Shangri-La Asia Limited reported the financial results of the Company and its subsidiaries (“Group”), and associates for the six months ended 30 June 2020. Highlights included:
- COVID-19 significantly impacted its business, where consolidated revenues of the Group decreased by 62.1% to USD453.5 million, compared to USD1,195.0 million for same period last year.
- The weighted average occupancy of the hotels decreased forty percentage points to 26%, compared to 66% for same period last year.
- RevPAR decreased by 68% to USD35, compared to USD110 for same period last year.
- Effective share of EBITDA of the Group decreased by 93.8% to USD27.8 million, compared to USD449.2 million for same period last year.
- Operating PATMI of the Group decreased to a loss of USD255.4 million, compared to a profit of USD64.2 million for same period last year.
- Total PATMI of the Group decreased to a loss of USD282.6 million, compared to a profit of USD115.1 million for same period last year.
- No interim dividend declared as a prudent effort to conserve cash.
Commenting on the interim results, Shangri-La Group’s Chief Executive Officer, Lim Beng Chee said, “Our hotels’ occupancy rates in Mainland China have seen a sustained and gradual recovery since February, supported by domestic leisure, corporate travel, and some government businesses. We have also recently started seeing business picking up in other regions, such as Australia and Malaysia, where the pandemic is showing signs of being under control and there is strong domestic demand for our services. In Mainland China where half of our hotels are located, there has been a strong pick up in local leisure and corporate travel. This has helped the region reach 49% occupancy in the month of July 2020. Despite the severity of COVID-19’s impact on our financial performance during the period, our overall financial position remains healthy, with adequate liquidity to prepare ourselves for a prolonged pandemic, and this will provide us with a strong support to navigate sustained uncertainties.”
Looking ahead, Shangri-La Group’s Chairman Hui Kuok said, “The impact of COVID-19 on the global economy continues to play out, and governments worldwide are still adapting as the situation evolves. The travel and hospitality industry face continued challenges and various governments have rolled out policies and measures to provide support to our sector. I am very proud of and thankful to our colleagues and business partners around the world for their efforts during these difficult times. Our management team is closely monitoring the situation and have measures to ensure the continuity of our businesses. We have implemented the ‘Shangri-La Cares’ commitment, and strictly adhere to local requirements to safeguard the continued safety and wellbeing of our guests and colleagues.”
Despite the challenges, the Group continues to pave the way for the future. The Shangri-La Zhoushan was opened in January 2020, and the Group’s investment property portfolio continued to provide a steady base in the midst of volatility. While there are gradual business recoveries in destinations where the virus is showing signs of being under control, the Group is mindful that the situation can still rapidly change, as evidenced by recent second or third waves in some regions. The Group’s corporate business may be further hindered by economic uncertainties, as tensions between U.S. and China has intensified over the past few months.
The Group has implemented and will continue to introduce multiple cost control initiatives to manage its operational costs. The Group’s directors, management and employees have participated in various voluntary cost cutting measures including unpaid leave and wage reduction. Government relief policies in different countries have also assisted in alleviating some of the immediate financial impacts. The Group has also taken the opportunity to restructure and streamline some teams.
As at the end of 30 June 2020, the Group had cash and cash equivalent of USD951.9 million and committed undrawn facilities of USD1.2 billion, with USD141.0 million of debt to be refinanced for the rest of the year. The Board has declared no interim dividend and drastically cut back on CAPEX plans as a prudent effort to conserve accessible cash reserves in the event of a prolonged period of uncertainties.
About Shangri-La Group
Shangri-La Group is one of the world’s premier developers, owners and operators of hotel and investment properties which comprises office buildings, commercial real estate and serviced apartments/residences. The Group’s other principal activities include hotel management services as well as property development for sale. It currently owns and/or manages over 100 hotels globally in more than 75 destinations under the Shangri-La, Kerry, JEN and Traders brands. Prominently positioned in Asia, the Group has a substantial pipeline of upcoming hotel and mixed-use development projects in Australia, Bahrain, Mainland China, Cambodia, Indonesia and Saudi Arabia. For more information, please visit https://www.shangri-la.com/group/.
