The Hongkong and Shanghai Hotels (45) H1 2026 earnings summary

Executive summary

• Returned to profitability in 1H 2026 with HK$23 million profit attributable to shareholders, reversing a HK$289 million loss in 1H 2025, driven by strong hotel performance in Greater China (+29% RevPAR), the US (+16%), and stable commercial property earnings.

• Revenue from operations rose 8% year-over-year to HK$3,534 million; total revenue including residential sales reached HK$3,929 million, with combined revenue (including all segments) up to HK$4,346 million.

• EBITDA increased 20% to HK$770 million, reflecting disciplined pricing and cost control, with margin expanding from 13.6% in 2024 to 21.8% in 1H 2026.

• Strategic investments exceeding HK$2 billion approved for flagship renovations at The Peninsula Hong Kong and Tokyo, supporting long-term growth and Vision 2035: Perform and Transform.

• Vision 2035 strategy underpins ongoing transformation, operational excellence, and selective expansion.

Financial highlights

• Operating EBITDA increased 20% year-over-year to HK$770 million; EBITDA margin improved to 21.8% in 1H 2026 from 13.6% in 2024.

• Net cash generated from operating activities increased 71% to HK$1,043 million; net cash from recurring operating activities up 22% to HK$727 million.

• Net external debt stable at 22% of total assets; net external borrowings at HK$11.9 billion.

• Weighted average gross interest rate reduced to 3.7%; cash interest cover improved to 2.8x from 1.9x.

• 58% of committed facilities classified as green or sustainability-linked; undrawn committed facilities of HK$1.9 billion.

Outlook and guidance

• Entering 2H 2026 with improved momentum, stronger EBITDA, and a positive demand outlook for hotels, supported by international travel recovery and luxury demand.

• Commercial properties expected to maintain resilient residential leasing and benefit from improved visitor flows; office leasing remains competitive but is improving in core locations.

• Peak Tram, Retail and Others to focus on cost management, new partnerships, and seasonal demand.

• Board approved HK$2.1 billion in renovations for The Peninsula Hong Kong and Tokyo, reflecting long-term confidence.

• Management to focus on executing Vision 2035, driving revenue growth, protecting profitability, and selective investment.