Banyan Tree reports 4Q18 net profit rose 44 percent on disposal of Seychelles assets

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Resort operator Banyan Tree reported on Wednesday its fourth quarter net profit increased 44 percent on-year to S$5.6 million on a gain from disposing of assets in the Seychelles, partly offset by lower operating profit from property sales.

Revenue for the quarter ended 31 December increased 4 percent on-year to S$92.8 million, it said in a filing to SGX after the market close on Wednesday.

Other income increased by S$15.3 million to S$24.3 million in the fourth quarter, mainly on a gain from the disposal of assets in the Seychelles and the disposal of an 18.6 percent stake in BTAC, Banyan Tree said.

Ho Kwon Ping, Banyan Tree’s executive chairman, was cautious on the outlook.

“In 2018, we continued our path of rebalancing assets to be more asset light by taking profit on our matured properties. We sold our Seychelles assets and also further reduced our shareholding in BTAC to a small minority stake,” Ho said in the statement. “Amidst global slowdown and rising interest rates, we will be conservative and will deploy the proceeds from sale to reduce bank borrowings while continue to generate growth from existing core businesses.”

The property sales segment saw revenue increase by 61 percent on-year to S$30.0 million in the fourth quarter as a total of 41 units of Cassia Phuket, Banyan Tree Grand Residences, Laguna Park townhomes/villas and Laguna Village residences were recognized, up from 31 units in the year-earlier quarter, the filing said.

But operating profit for the segment fell by S$3.15 million, or 75 percent, in the quarter, primarily on increased cost of properties sold and higher sales commissions, it said.

For the hotel investments segment, revenue fell 13 percent on-year in the quarter to S$47.6 million, mainly due to decreased contributions from Thailand and the Seychelles, it said. Thailand faced an inventory shortage due to ongoing renovations at Banyan Tree Phuket and under performance from the Angsana Laguna Phuket on the absence of year-earlier major events, it said.

In the Seychelles, it disposed of the entire asset portfolio in November 2018.

But operating profit for the hotel investments segment rose by S$446,000, or 5 percent, in the quarter, mainly on a year-earlier write-off of certain Morocco hotel assets, it said.

It proposed a final dividend of 1.05 Singapore cent, up from 1.0 Singapore cent a year earlier.

In its outlook, Banyan Tree said it plans to open seven new resorts in the next 12 months.

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