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Banyan Tree: Full Year Operating Profits up to 10% to S$122.5 million

Banyan Tree: Full Year Operating Profits up to 10% to S$122.5 million

Category: Worldwide - Industry economy - Figures / Studies
Article written by our desk on 2008-03-24


Highlights:

- FY2007 Revenue up 26% to S$421.9 million
- 4Q07 Revenue up 33% to S$151.4 million
- 4Q07 Operating profits up 22% to S$51.4 million
- Strong performance by hotel operations
- Increased contribution from property sales segments

Main-Board listed Banyan Tree Holdings Limited (“Banyan Tree” or the “Group”), a leading manager and developer of premium resorts, hotels, spas and galleries, announced today its full year result. Driven by its hotel operations and property sales segments, coupled with a one-off negative goodwill exceptional gain arising from its subsidiary’s rights issue in July 2007, the Group posted a 142% increase in profit after taxation to S$102.4 million on the back of a 26% increase in revenue to S$421.9 million.

Mr Ho KwonPing, Executive Chairman of Banyan Tree said, “We are pleased with the strong growth of our businesses while we continue to enlarge our global footprint as part of our strategy to grow our revenue base and diversify geographically. Our financial results for 2007, especially in the fourth quarter, underscore our accelerated growth as most business segments performed better than the previous year. We are hopeful that the positive trend will continue into 2008, supported by the strong pipeline of new hotel projects and encouraging responses to property and hotel residences sales”.

The Group’s total operating expenses increased 34% largely due to higher operating supplies, administrative costs, and sales and marketing expenses, which is in line with increased revenue. There were also increases in staff strength as the Group expanded its’ new hotel operations (Banyan Tree Lijiang) and other new spa operations.

The Group’s overall cash and cash equivalents increased by 42% to S$115.7 million, mainly due to proceeds from the issuance of Medium Term Notes in the fourth quarter of 2007, but were offset by various investments, construction and renovation projects and payment of dividends to shareholders during the year.

(A) BUSINESS SEGMENTS REVIEW

1 Revenue increased by 33% from S$114.0 million in 4Q06 to S$151.4 million in 4Q07. With the exception of Design Fees and Others segment, most business segments showed positive growth with Hotel Investment, Hotel Residences and Property sales contributing 95% or S$35.6 million of the overall increase for the quarter. For the full year, the Group saw a healthy sales growth of 26% from S$335.3 million in 2006 to S$421.9 million in 2007.

2 Hotel Investment
Revenue increased by 21% from S$51.6 million in 4Q06 to S$62.7 million in 4Q07. This increase was due to better performance in Laguna Phuket resorts and higher revenue contribution from Banyan Tree Lijiang. EBITDA increased by 7% from S$17.4 million in 4Q06 to S$18.6 million in 4Q07, in line with the higher revenue. For the year ended 31 December 2007, revenue increased by 27% from S$169.6 million to S$215.0 million. EBITDA of S$63.2 million was S$13.5 million or 27% above last year.

3 Hotel Management
Revenue increased by 23% from S$2.9 million in 4Q06 to S$3.5 million in 4Q07. EBITDA improved by S$0.2 million against the same period last year. This was mainly due to additional management fees contributed from Banyan Tree Bahrain which soft opened in April 2007, coupled with higher management fees received from Maison Souvannaphoum and Banyan Tree Seychelles. The latter was attributed to seven units of beachfront spa pool villas and six units of two-bedroom double pool beachfront villas added to the inventory. For the year ended 31 December 2007, revenue increased by 110% from S$7.0 million to S$14.7 million. EBITDA increased by S$2.2 million to S$1.3 million in 2007, a turnaround from the loss of S$0.9 million last year.

4 Spa Operations
Revenue increased by 22% from S$5.8 million in 4Q06 to S$7.0 million in 4Q07. EBITDA of S$1.7 million was S$0.3 million or 25% higher compared with the corresponding period last year. This was mainly due to contributions from new spas in China and higher revenue from spa outlets in Phuket and the Middle East.

For the year ended 31 December 2007, revenue increased by 13% from S$22.1 million to S$24.9 million. EBITDA for the year decreased by S$1.3 million to S$5.6 million as 2006 results was distorted by a one-off compensation fee of S$1.3 million for closure of one outlet in Hakone, Japan, as the owner sold the premises. Excluding this once-off compensation, EBITDA was in line with last year.

5 Property Sales
This segment recorded a revenue growth of 30% or S$7.8 million in 4Q07 and 38% or S$23.6 million for the full year ended 31 December 2007. This was mainly due to percentage of revenue recognition from sales of Laguna Village Villas, Townhomes and Bungalows coupled with higher sales of holiday club membership. As a result of the higher revenue, EBITDA increased by S$2.7 million or 22% in 4Q07 and by S$5.4 million or 19% for the full year ended 31 December 2007.

6 Hotel Residences
Sales of branded Hotel Residences recorded a revenue growth of 88% or S$16.8 million in 4Q07 due to sales and recognition of 21 units of Dusit Pool Villas at Laguna Phuket and 3 units of BT Villas and Townhouses at Lijiang, China. However for the full year ended 31 December 2007, revenue was lower by 2% or S$1.0 million. We have sold several units of the 2 Bedrooms Pool Villas from our Phase Two developments in Banyan Tree Phuket and Villas in Banyan Tree Lijiang but were not able to fully recognize revenue as yet for these units sold as construction work has just commenced.

7 Design Fees and Others
Revenue decreased by 6% from S$5.6 million in 4Q06 to S$5.2 million in 4Q07, due to lower design fees billed in 4Q07. For the full year ended 31 December 2007, revenue increased by 50% from S$16.1 million to S$24.2 million mainly attributed to recognition of several new projects during the year and higher income from golf operations as a result of higher hotel occupancies and increase in average green fees. EBITDA increased by 21% from S$2.3 million in 4Q06 to S$2.8 million in 4Q07 and 74%, from S$5.6 million in 2006 to S$9.8 million in 2007 mainly due to higher revenue and income from write-back of impairment on land.



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