Hotel Properties (H15) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 22.2% YoY to $642.1m; gross profit increased 39.2% to $146.7m, supported by stronger hotel and resort performance amid travel recovery.

• Profit attributable to owners was $561.0m versus $40.2m; results included a $645.0m fair-value gain on investment properties and a $56.4m share-of-results loss from associates and joint ventures.

• Hotel operations expanded with Six Senses Kanuhura reopening in September 2023 and the debut of Four Seasons Explorer in Palau; property projects advanced in Singapore and London.

Financial highlights

• Revenue was $642.1m versus $525.5m; hotel revenue was $616.5m versus $501.1m, while rental income was $23.4m versus $22.0m.

• Gross profit increased to $146.7m from $105.4m; operating profit before associate results, depreciation, amortisation, fair-value changes and finance costs was $146.7m, up 29.2% YoY.

• Profit for the year was $554.9m versus $34.4m; owners’ profit was $561.0m versus $40.2m, including a $645.0m investment-property fair-value gain versus $77.8m.

• Finance costs increased to $98.3m from $59.4m, mainly due to higher interest rates; mark-to-market loss on long-term investments eased to $11.9m from $17.3m.

• Operating cash flow was $136.5m versus $144.9m; net cash from investing activities was $37.2m versus $367.7m used, while financing activities used $169.3m versus $234.9m generated.

Outlook and guidance

• International travel growth is expected to continue, although geopolitical tensions and slower global economic growth remain challenges; markets expect interest rates to have peaked despite no indicated Federal Reserve rate cuts.

• Bankside Yards’ 250-apartment tower is moving into its next development phase; pre-marketing was expected to begin in H1 2024.

• Detailed redevelopment plans are progressing for Forum, voco Orchard Singapore and HPL House; Paddington Square’s Bakerloo ticket hall was expected to complete in H2 2024.