Banyan Tree's Q4 profit up on property sales, one-off gains

Banyan Tree’s Laguna Phuket destination integrated resort in Bang Tao Bay, Phuket, Thailand. Banyan Tree Holdings’ boost in earnings was in part due to the recognition of more transactions in the property sales segment in Laguna Phuket.
Banyan Tree’s Laguna Phuket destination integrated resort in Bang Tao Bay, Phuket, Thailand. Banyan Tree Holdings’ boost in earnings was in part due to the recognition of more transactions in the property sales segment in Laguna Phuket.PHOTO: DOUBLEPOOL VILLAS BY BANYAN TREE PHUKET

They offset weak performance in hotel segment as net profit rises 44% to $5.6m

Improved property sales and gains from one-off disposals offset a weaker hotel segment to deliver a robust boost to earnings at resort operator Banyan Tree Holdings.

Net profit rose 44 per cent to $5.6 million in the three months to Dec 31 while revenue gained 4 per cent to $92.8 million.

This was due to the recognition of 41 Laguna Park transactions in the property sales segment compared with only 31 units in the same quarter the previous year.

Hotel investment revenue was lower, in part because of the disposal of a Seychelles hotel in November last year.

Fee-based revenue also shrank, due to lower architectural design and project fees earned from projects based on project milestones.

Other income more than doubled to $24.3 million in the fourth quarter from $9 million a year earlier, a $15.3 million increase.

That came from gains as the company sold assets in the Seychelles and further restructured its portfolio in China.

It sold an 18.6 per cent interest in Banyan Tree Assets (China) to China Vanke last November.

Earnings per share rose from 0.49 cent a year ago to 0.67 cent.

The company has declared a final cash dividend of 1.05 cents a share for the year.

Net profit rose 4 per cent to $13.5 million for the full year on revenue of $329 million, up 4 per cent.

Banyan Tree expects to open seven new resorts and to launch eight spas over the next 12 months.

  • AT A GLANCE

  • REVENUE: 

    $92.8 million (+4%)

    NET PROFIT: 

    $5.6 million (+44%)

    DIVIDEND PER SHARE: 

    1.05 cents

Forward bookings for owned hotels for the first quarter of this year are down 8 per cent year on year, split between a 4 per cent decline outside of Thailand and a 10 per cent decrease within Thailand, the company said.

Deposits for 57 property sale units with a sale value of $37.2 million were received in the fourth quarter of last year, down from 101 units with a sales value of $63.6 million a year earlier.

Executive chairman Ho Kwon Ping said in a statement on Wednesday: "In 2018, we continued our path of rebalancing assets to be more asset light by taking profit on our matured properties.

"Amidst global slowdown and rising interest rates, we will be conservative and will deploy the proceeds from sales to reduce bank borrowings while continuing to generate growth from existing core businesses."

Banyan Tree Holdings shares closed down 2.52 per cent to 58 cents yesterday.

A version of this article appeared in the print edition of The Straits Times on March 01, 2019, with the headline 'Banyan Tree's Q4 profit up on property sales, one-off gains'. Print Edition | Subscribe