REG - Mandarin OrientalJardine Matheson HdgJardine Strategic - Half Yearly Results <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> <Origin Href="QuoteRef">MOIL.SI</Origin> - Part 2
03/08/2017 10:10
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cash equivalents at end of period 157.2 181.5 182.5
Mandarin Oriental International Limited Notes to Condensed Financial Statements
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
The condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The
condensed financial statements have been prepared on a going concern basis. The condensed financial statements have not
been audited or reviewed by the Group's auditor pursuant to the UK Auditing Practices Board guidance on the review of
interim financial information.
There are no new standards or amendments, which are effective in the current accounting period and relevant to the Group's
operations, that have a significant effect on the Group's accounting policies. There have been no changes to the
accounting policies described in the 2016 annual financial statements.
2. REVENUE
Six months ended 30th June
2017US$m 2016US$m
By geographical area:
Hong Kong 109.8 109.3
Other Asia 51.5 51.8
Europe 72.9 87.3
The Americas 52.5 39.8
286.7 288.2
3. EBITDA FROM SUBSIDIARIES (EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION)
Six months ended 30th June
2017US$m 2016US$m
By geographical area:
Hong Kong 31.4 33.4
Other Asia 13.2 13.4
Europe 1.1 8.1
The Americas 3.8 2.6
Underlying EBITDA from subsidiaries 49.5 57.5
Non-trading items
- acquisition-related costs (note 7) - (1.8)
EBITDA from subsidiaries 49.5 55.7
Less: depreciation and amortization (27.0) (27.2)
Operating profit 22.5 28.5
4. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
EBITDAUS$m DepreciationandamortizationUS$m Operatingprofit/(loss)US$m NetfinancingchargesUS$m TaxUS$m Net profit/(loss)US$m
Six months ended 30th June 2017
By geographical area:
Other Asia 10.2 (4.2) 6.0 (0.7) (1.1) 4.2
Europe 0.9 (0.4) 0.5 - - 0.5
The Americas 0.9 (1.5) (0.6) (1.1) - (1.7)
12.0 (6.1) 5.9 (1.8) (1.1) 3.0
Six months ended 30th June 2016
By geographical area:
Other Asia 10.1 (3.8) 6.3 (0.7) (1.0) 4.6
Europe 0.6 (0.2) 0.4 - - 0.4
The Americas 2.6 (1.5) 1.1 (1.1) - -
13.3 (5.5) 7.8 (1.8) (1.0) 5.0
5. TAX
Six months ended 30th June
2017US$m 2016US$m
Tax (charged)/credited to profit and loss is analyzed as follows:
Current tax (5.9) (6.8)
Deferred tax 1.2 1.2
(4.7) (5.6)
By geographical area:
Hong Kong (4.0) (3.9)
Other Asia (0.1) (0.2)
Europe (0.6) (1.1)
The Americas - (0.4)
(4.7) (5.6)
Tax relating to components of other comprehensive income or expense comprises cash flow hedges of US$0.1 million (2016:
nil).
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
Share of tax of associates and joint ventures of US$1.1 million (2016: US$1.0 million) is included in share of results of
associates and joint ventures (note 4).
6. EARNINGS PER SHARE
Basic earnings per share are calculated on the profit attributable to shareholders of US$15.0 million (2016: US$22.9
million) and on the weighted average number of 1,257.2 million (2016: 1,255.9 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders of US$15.0 million (2016: US$22.9
million) and on the weighted average number of 1,261.0 million (2016: 1,261.2 million) shares after adjusting for the
number of shares which are deemed to be issued for no consideration under the share-based long-term incentive plans based
on the average share price during the period.
The weighted average number of shares is arrived at as follows:
Ordinary shares in millions
2017 2016
Weighted average number of shares for basic earnings per share calculation 1,257.2 1,255.9
Adjustment for shares deemed to be issued for no consideration under the share-based long-term incentive plans 3.8 5.3
Weighted average number of shares for diluted earnings per share calculation 1,261.0 1,261.2
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to
shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2017 2016
US$m Basicearningsper shareUS¢ Dilutedearningsper shareUS¢ US$m Basicearningsper shareUS¢ Dilutedearningsper shareUS¢
Profit attributable to shareholders 15.0 1.19 1.19 22.9 1.82 1.82
Non-trading items (note 7) - 1.8
Underlying profit attributable to shareholders 15.0 1.19 1.19 24.7 1.97 1.96
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding of the Group's underlying business
performance. Items classified as non-trading items include gains and losses arising from the sale of businesses,
investments and properties; impairment of non-depreciable intangible assets and other investments; provisions for the
closure of businesses; acquisition-related costs in business combinations; provisions against asset impairment and
writebacks; and other credits and charges of a non-recurring nature that require inclusion in order to provide additional
insight into underlying business performance.
An analysis of non-trading items after interest, tax and non-controlling interests is set out below:
Six months ended 30th June
2017US$m 2016US$m
Acquisition-related costs
- administration expenses - 1.8
8. PAYMENT ON MUNICH EXPANSION
The Group paid a further US$2.9 million instalment in respect of the land purchase price for the expansion of Mandarin
Oriental, Munich during the six months ended 30th June 2017. As at 30th June 2017 and 31st December 2016, cumulative costs
paid by the Group amounted to US$19.8 million and US$16.9 million respectively, the majority of which have been included
within Other Debtors pending transfer of title in the underlying land.
9. ACQUISITION OF MANDARIN ORIENTAL, BOSTON
In April 2016, the Group completed its US$140.0 million acquisition of Mandarin Oriental, Boston, a hotel that the Group
had managed since its opening in 2008. The consideration of US$140.0 million represented the fair value of the tangible
assets acquired at the acquisition date. There was no goodwill arising on acquisition.
10. DIVIDENDS
Six months ended 30th June
2017US$m 2016US$m
Final dividend in respect of 2016 of US¢2.50
(2015: US¢3.00) per share 31.4 37.7
An interim dividend in respect of 2017 of US¢1.50 (2016: US¢1.50) per share amounting to a total of US$18.9 million (2016:
US$18.8 million) has been declared by the Board and will be accounted for as an appropriation of revenue reserves in the
second half of the year ending 31st December 2017.
11. CAPITAL COMMITMENTS
Total capital commitments at 30th June 2017 and 31st December 2016 amounted to US$258.8 million and US$270.9 million
respectively.
12. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2017
and 31st December 2016 are as follows:
Loans and receivablesUS$m Derivatives used for hedgingUS$m Available-for-saleUS$m Other financial instruments at amortized costUS$m Total carrying amountUS$m Fair valueUS$m
30th June 2017
Assets
Other investments - - 10.7 - 10.7 10.7
Debtors 53.3 - - - 53.3 53.3
Bank and cash balances 157.2 - - - 157.2 157.2
210.5 - 10.7 - 221.2 221.2
Liabilities
Other non-current liabilities - (1.0) - - (1.0) (1.0)
Borrowings - - - (478.0) (478.0) (478.0)
Trade and other payables excluding non-financial liabilities - - - (124.2) (124.2) (124.2)
- (1.0) - (602.2) (603.2) (603.2)
Loans and receivablesUS$m Derivatives used for hedgingUS$m Available-for-saleUS$m Other financial instruments at amortized costUS$m Total carrying amountUS$m Fair valueUS$m
31st December 2016
Assets
Other investments - - 10.7 - 10.7 10.7
Debtors 65.8 - - - 65.8 65.8
Bank and cash balances 182.6 - - - 182.6 182.6
248.4 - 10.7 - 259.1 259.1
Liabilities
Borrowings - - - (479.9) (479.9) (479.9)
Trade and other payables excluding non-financial liabilities - (0.6) - (134.1) (134.7) (134.7)
- (0.6) - (614.0) (614.6) (614.6)
Fair value estimation
(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, the corresponding fair value measurements
are disclosed by level of the following fair value measurement hierarchy:
(a) Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or
indirectly ('observable current market transactions')
The fair values of derivative financial instruments are determined using rates quoted by the Group's bankers at the balance
sheet date. The rates for interest rate swaps and caps and forward foreign exchange contracts are calculated by reference
to market interest rates and foreign exchange rates.
The fair values of unlisted investments, which are classified as available-for-sale and mainly include club and school
debentures, are determined using prices quoted by brokers at the balance sheet date.
(b) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
The fair values of other unlisted securities, which are classified as available-for-sale, are determined using valuation
techniques by reference to observable current market transactions (including price-to earnings and price-to book ratios of
listed securities of entities engaged in similar industries) or the market prices of the underlying investments with
certain degree of entity specific estimates.
There were no changes in valuation techniques during the six months ended 30th June 2017 and the year ended 31st December
2016.
The table below analyzes financial instruments carried at fair value at 30th June 2017 and 31st December 2016, by the
levels in the fair value measurement hierarchy:
Observable current market transactionsUS$m Unobservableinputs US$m Total US$m
30th June 2017
Assets
Available-for-sale financial assets
- unlisted investments 2.1 8.6 10.7
Liabilities
Derivative designated at fair value
- through other comprehensive income (1.0) - (1.0)
31st December 2016
Assets
Available-for-sale financial assets
- unlisted investments 2.1 8.6 10.7
Liabilities
Derivative designated at fair value
- through other comprehensive income (0.6) - (0.6)
There were no transfers among the two categories during the six months ended 30th June 2017 and the year ended 31st
December 2016.
Movement of financial instruments which are valued based on unobservable inputs during the six months ended 30th June 2017
and the year ended 31st December 2016 are as follows:
Available-for-sale financial assetsUS$m
At 1st January 2017 8.6
Additions -
At 30th June 2017 8.6
At 1st January 2016 8.1
Additions 0.5
At 31st December 2016 8.6
(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank and cash balances, current creditors and current borrowings are assumed to
approximate their carrying amounts due to the short-term maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimated using the expected future payments
discounted at market interest rates.
13. RELATED PARTY TRANSACTIONS
In the normal course of business the Group undertakes a variety of transactions with certain of its associates and joint
ventures.
The most significant of such transactions are management fees of US$6.2 million (2016: US$6.5 million) received
from the Group's six (2016: six) associate and joint venture hotels which are based on long-term management agreements on
normal commercial terms.
There were no other related party transactions that might be considered to have a material effect on the financial position
or performance of the Group that were entered into or changed during the first six months of the current financial year.
Amounts of outstanding balances with associates and joint ventures are included in debtors and prepayments, as
appropriate.
Mandarin Oriental International Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following have been identified
previously as the areas of principal risk and uncertainty facing the Company, and they remain relevant in the second half
of the year:
l Economic and Financial Risk
l Commercial and Market Risk
l Pandemic, Terrorism and Natural Disasters
l Key Agreements
l Reputational Risk and Value of the Brand
l Regulatory and Political Risk
For greater detail, please refer to pages 89 and 90 of the Company's Annual Report for 2016, a copy of which is available
on the Company's website www.mandarinoriental.com.
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:
(a) the condensed financial statements have been prepared in accordance with IAS 34; and
(b) the interim management report includes a fair review of all information required to be disclosed by the Disclosure
Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
James Riley
Stuart Dickie
Directors
The interim dividend of US¢1.50 per share will be payable on 19th October 2017 to shareholders on the register of members at the close of business on 25th August 2017.
The shares will be quoted ex-dividend on the Singapore Exchange and the London Stock Exchange on 23rd and 24th August 2017, respectively. The share registers will be
closed from 28th August to 1st September 2017, inclusive. Shareholders will receive their cash dividends in United States dollars, unless they are registered on the
Jersey branch register where they will have the option to elect for sterling. These shareholders may make new currency elections for the 2017 interim dividend by
notifying the United Kingdom transfer agent in writing by 29th September 2017. The sterling equivalent of dividends declared in United States dollars will be calculated
by reference to a rate prevailing on 4th October 2017. Shareholders holding their shares through CREST in the United Kingdom will receive their cash dividends in
sterling only as calculated above. Shareholders holding their shares through The Central Depository (Pte) Limited ('CDP') in Singapore will receive their cash dividends
in United States dollars unless they elect, through CDP, to receive Singapore dollars. Shareholders on the Singapore branch register who wish to deposit their shares into
the CDP system by the dividend record date, being 25th August 2017, must submit the relevant documents to M & C Services Private Limited, the Singapore branch registrar,
no later than 5.00 p.m. (local time) on 24th August 2017.
Mandarin Oriental Hotel Group
Mandarin Oriental Hotel Group is an international hotel investment and management group with deluxe and first class hotels,
resorts and residences in sought-after destinations around the world. Having grown from its Asian roots into a global
brand, the Group now operates 30 hotels and eight residences in 20 countries and territories, with each property reflecting
the Group's oriental heritage and unique sense of place. Mandarin Oriental has a strong pipeline of hotels and residences
under development. The Group has equity interests in a number of its properties and adjusted net assets worth
approximately US$3.9 billion as at 30th June 2017.
Mandarin Oriental's aim is to be recognized as the world's best luxury hotel group. This will be achieved by investing in
the Group's exceptional facilities and its people, while maximizing profitability and long-term shareholder value. The
Group regularly receives recognition and awards for outstanding service and quality management. The Group is committed to
exceeding its guests' expectations through exceptional levels of hospitality, while maintaining its position as an
innovative leader in the hotel industry. The strategy of the Group is to open the hotels currently under development,
while continuing to seek further selective opportunities for expansion around the world.
The parent company, Mandarin Oriental International Limited, is incorporated in Bermuda and has a standard listing on the
London Stock Exchange, with secondary listings in Bermuda and Singapore. Mandarin Oriental Hotel Group International
Limited, which operates from Hong Kong, manages the activities of the Group's hotels. Mandarin Oriental is a member of the
Jardine Matheson Group.
- end -
For further information, please contact:
Mandarin Oriental Hotel Group International Limited
James Riley / Stuart Dickie (852) 2895 9288
Jill Kluge / Sally de Souza (852) 2895 9167
Brunswick Group Limited
Kirsten Molyneux (852) 3512 5053
As permitted by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom,
the Company will not be posting a printed version of the Half-Yearly Results announcement to shareholders. The Half-Yearly
Results announcement will remain available on the Company's website, www.mandarinoriental.com, together with other Group
announcements.
This information is provided by RNS
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