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Mixed fortunes for Mandarin Oriental
14th Aug 2003
The acquisition of the Rafael Group and the reopening of its London property has helped boost Mandarin Oriental Hotel Group’s interim results and offset falling occupancies at other properties.

“The rest of the year will be challenging, due to the decrease in corporate spending on travel, together with an anticipated reduction in leisure expenditure,” said chairman Simon Keswick.

Consolidated profit before interest and tax for the first six months ending 30 June was US$26 million, compared with US$18 million in the first half of 2000.

However, this increase was offset by higher interest charges of US$16 million, compared with US$12 million in the same period last year, which was largely attributable to the issue of convertible bonds in 2000 to finance the Rafael acquisition. Consolidated profit after tax and minority interests was US$6 million, compared with US$3 million in 2000.

Lower occupancy levels, despite higher average rates hurt the performance of its two hotels in Hong Kong. Occupancy fell from 76% in the first six months of 2000 to 66% at the Mandarin Oriental, Hong Kong, and from 86% to 78% at the Excelsior.

Economic uncertainty also had a negative impact on occupancy levels in New York and London, while the group’s other subsidiary hotels, in Manila and Jakarta, declined further due to continued local instability.

Its associate hotels, however, performed well, with advances in profitability achieved at most properties, particularly in Geneva and Macau.
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