Banyan Tree Holdings turned in results that were within projections for the July to September period. In the period, the Singapore-listed premier provider in the luxury hospitality scene posted revenue growth of 18.8 percent while it continued to suffer losses, albeit a 3.9 percent decrease for the quarter.
In a results briefing held earlier today, Ho KwonPing, chairman of Banyan Tree said, “The third quarter is a quiet time for us. Overall, our third quarter performance is within expectations.”
The three-month period ended 30 September 2012 saw Banyan Tree chalked up $78.7 million in revenue. The top line, which is composed of three business lines – hotel investments, property sales and fee-based segment, got a boost from a new revenue stream from Angsana Laguna Phuket, consolidation of Banyan Tree Seychelles’ results as a wholly-owned subsidiary and better performing Banyan Tree Phuket and Banyan Tree Bangkok.
Despite the improvement, the firm remained mired in the red. Losses incurred amounted to $2.8 million, $0.1 million less than the $2.9 million of losses in the previous corresponding period. Apart from the benefit of a non-recurring income of $2.6 million from insurance claim recorded in 2011, higher exchange loss and higher allowance for doubtful debts ate into profits.
As of the cumulative nine months this year, revenue of $241 million accounted for 73.1 percent of that in the whole of last year while earnings of $9.9 million has far surpassed FY11’s $1.6 million. “With the nine months results, we expect net profit to go into double-digit for the full-year,” Ho said as he shed some light on projections.
In the remaining three months of 2012 which is a high season for Banyan Tree, a brighter picture was painted. The company’s overall forward bookings were ahead of last year by 20 percent on the back of a 63 percent growth for owned hotels in Thailand on same store basis as the operation there staged a swift recovery from impacts from flood earlier in the year. Looking further ahead, eight new resorts and 10 spas under management are expected to commence operation in the next 12 months. In addition, Ho revealed that “there is visibility in the next three to four years that we would be opening roughly four to five hotels every year, many of them in China.”
New Hotel Brand
As part of the company’s focus on sustainable property development, Banyan Tree is amidst developing a third hotel brand which will entail offerings that are “much more affordable”. The new brand would bear the same hallmarks – namely design, innovation and quality experience – of the Banyan Tree and Angsana brands. Besides hotel management, the new brand seeks to enhance Banyan Tree’s property-based business segment. “There is a considerable segment of the property market that is concerned about design, quality and at the same time more price-conscious. Having recognised that, we are going to leverage on our past experiences to bring such offerings into the market,” Ho elaborated. “We are likely to roll out this product in Phuket by year-end.”
More concrete details will be announced at the company’s full-year results briefing.