Tough trading conditions drive Q2 net profit 18% lower at Millennium & Copthorne

Hotels group Millennium & Copthorne Hotels said its second quarter net profit fell by 18 per cent to £33.1 million (S$63.7 million).

This was despite revenue edging up 0.8 per cent to £199.9 million for the three months to June 30.

Despite better trading performance in London and New York, the group faced challenging trading conditions in Singapore and Seoul.

For the first half year, net profit slumped by 21 per cent to £46.1 million while revenue eased by 1.3 per cent to £369.1 million.

Giving a downbeat assessment, the hotel arm of mainboard-listed City Developments said that trends in Asia remain subdued, because of economic uncertainty, greater hotel capacity and increasing costs, particularly in Singapore, where an increased supply of competitor hotel rooms has impacted trading.

The London-listed company said its revenue per available room rose by 4.1 per cent to £67.27 in the first six months, due to increases in both occupancy and average room rate to 70.5 per cent and £95.45 respectively from 69.8 per cent and £92.54 in the same period last year.

The group said that overall trading was in line with management's expectations. It remains cautious on the outlook for hospitality markets.

Said chairman Kwek Leng Beng: "London faces a tough comparative third quarter mainly because of its success during last year's Olympics, whilst our Singapore hotels are competing with an increasing supply of rooms offered by competitors, as well as higher labour costs."

The company declared an unchanged interim dividend of 2.08 pence a share, which will be paid on Oct 4.