The Hongkong and Shanghai Hotels (45) H1 2024 earnings summary

Executive summary

• The Peninsula London officially opened in June 2024, marking a major milestone with strong initial sales of branded residences and positive guest reviews, while Istanbul also received global recognition.

• Group revenue surged 89% year-over-year to HK$4.6 billion, mainly due to HK$1.7 billion from the sale of four Peninsula-branded London Residences and new hotel openings.

• Despite revenue growth, a net loss of HK$448 million and underlying loss of HK$257 million were recorded, impacted by higher depreciation, financing charges, and property revaluation losses.

• The Peninsula New York renovation is nearly complete, receiving good feedback and improved performance.

• Financial position remains strong with net assets of HK$35.9 billion and net external debt to total assets at 25%.

Financial highlights

• Consolidated revenue rose 89% year-over-year to HK$4.6 billion, driven by Peninsula London residence sales and new hotel contributions.

• EBITDA before pre-opening and project expenses increased 16% to HK$580 million; total EBITDA up 50% to HK$542 million.

• Net loss of HK$448 million, compared to a profit of HK$95 million last year; underlying loss of HK$257 million versus a profit of HK$25 million.

• Net assets per share at HK$21.53; adjusted net assets per share at HK$24.38.

• Net external borrowings reduced 7% to HK$14.1 billion.

Outlook and guidance

• Cautiously optimistic for the second half, with high seasonality and ramp-up at London and Istanbul expected to benefit results.

• Hong Kong leisure travel remains weak, with cross-border competition and geopolitical tensions impacting demand.

• Continued investment planned in existing assets, including renovations at Repulse Bay and Peak Tower.

• Focus remains on stabilizing new hotels, selling remaining Peninsula London residences, and long-term value creation.