Surge in profits for Fragrance hotel chain owner Global Premium Hotels

SINGAPORE - Earnings in the fourth quarter soared for the company that owns the Fragrance hotel chain, though largely due to lower income tax.

Global Premium Hotels' net profit surged 61 per cent to $8.4 million for the three months to Dec 31, it told the Singapore Exchange on Friday. Revenue for the quarter also surged 7.2 per cent to $16 million

However, the sharp jump in earnings was mostly due to an income tax credit of $3.4 million, which the company said was due to a reversal of over-provision of income tax in previous years. Without that, pre-tax profit would have been down 17.2 per cent.

Earnings per share jumped to 0.8 cent in the fourth quarter from 0.49 cent the year before. Net asset value per share went up from 63.99 cents at the end of 2013 to 68.35 cents at the end of last year.

For the full year ended Dec 31, net profit rose 9.7 per cent to $21.2 million and revenue expanded 1.5 per cent to $61.5 million from the preceding year.

Global Premium Hotels operates 23 hotels, of which 21 are under the "Fragrance" brand and two are under the "Parc Sovereign" brand. It had 1,983 hotels rooms in Singapore at the end of last year.

The group said in a statement that its hotel business is likely to face stiffer competition this year due to new supply being completed. This will "further depress the occupancy and room rates", it said.

Its hotels' average occupancy rate slipped to 81.4 per cent in the fourth quarter last year from 88.3 per cent in the final three months of 2013.

Revenue per available room also shrank to $86.8 in the three months to Dec 31, from $92.30 the previous year.

However, the group said that events here such as the SG50 celebrations and the SEA Games in the middle of the year are expected to lift tourist arrivals.

It proposed a cash dividend of half a cent per share, payable on April 28.

Shares of Global Premium Hotels rose half a cent to 35.5 cents on Friday.