(BusinessDesk) – Despite the Christchurch earthquakes, the 2011 financial year was kinder to hotel operator and property developer Millennium & Copthorne Hotels New Zealand, with the company returning to profit after a disaster in China in 2010.
MCK reported tax-paid profit for the year to Dec. 31 of $20.6 million, compared to a $10.1 million loss recorded for the previous year, even though the company lost three hotels in Christchurch after the Feb. 22 quake, which claimed 185 lives a year ago today.
While revenue from hotels was down 16.8 percent at $85 million on the year before, hotel occupancy and room margins in Auckland and Wellington during the Rugby World Cup were strong, while insurance payouts and sale of damaged property contributed $17.9 million to the bottom line. Total revenue for the year, excluding the latter contribution, was $99.5 million, compared with $114.5 million in the previous year.
The company says it’s confident it has sufficient business interruption cover for lost business in Christchurch in 2012 and in one case it has quit lease obligations in a confidential settlement with the landlord. As to the year ahead, income from the sale of a property development in the Chinese city of Chengdu will appear in the first-half figures.
The company is also “cautiously optimistic as we do expect all of our business units to be profitable in 2012,” said managing director BK Chiu in a statement to the NZX, issued after close of trading today.
Shares of MCK, which is ultimately 77.2 percent-owned by the Singaporean Hong Leong Group, last traded at 40 cents. Directors declared a fully imputed dividend of 1.2 cents per share, unchanged from last year, payable on May 11, ex dividend May 4.
The result equates to earnings per share of 5.9 cents, compared with a 2.9 cents-per-share loss in 2010. Trading conditions in New Zealand were being affected by weak arrivals numbers, especially from traditional European markets, and marketing was focusing on attracting tourists from China.
As to the company’s Chinese property development interests, MCK reported its 34 percent-owned investment in First Sponsor Capital had contributed $4.6 million to group profits in 2011, and that substantial sales had been achieved of both residential and commercial premises being developed in Chengdu.
Revenue and profit recognition requirements for the residential units are expected to be met in the first half of 2012, Chiu said.
Proceeds from the residential and commercial sales will finance the development of a 195-room Millennium & Copthorne hotel in the city.