Hotel Royal (H12) H2 2023 earnings summary

Executive summary

• FY 2023 revenue rose 39.3% YoY to $58.34m; profit before tax was $4.69m, reversing a $2.93m loss, and attributable profit was $2.56m versus a $3.44m loss.

• Hotel recovery across Singapore, Malaysia and Thailand, plus first contributions from Baba House and Hotel Royal Signature, lifted hotel revenue 44.9% to $51.01m.

Financial highlights

• Gross profit increased 68.4% to $28.87m; operating expenses rose 47.5% to $18.00m and finance costs rose 44.1% to $8.36m.

• EBITDA rose to $20.24m from $9.87m; net cash from operating activities was $8.24m versus $6.97m.

• Other income included $2.93m impairment reversal on property, plant and equipment, $0.86m net FX gain, $0.86m bank interest and $0.16m FVTPL fair-value gain.

• Cash and bank balances fell to $22.66m from $47.02m; total assets were $827.26m and total equity $645.35m at year-end.

Outlook and guidance

• Continued room-demand growth is expected as travel recovers; Baba House expansion is planned, while Hotel Royal Signature’s next refurbishment phase adds 215 rooms and is targeting an April 2024 grand opening.

• Expansion remains subject to stringent investment criteria and due diligence; Hotel Royal Penang options remain under review.

• Travel prospects are positive, but geopolitical tensions, inflation, higher interest rates and SGD exchange-rate movements may weigh on performance and investments.