SINGAPORE - London-listed Millennium & Copthorne Hotels (M&C) posted a profit before tax of £26 million (S$47.24 million) for the first quarter ended March 31, 2018, double that of the same period a year ago in constant currency terms.
The rise in profit was helped by a gain of £3 million from the disposal of two Australian hotels owned by CDL Hospitality Trust (CDLHT). The group also benefited from the higher profit contributions from CDLHT and associated company First Sponsor Group, with total contributions being £3 million higher than the previous year.
Hotel revenue rose by 3.9 per cent, helped by higher contributions from Millennium Hilton New York One UN Plaza, which was rebranded in August 2017 and M Social Auckland, which opened in October 2017.
Total revenue rose by 3.3 per cent to £217 million in constant currency terms.
However, cost pressures continue to impact profitability at its New York hotels, said M&C, which is the hotel arm of Singapore's City Developments Limited.
In constant currency terms, group revenue per available room (RevPAR) grew by 3.2 per cent to £68.48. RevPAR for Europe fell 4.2 per cent, while RevPAR for its US, Asia and Australasia properties all rose by 4.7, 3 and 11.1 per cent respectively.
Looking ahead, the £40 million refurbishment at Millennium Hotel London Mayfair which began in November 2017 is proceeding as a phased project, where rooms are taken out from the inventory in stages.
M&C expects completion of the refurbishment in the fourth quarter of 2018, which will be followed by refurbishment of the lobby and public areas. Refurbishment plans for Millennium Hotel London Knightsbridge are under review.
It also announced that it plans to spend about US$80 million to upgrade its New York properties over the next two years.
The group added it had subscribed for its full entitlement of First Sponsor's rights issue of new perpetual convertible capital securities for a total of S$58.2 million, and the securities were allotted on April 19, 2018. M&C has an effective interest of 36 per cent in Singapore mainboard-listed First Sponsor.
Kwek Leng Beng, M&C's chairman, noted the "mixed" performance over the first three months of the year.
"London declined and Europe is showing indications of weakness, whilst our Millennium Broadway New York hotel continues to hold back overall trading performance in New York," Mr Kwek said.
On a brighter note, he added that Asia had shown signs of recovery and its New Zealand properties continue to "perform well".
"We are on track to move forward on a number of significant capital investment projects this year, designed to improve returns on group assets. We also remain alert to acquisition opportunities," Mr Kwek said.
Earlier in April, M&C announced it had appointed ex-Fairmont Hotels & Resorts president Jennifer Fox as its group chief executive and a member of its board of directors with effect from June 19, 2018.
She takes over from interim CEO Tan Kian Seng, who has held the role since February 2017 and will remain with the group as chief of staff and assume other executive responsibilities.