properties amounted to HK$413 million (compared to HK$1.267 billion for the same period in 2008).

Profit attributable to shareholders in the six months amounted to HK$462 million. The total tax charge was HK$116 million (HK$112 million in 2008), including the impact of deferred taxation. Earnings per share were HK$0.32 (HK$1.12 in 2008). Excluding non-operating items and the related tax and minority interests, earnings per share decreased by 78 percent to HK$0.08 (HK$0.37 in 2008).

Shareholders’ funds increased to HK$21.3 billion, or HK$14.49 per share. Net borrowings increased to HK$2.1 billion and the group’s gearing ratio increased to 9 percent mainly due to the investment of HK$1.044 billion made in respect of the Peninsula Paris project.

The company has also provided a calculation of the adjusted net assets attributable to shareholders, which after taking into account the fair market valuations of hotel properties and golf courses and a write-back of deferred taxation on property revaluation surpluses arising in Hong Kong, amounted to HK$26.3 billion, or HK$17.96 per share. The directors have resolved to pay an interim dividend of 3 HK cents per share (6.5 HK cents per share in 2008).