Banyan Tree reports 1Q19 net profit tumbled 74 percent on BTAC dilution

Banyan Tree Holdings reported Wednesday its first quarter net profit tumbled 74 percent on-year to S$5.23 million after its interest in Banyan Tree Assets (China), or BTAC, was diluted.

Revenue for the quarter ended 31 March fell 17 percent on-year to S$81.22 million on lower contributions from all operating segments, the resort operator said in a filing to SGX.

Other income dropped 97 percent on-year to S$587,000 on the dilution of Banyan Tree’s interest in BTAC to 22.8 percent in the first quarter of 2018, from 50 percent previously, the filing said.

“Hotel Investments segment reported lower revenue as we stopped consolidating results from our hotel in Seychelles after we disposed it in November 2018. In addition, Thailand performance was affected by on-going renovations at Banyan Tree Phuket,” the company said.

In the property sales segment, revenue was lower due to the completion of Cassia Bintan phase two and Cassia Phuket phase two condominiums in the first quarter of 2018 and the fourth quarter of 2017, respectively, Banyan Tree said. Revenue for those sales were mostly recognized when they were handed over to buyers from the fourth quarter of 2017, it said.

In the first quarter of 2019, 10 units were recognized, compared with 29 in the year-ago period, it said.

Lower licensing fees from the China hotels also weighed on revenue from the fee-based segment, Banyan Tree said.

Administrative expenses fell 48 percent on-year to S$8.15 million on a higher foreign-exchange gain, lower legal and professional fees and lower operating lease expenses due to accounting changes, the filing said.

Sales and marketing expenses declined 23 percent on-year to S$3.23 million on lower marketing expenses for hotels and property sales, Banyan Tree said.

In its outlook, Banyan Tree said its hotel forward bookings for owned hotels in the second quarter were 11 percent higher on-year, while in the property sales segment, it had unrecognized revenue of S$222.1 million, with about 40 percent to be progressively recognized over the rest of the year.


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