REG - Mandarin Oriental Jardine Matheson Hdg - 2024 PRELIMINARY RESULTS
05/03/2025 13:45
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RNS Number : 5036Z Mandarin Oriental International Ltd 05 March 2025
Announcement
5 March 2025
The following announcement was issued today to a Regulatory Information
Service approved by the Financial Conduct Authority in the United Kingdom.
MANDARIN ORIENTAL INTERNATIONAL LIMITED
2024 PRELIMINARY ANNOUNCEMENT OF RESULTS
HIGHLIGHTS
· 13% growth in combined total revenue, up to US$2.1 billion, and 15%
growth in hotel management fees driven by strong RevPAR increases in all
regions
· Underlying profit after tax of US$75 million in 2024, 8% lower than
2023 due to lower one-off residences branding fees
· Accelerated growth with five new hotels and residences planned to open
in 2025
· Strong pipeline replenishment with the announcement of eight new
management contracts including the latest additions: Hôtel Lutetia in Paris,
the Conservatorium Hotel in Amsterdam, Puerto Rico in the Caribbean, and
Suzhou in China
· 41 hotels under management, a milestone in global footprint, with a
target to more than double by 2033
· Investing in capability now to achieve long-term targets and sustain
accelerated growth
· Paris property disposed for US$382 million advancing asset-light
strategy
· Final dividend of US¢3.50 per share, resulting in stable total
dividends of US¢5.00 per share
"With a new vision and a brand-led, guest-centric strategy, supported by
renewed dynamic leadership and effective governance, Mandarin Oriental is
well-positioned to enhance further its desirability and deliver accelerated
growth as an ultra-luxury hospitality brand, as well as to create value for
its shareholders, partners, and communities over the next 10 years."
Ben Keswick
Chairman
RESULTS
Year ended 31 December
2024 2023 Change
US$m US$m %
Combined total revenue of hotels under management((1)) 2,127.7 1,890.2 +13
Revenue 525.8 558.1 -6
Underlying EBITDA (Earnings before interest, tax, depreciation and 172.0 177.6 -3
amortisation)((2))
Underlying profit attributable to shareholders((3)) 74.7 81.0 -8
Revaluation loss on investment properties (171.0) (486.7) +65
Net gain on sale of subsidiaries and asset disposals 20.0 41.3 -52
Loss attributable to shareholders (78.6) (365.4) +78
US¢ US¢ %
Underlying earnings per share((3)) 5.91 6.41 -8
Loss per share (6.22) (28.91) +78
Dividends per share 5.00 5.00 -
US$ US$ %
Net asset value per share 2.25 2.34 -4
Adjusted net asset value per share((4)) 3.50 3.67 -5
Net debt/shareholders' funds 3% 8%
Net debt/adjusted shareholders' funds((4)) 2% 5%
(1) Combined revenue includes turnover of the Group's subsidiary hotels
in addition to 100% of revenue from associate, joint venture and managed
hotels.
(2) EBITDA of subsidiaries plus the Group's share of EBITDA of
associates and joint ventures.
(3) The Group uses 'underlying profit' in its internal financial
reporting to distinguish between ongoing business performance and non-trading
items, as more fully described in note 34 to the financial statements.
Management considers this to be a key measure which provides additional
information to enhance understanding of the Group's underlying business
performance.
(4) The Group's investment properties are carried at fair value on the
basis of valuations carried out by independent valuers at 31 December 2024.
The other freehold and leasehold interests are carried at amortised cost in
the consolidated balance sheet. Both the adjusted net asset value per share
and net debt/adjusted shareholders' funds at 31 December 2024 have included
the market value of the Group's freehold and leasehold interests.
The final dividend of US¢3.50 per share will be payable on 14 May 2025,
subject to approval at the Annual General Meeting to be held on 2 May 2025, to
shareholders on the register of members at the close of
business on 21 March 2025.
MANDARIN ORIENTAL INTERNATIONAL LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2024
YEAR IN REVIEW
2024 was a year of significant progress for Mandarin Oriental, marked by
strong growth, robust performance, and the launch of our brand-led,
guest-centric strategy, paving the way for accelerated further growth over the
next decade.
Global luxury hospitality has transitioned from a period of strong resurgence
in travel demand following the lifting of pandemic restrictions to a more
normal pace of growth in 2024. Against this backdrop, Mandarin Oriental has
reported good performance underpinned by its enduring brand desirability, an
expanding market-leading portfolio, and exceptional guest experiences.
In the Management Business, improvements in RevPAR performance were supported
by strong guest demand for our ultra-luxury hotels, and drove solid combined
total revenue performance across all regions, and considerable growth in hotel
management fee income, notably in Asia and Europe, the Middle East and Africa
('EMEA').
2024 Financial Performance
The Management Business reported an underlying profit after tax of US$34
million in 2024, compared to US$41 million in 2023. Strong growth in recurring
hotel management fee income was more than offset by reductions in one-off
residences branding fees, but recurring profitability continued to improve as
the Management Business scales.
The Owned Hotels reported a stable contribution of US$45 million profit after
tax in 2024. The majority of the Group's Owned Hotels delivered solid revenue
and profit growth, with Singapore in particular delivering higher profits
after the hotel's renovation in 2023. Tokyo and Madrid benefitted from robust
demand and achieved notable improvements in earnings. Earnings from Paris
reduced following the disposal of that hotel property together with its retail
units in mid-2024.
Overall, underlying profit after tax was US$75 million in 2024 compared to
US$81 million in 2023. Underlying earnings per share was US¢5.91, compared
with US¢6.41 in 2023. Non-trading losses of US$153 million primarily
comprised a non-cash revaluation of One Causeway Bay - the Group's
redevelopment site in Hong Kong, resulting in a loss attributable to
shareholders of US$78 million. Consolidated net debt significantly decreased
from US$225 million as at 31 December 2023 to US$94 million as at 31 December
2024, mainly due to the receipt of sale proceeds from Paris hotel and retail
properties, partially offset by investment in One Causeway Bay. Gearing was 2%
of adjusted shareholders' funds, reduced from 5% at the end of 2023.
The Directors recommend a final dividend of US¢3.50 per share. Together with
the interim dividend of US¢1.50 per share declared, total dividends are
US¢5.00 per share.
Sustainability
As we set our sights on accelerated growth over the next 10 years, we believe
firmly in increasing our positive social impact and reducing the intensity of
our environmental footprint. We set ambitious environmental targets across
energy and emissions intensity, the elimination of single-use plastics,
responsible sourcing, sustainable design practices and waste reduction.
GOVERNANCE
In 2024, a number of changes were made to the composition and operation of the
Company's Board and Committees to ensure an effective governance framework
that supports the Group's new strategy as a brand-led, guest-centric, global
luxury hospitality group.
Board Composition
We were delighted to welcome three new Independent Non-Executive Directors to
the Board: Cristina Diezhandino, Chief Marketing Officer and a member of
Diageo's executive committee, effective 1 August 2024; Fabrice Megarbane,
Chief Global Growth Officer and a member of L'Oreal's executive committee,
effective 1 August 2024; and Scott Woroch, Managing Director of Kadenwood
Partners, effective 4 November 2024.
With effect from 22 July 2024, John Witt stepped down as a Director of the
Company and as a member of the Company's Remuneration and Nominations
Committees.
Board Committees
With effect from 22 July 2024, Adam Keswick stepped down from the Nominations
Committee, and Graham Baker stepped down from the Remuneration Committee. Adam
remains as a Director.
On 24 July 2024, the Company's Board approved updated terms of reference for
each of the Audit, Remuneration and Nominations Committees, to align them
better with the future needs of the business.
Corporate Secretary
On 22 July 2024, Sean Ward was appointed as Corporate Secretary of the
Company, succeeding Jonathan Lloyd.
On behalf of the Board, I would like to thank John and Graham for their
contributions to the Group, and welcome Cristina, Fabrice, Scott and Sean.
OUTLOOK
Luxury hospitality presents enormous potential for future growth. With dynamic
leadership, clarity of vision and strategy, and effective governance, Mandarin
Oriental is strategically positioned to enhance further its desirability and
scale as an ultra-luxury hospitality brand, and to create value for its
shareholders, partners, and communities.
Ben Keswick
Chairman
Group Chief Executive's Review
In 2024, Mandarin Oriental launched its brand-led, guest-centric strategy and
reaffirmed its position as a leader in luxury hospitality anchored on our new
vision, Fans of the Exceptional, Every Day, Everywhere.
This new vision for Mandarin Oriental encapsulates our relentless commitment
to elevating our offering and delivering exceptional experiences wherever we
meet guests. In the rapidly evolving world of global hospitality, Mandarin
Oriental's Legendary Service, unique dual Asian heritage, and constant
innovation will maintain the brand at the pinnacle of luxury.
We have embarked on our new strategy for the next decade, focused on elevating
the desirability of the brand, doubling our portfolio in key global cities and
sought-after leisure destinations, innovating the guest experience to make
every moment exceptional, as well as generating value for our stakeholders. We
have shared this new strategy with our hotel owner partners, and our team of
over 15,000 colleagues, who are central to the success of the new vision. The
new strategy has been extremely well received, bringing clarity, confidence,
and pride to the Group. With this vision, we are now building the right
capabilities, governance, and culture to drive transformational growth.
2024 Performance
Summary of Performance: double-digit total combined revenue growth
Mandarin Oriental now manages 41 hotels, 12 residences, and 26 homes across 26
markets. In 2024, the Group reported solid operating performance. Combined
total revenue for hotels under management was US$2.1 billion for the year, up
13% from 2023. This improvement was fuelled by a 7% increase in RevPAR, as
occupancy continued to strengthen across all regions. Food & Beverage
('F&B') revenue was also 11% higher than 2023, contributing to the healthy
growth in top-line performance.
In Europe, the Middle East and Africa ('EMEA'), RevPAR was US$671, 4% above
the record levels set in 2023. RevPAR performance was notably better in
Madrid, Costa Navarino, and Zurich, as well as Riyadh which demonstrated the
strength of the brand after being rebranded as a Mandarin Oriental hotel in
early 2024.
In America, we demonstrated resilient performance and achieved growth in both
rates and occupancy, resulting in a 6% year-on-year improvement in RevPAR to
US$434.
In Asia, RevPAR was US$242, 14% above 2023. Both rates and occupancy were
supported by strong intra-regional travel demand, with Tokyo and Southeast
Asia performing particularly well. We continued to see strong domestic demand
in China. Our most recent launch, our second hotel in Beijing, has commanded
strong rate leadership demonstrating the strength and desirability of the
brand.
Management Business: +15% in hotel management fee income
With higher RevPARs and an expanded portfolio, we achieved another year of
very strong growth in hotel management fee income over previous record levels.
The 15% year-on-year improvement in hotel management fee income was primarily
driven by Asia and EMEA, while hotels in America showed steady performance.
EBITDA from the Management Business was lower in 2024 compared to 2023, as
better recurring hotel management fees were offset by reduced one-off branding
fees from the sale of branded residences. With growth of branded residences
being a high return priority for the Management Business, we continue to
replenish our residences pipeline to drive sustainable growth.
Owned Hotels: strong underlying growth
Following the disposal of our property in Paris, the Group owns or partially
owns 12 hotels across the globe. In 2024, Owned Hotels recorded 2% higher
EBITDA than in 2023. Mandarin Oriental, Tokyo, celebrating its 20th
anniversary this year, continued to excel in a competitive market and
delivered further revenue and profit growth in 2024. Mandarin Oriental,
Singapore returned strong revenues and profits after its repositioning. In
Europe, Mandarin Oriental Ritz, Madrid, achieved record EBITDA in 2024, and
was acclaimed with the highest distinction of three Michelin keys by The
MICHELIN Guide.
A Year IN REVIEW
In 2024, Mandarin Oriental reinforced its appeal as an ultra-luxury
hospitality brand and continued to build pipeline for future growth.
Elevating Mandarin Oriental to a Distinct Luxury Brand
Throughout 2024, we enhanced the desirability, awareness and reputation of the
Mandarin Oriental brand while reconnecting with our historical roots dating
back to 1876, when our iconic Bangkok hotel opened. As we enter 2025, we
unveil a refreshed visual identity for Mandarin Oriental. The brand's dual
heritage has always been cherished by our Fans, and our colleagues. It sets
the brand apart through Mandarin Oriental's fusion of grace and tradition,
entrepreneurial energy, mastery of craft, and unrivalled service. The
revitalisation of our visual identity personifies this unique and harmonious
foundation as we advance our transformative journey to elevating Mandarin
Oriental to a distinct luxury brand.
Throughout 2024, we engaged our audiences with extensive media coverage
through selected lifestyle publications and digital platforms. These efforts
have been complemented by our iconic 'I'm A Fan' advertising campaign,
featuring over 50 celebrity fans. To strengthen further this iconic
communication platform, we have announced Yuja Wang the acclaimed
world-renowned pianist as our new celebrity fan.
Mandarin Oriental has received global recognition, with over 200 prestigious
awards celebrating the exceptional experiences we craft and the unwavering
dedication of our colleagues. Highlights include Best Luxury Hotel Brand in
the annual Luxury Travel Intelligence, ranking #1 for the second consecutive
year; World's Best Hotel Spa Brand by World Spa Awards for the third
consecutive year; placement of 23 hotels in Forbes 5-Star Awards by Forbes
Travel Guide. One of our founding hotels - Mandarin Oriental, Bangkok - was
honoured as Best Hotel in the World and Best Hotel in Asia by The Telegraph
Hotel Awards 2024. And many new Michelin star accolades were received as
testament to our culinary excellence.
As we continue to elevate our guest experience, we announced the enhancement
of The Landmark Mandarin Oriental, Hong Kong. This rejuvenation will bring a
transformed experience to our guests with innovative dining concepts and
elevated guestrooms, setting a new benchmark for ultra-luxury hospitality in
the heart of Central Hong Kong.
Accelerating Expansion of the Management Business Globally
Our ambition is for long-term, sustainable growth, and over the course of 2024
the Group has made strides towards our strategic goals.
In January, we rebranded Mandarin Oriental Al Faisaliah, Riyadh - our first
flag in Saudi Arabia, and opened Mandarin Oriental Residences, Fifth Avenue in
New York. We opened three new hotels in the rest of the year: Mandarin
Oriental Mayfair, London in the heart of London's art and fashion district,
Mandarin Oriental, Muscat overlooking the Gulf of Oman, and Mandarin Oriental
Qianmen, Beijing, our second property in Beijing, delivering one of the
highest rates in mainland China shortly after its opening in September.
Since the start of 2024, we have secured eight exceptional hotel and
residences projects, reflecting the confidence our Owner Partners have in our
brand and Mandarin Oriental as a luxury operator. These projects are:
· A collection of villas in the heart of Rome forming a unique urban
resort;
· A secluded beach resort with branded residences on Bali's south
coast;
· A beach resort with branded residences on Mexico's Riviera Maya on
the Yucatan Peninsula;
· Stunning branded residences in Abu Dhabi's new cultural district;
· The rebranding of the iconic century-old Hôtel Lutetia in Paris, a
symbol of Parisian elegance and culture situated on the left bank,
complementing Mandarin Oriental, Paris on Rue Saint Honoré;
· The rebranding of the Conservatorium Hotel in Amsterdam, the Group's
debut project in the Netherlands;
· A beach resort with branded residences facing Boquerón Bay in Puerto
Rico; and
· A luxury hotel in Suzhou in mainland China featuring panoramic views
of Jinji Lake.
With these additions, our pipeline now comprises 32 hotels and 18 residences.
The Group is now expanding at an unprecedented pace, and we will continue to
bring Mandarin Oriental to more of the destinations that our discerning guests
desire. To ensure successful delivery of this growth plan and pave the way for
further growth we have bolstered our leadership, technical, and operational
capabilities.
In December, we announced full ownership of Mandarin Oriental Exceptional
Homes, our collection of the world's finest private vacation homes and
mansions. This business was launched in 2022 and has expanded to a global
portfolio featuring 26 properties in sought-after destinations today. We look
forward to accelerating growth, enhancing our offering, and identifying many
more exceptional private homes for this collection.
Reviewing Owned Assets
We constantly review our deployment of capital to ensure alignment with our
strategy. In mid-2024, the Group completed the disposal of our Paris hotel and
retail properties for US$382 million and recognised a gain on disposal of
US$20 million. A new long-term hotel management contract has been agreed
together with a renovation plan to strengthen the positioning of Mandarin
Oriental, Paris.
Our Grade A mixed-use development in Hong Kong, One Causeway Bay, topped out
in July 2024 and is due to be completed by the second half of 2025.
Investing in People and Transforming Culture
In 2024, we strengthened our approach to support talent and leadership. We
launched our Colleague Value Proposition - We're fans. Are you? This
proposition reflects Mandarin Oriental's commitment to a holistic approach to
Colleague experience and engagement, and our dedication to putting our people
at the heart of everything we do. We announced a partnership with Sommet
Education, a global leader in hospitality management education. This
collaboration signals our commitment to advancing the hospitality profession
by nurturing future talent, championing diversity and delivering innovative
learning and development programmes.
Purposeful operations rooted in communities
As Mandarin Oriental continues on a journey of accelerated growth, we will
continue to serve in balance our guests, colleagues, partners, communities,
and planet. Endeavouring to do the right things earned us three World
Sustainable Travel & Hospitality Awards in 2024, recognising our
Sustainable Supply Chain Programme, Sustainable Development initiatives, and
commitment as a Sustainable Employer. In 2024, the Group spent 78,000 hours
giving back to local communities, a 50% increase over the prior year. These
endeavours highlight our commitment to community welfare.
The year ahead
In 2024, we united in a bold growth ambition for the next decade. In 2025, we
expect to advance in executing against the strategy. Five new hotels and
residences are planned to open over the course of the year: our second hotels
in Paris and Dubai, our debuts in Amsterdam and Vienna, as well as our first
residences in Madrid. We will launch a new mobile application aiming at
simplifying our guests' journey. We will continue to deploy our refreshed
brand identity and renew our communication, bringing new celebrity fans on
board and launching more creative and storytelling content to support brand
desirability. We will soon be launching the 150th anniversary of our iconic
Bangkok property: in addition to innovations and renovation projects we will
announce a series of brand building events starting in the fourth quarter of
2025 and running through the whole of 2026.
Through elevating our brand across all touchpoints, expanding our global
footprint, and continuing to shape the modern luxury hospitality landscape, we
honour our commitment to crafting more time-enriching experiences that
transform the ordinary to the exceptional, and more guests to fans.
Laurent Kleitman
Group Chief Executive
Mandarin Oriental International Limited
Consolidated Profit and Loss Account
for the year ended 31 December 2024
2024 2023
Underlying Non-trading Total Underlying Non-trading Total
business Items US$m business Items US$m
performance US$m performance US$m
US$m US$m
Revenue (note 2) 525.8 - 525.8 558.1 - 558.1
Cost of sales (282.2) - (282.2) (308.7) - (308.7)
Gross profit 243.6 - 243.6 249.4 - 249.4
Selling and distribution costs (36.9) - (36.9) (35.6) - (35.6)
Administration expenses (121.4) - (121.4) (116.7) - (116.7)
Other operating (expense)/income - (1.4) (1.4) 5.2 (0.4) 4.8
Change in fair value of investment properties - (171.0) (171.0) - (486.7) (486.7)
Net gain on sale of subsidiaries and asset disposals (notes 10 and 15) - 29.6 29.6 - 43.8 43.8
Operating (loss)/profit (note 3) 85.3 (142.8) (57.5) 102.3 (443.3) (341.0)
Financing charges (10.1) (0.4) (10.5) (17.6) - (17.6)
Interest income 5.5 1.1 6.6 7.7 - 7.7
Net financing charges (4.6) 0.7 (3.9) (9.9) - (9.9)
Share of results of associates and joint ventures (note 4) 14.2 (0.9) 13.3 (0.3) (0.6) (0.9)
(Loss)/profit before tax 94.9 (143.0) (48.1) 92.1 (443.9) (351.8)
Tax (note 5) (20.0) (10.3) (30.3) (11.0) (2.5) (13.5)
(Loss)/profit after tax 74.9 (153.3) (78.4) 81.1 (446.4) (365.3)
Attributable to:
Shareholders of the Company (notes 6 and 7) 74.7 (153.3) (78.6) 81.0 (446.4) (365.4)
Non-controlling interests 0.2 - 0.2 0.1 - 0.1
74.9 (153.3) (78.4) 81.1 (446.4) (365.3)
US¢ US¢ US¢ US¢
(Loss)/earnings per share (note 6)
- basic and diluted 5.91 (6.22) 6.41 (28.91)
Mandarin Oriental International Limited
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
US$m US$m
Loss for the year (78.4) (365.3)
Other comprehensive expense
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans (0.5) (2.5)
Tax on items that will not be reclassified 0.1 0.4
(0.4) (2.1)
Items that may be reclassified subsequently to profit or loss:
Net exchange translation differences
- net (loss)/gain arising during the year (13.1) 34.0
- transfer to profit and loss 39.2 33.5
Cash flow hedges
- net loss arising during the year (3.2) (15.1)
Tax relating to items that may be reclassified 0.6 1.3
Share of other comprehensive (expense)/income of associates (0.8) 0.4
and joint ventures
22.7 54.1
Other comprehensive income for the year, net of tax 22.3 52.0
Total comprehensive expense for the year (56.1) (313.3)
Attributable to:
Shareholders of the Company (56.0) (314.2)
Non-controlling interests (0.1) 0.9
(56.1) (313.3)
Mandarin Oriental International Limited
Consolidated Balance Sheet
at 31 December 2024
2024 2023
US$m US$m
Net assets
Intangible assets 57.0 43.7
Tangible assets (note 8) 589.1 618.6
Right-of-use assets 216.4 229.1
Investment properties (note 9) 2,085.6 2,060.3
Associates and joint ventures 143.2 155.8
Other investments 13.3 14.0
Deferred tax assets 13.0 14.0
Pension assets 0.5 0.6
Non-current debtors 61.4 10.9
Non-current assets 3,179.5 3,147.0
Stocks 5.2 5.0
Current debtors 115.5 80.3
Current tax assets 1.2 1.7
Cash and bank balances 215.0 178.8
336.9 265.8
Assets classified as held for sale (note 10) - 331.9
Current assets 336.9 597.7
Current creditors (188.5) (158.0)
Current borrowings (note 11) (103.7) (414.9)
Current lease liabilities (6.1) (5.8)
Current tax liabilities (23.2) (22.1)
(321.5) (600.8)
Liabilities directly associated with assets classified as held for sale - (24.1)
(note 10)
Current liabilities (321.5) (624.9)
Net current assets/(liabilities) 15.4 (27.2)
Long-term borrowings (note 11) (204.8) (0.6)
Non-current lease liabilities (96.3) (110.6)
Deferred tax liabilities (44.8) (42.0)
Pension liabilities (0.1) -
Non-current creditors (2.7) (1.1)
Non-current liabilities (348.7) (154.3)
2,846.2 2,965.5
Total equity
Share capital 63.2 63.2
Share premium 500.9 500.9
Revenue and other reserves 2,277.1 2,396.3
Shareholders' funds 2,841.2 2,960.4
Non-controlling interests 5.0 5.1
2,846.2 2,965.5
Mandarin Oriental International Limited
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
Share Share Capital Revenue Asset revaluation reserves US$m Hedging Exchange Attributable to shareholders of the Company US$m Attributable to non- Total
capital premium reserves reserves reserves reserves controlling interests equity
US$m US$m US$m US$m US$m US$m US$m US$m
2024
At 1 January 63.2 500.9 258.9 (815.9) 3,023.2 1.7 (71.6) 2,960.4 5.1 2,965.5
Total comprehensive income - - - (79.0) - (2.6) 25.6 (56.0) (0.1) (56.1)
Dividends paid by the Company - - - (63.2) - - - (63.2) - (63.2)
At 31 December 63.2 500.9 258.9 (958.1) 3,023.2 (0.9) (46.0) 2,841.2 5.0 2,846.2
2023
At 1 January 63.2 500.7 258.9 (428.8) 3,023.2 15.4 (138.5) 3,294.1 3.5 3,297.6
Total comprehensive income - - - (367.6) - (13.7) 67.1 (314.2) 0.9 (313.3)
Dividends paid by the Company - - - (19.0) - - - (19.0) - (19.0)
Unclaimed dividend forfeited - - - 0.1 - - - 0.1 - 0.1
Subsidiary disposed of - - 0.2 (0.6) - - (0.2) (0.6) 0.7 0.1
Transfer - 0.2 (0.2) - - - - - - -
At 31 December 63.2 500.9 258.9 (815.9) 3,023.2 1.7 (71.6) 2,960.4 5.1 2,965.5
Revenue reserves as at 31 December 2024 included cumulative fair value losses
on the investment property under development of US$1,378.8 million (2023:
US$1,207.8 million).
Mandarin Oriental International Limited
Consolidated Cash Flow Statement
for the year ended 31 December 2024
2024 2023
US$m US$m
Operating activities
Operating loss (note 3) (57.5) (341.0)
Depreciation, amortisation and impairment 42.8 51.1
Other non-cash items 143.1 440.3
Movements in working capital (21.0) (2.8)
Interest received 5.3 8.5
Interest and other financing charges paid (12.2) (17.6)
Tax paid for underlying business performance (14.7) (2.0)
Tax paid for sale of subsidiaries and asset disposals (8.9) (0.6)
Total tax paid (23.6) (2.6)
76.9 135.9
Dividends and interest from associates and joint ventures 1.0 5.3
Cash flows from operating activities 77.9 141.2
Investing activities
Purchase of tangible assets (13.5) (13.7)
Additions to investment properties (162.7) (71.0)
Purchase of intangible assets (11.7) (6.4)
Purchase of Mandarin Oriental Exceptional Homes business (note 15) (4.7) -
Purchase of other investments (0.1) (0.1)
Advance to associates and joint ventures - (20.7)
Repayment of loans to associates and joint ventures 0.1 67.2
Sale of subsidiaries (note 13) 215.7 75.6
Net proceeds from asset disposals (note 10) 105.4 -
Cash flows from investing activities 128.5 30.9
Financing activities
Drawdown of borrowings 422.2 58.1
Repayment of borrowings (530.5) (247.9)
Principal elements of lease payments (6.5) (6.2)
Dividends paid by the Company (note 12) (63.2) (19.0)
Cash flows from financing activities (178.0) (215.0)
Net increase/(decrease) in cash and cash equivalents 28.4 (42.9)
Cash and cash equivalents at 1 January 190.3 226.2
Effect of exchange rate changes (3.7) 7.0
Cash and cash equivalents at 31 December 215.0 190.3
At 31 December 2023, cash and cash equivalents of US$190.3 million included
cash and bank balances of US$11.5 million classified as assets held for sale
(note 10).
Mandarin Oriental International Limited
Notes
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
The financial information contained in this announcement has been based on the
audited results for the year ended 31 December 2024 which have been prepared
in conformity with International Financial Reporting Standards ('IFRS
Accounting Standards'), including International Accounting Standards ('IAS')
and Interpretations issued by the International Accounting Standards Board
('IASB'). The financial statements have been prepared on a going concern
basis.
There are no amendments, which are effective in 2024 and relevant to the
Group's operations, that have a significant impact on the Group's results,
financial position and accounting policies.
The Group has not early adopted any standard, interpretation or amendments
that have been issued but not yet effective.
2. REVENUE
2024 2023
US$m US$m
By business activity:
Hotel ownership 453.6 486.8
Hotel & Residences branding and management 95.3 94.5
Less: intra-segment revenue (23.1) (23.2)
525.8 558.1
By geographical area:
Asia 232.2 219.9
Europe, the Middle East and Africa ('EMEA') 245.3 288.6
America 48.3 49.6
525.8 558.1
From contracts with customers:
Recognised at a point in time 155.3 163.7
Recognised over time 356.6 375.8
511.9 539.5
From other sources:
Rental income 13.9 18.6
525.8 558.1
3. EBITDA (EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION) AND OPERATING LOSS FROM SUBSIDIARIES
2024 2023
US$m US$m
By business activity:
Hotel ownership 85.7 101.9
Hotel & Residences branding and management 45.9 52.5
Property development (3.5) (1.0)
Underlying EBITDA from subsidiaries 128.1 153.4
Non-trading items (note 7)
- change in fair value of investment properties (171.0) (486.7)
- change in fair value of other investments (0.8) (0.4)
- (loss)/gain on sale of subsidiaries (31.2) 43.8
- gain on asset disposals 60.8 -
- acquisition-related costs for Mandarin Oriental Exceptional Homes business (0.6) -
(142.8) (443.3)
EBITDA from subsidiaries (14.7) (289.9)
Underlying depreciation and amortisation from subsidiaries (42.8) (51.1)
Operating loss (57.5) (341.0)
By geographical area:
Asia 44.3 41.5
EMEA 83.8 108.5
America - 3.4
Underlying EBITDA from subsidiaries 128.1 153.4
4. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Depreciation Operating Net Net
and profit/ financing profit/
EBITDA amortisation (loss) charges Tax (loss)
US$m US$m US$m US$m US$m US$m
2024
By business activity:
Hotel ownership 43.2 (15.9) 27.3 (9.1) (4.2) 14.0
Other 0.7 (0.5) 0.2 (0.1) 0.1 0.2
Underlying 43.9 (16.4) 27.5 (9.2) (4.1) 14.2
Non-trading items (note 7)
- closure costs (0.9) - (0.9) - - (0.9)
43.0 (16.4) 26.6 (9.2) (4.1) 13.3
By geographical area:
Asia 29.9 (11.7) 18.2 (3.4) (4.2) 10.6
EMEA 7.6 (3.1) 4.5 (3.8) 0.1 0.8
America 6.4 (1.6) 4.8 (2.0) - 2.8
Underlying 43.9 (16.4) 27.5 (9.2) (4.1) 14.2
Non-trading items (note 7)
- closure costs (0.9) - (0.9) - - (0.9)
43.0 (16.4) 26.6 (9.2) (4.1) 13.3
2023
By business activity:
Hotel ownership 23.8 (15.2) 8.6 (8.9) 0.2 (0.1)
Other 0.4 (0.5) (0.1) (0.1) - (0.2)
Underlying 24.2 (15.7) 8.5 (9.0) 0.2 (0.3)
Non-trading items (note 7)
- closure costs (0.6) - (0.6) - - (0.6)
23.6 (15.7) 7.9 (9.0) 0.2 (0.9)
By geographical area:
Asia 10.4 (10.1) 0.3 (3.3) 0.1 (2.9)
EMEA 5.5 (3.6) 1.9 (3.3) 0.1 (1.3)
America 8.3 (2.0) 6.3 (2.4) - 3.9
Underlying 24.2 (15.7) 8.5 (9.0) 0.2 (0.3)
Non-trading items (note 7)
- closure costs (0.6) - (0.6) - - (0.6)
23.6 (15.7) 7.9 (9.0) 0.2 (0.9)
5. TAX
2024 2023
US$m US$m
Tax charged to profit and loss is analysed as follows:
Current tax (25.8) (11.8)
Deferred tax (4.5) (1.7)
(30.3) (13.5)
By business activity:
Hotel ownership (20.3) (7.2)
Hotel & Residences branding and management (10.0) (6.3)
(30.3) (13.5)
By geographical area:
Asia (9.3) (8.3)
EMEA (19.8) (4.3)
America (1.2) (0.9)
(30.3) (13.5)
Tax relating to components of other comprehensive income is analysed as
follows:
Remeasurements of defined benefit plans 0.1 0.4
Cash flow hedges 0.6 1.3
0.7 1.7
Tax on profits has been calculated at rates of taxation prevailing in the
territories in which the Group operates.
In 2024, current tax included non-trading capital gain tax charges of US$5.4
million in relation to the sale of 100% ownership stake in the owning
companies of Mandarin Oriental, Paris (the 'Paris Hotel'), and US$4.9 million
in relation to the sale of the two retail units adjoining the Paris Hotel
(note 10).
In 2023, current tax included a non-trading capital gain tax charge of US$2.5
million in relation to the sale of 96.9% ownership stake in the owning company
of Mandarin Oriental, Jakarta (note 15).
The Group is within the scope of the OECD Pillar Two model rules, and has
applied the exception to recognising and disclosing information about deferred
tax assets and liabilities relating to Pillar Two income taxes from 1 January
2023.
Pillar Two legislation has been enacted or substantially enacted in certain
jurisdictions in which the Group operates. The legislation has become
effective for the Group's financial year ended 31 December 2024. The Group is
in scope of the enacted or substantively enacted legislation and has performed
an assessment of the Group's potential exposure to Pillar Two income taxes.
The assessment of the potential exposure to Pillar Two income taxes is based
on the latest financial information for the year ended 31 December 2024 of the
constituent entities in the Group. Based on the assessment, the effective tax
rates in most of the jurisdictions in which the Group operates are above 15%.
However, there are a limited number of jurisdictions where the effective tax
rate is slightly below or close to 15%. The income tax expense related to
Pillar Two income taxes in the relevant jurisdictions is assessed to be
immaterial.
Share of tax charge of associates and joint ventures of US$4.1 million (2023:
share of tax credit of US$0.2 million) is included in share of results of
associates and joint ventures (note 4).
6. (LOSS)/EARNINGS PER SHARE
Loss per share is calculated using loss attributable to shareholders of
US$78.6 million (2023: US$365.4 million) and the weighted average number of
1,263.8 million (2023: 1,263.8 million) shares in issue during the year.
Additional earnings per share are also calculated based on underlying profit
attributable to shareholders. A reconciliation of loss/earnings is set out
below:
2024 2023
(Loss)/ (Loss)/ earnings
US$m earnings per share US¢
per share US$m
US¢
Loss attributable to shareholders (78.6) (6.22) (365.4) (28.91)
Non-trading items (note 7) 153.3 446.4
Underlying profit attributable to shareholders 74.7 5.91 81.0 6.41
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding
of the Group's underlying business performance. Items classified as
non-trading items include fair value gains or losses on revaluation of
investment properties and investments which are measured at fair value through
profit and loss; gains and losses arising from the sale of businesses,
investments and properties; impairment of non-depreciable intangible assets
and other investments; provisions for the closure of businesses;
acquisition-related costs in business combinations; and other credits and
charges of a non-recurring nature that require inclusion in order to provide
additional insight into underlying business performance.
An analysis of non-trading items after interest, tax and non-controlling
interests is set out below:
2024 2023
US$m US$m
Change in fair value of investment properties (note 9) (171.0) (486.7)
Change in fair value of other investments (0.8) (0.4)
(Loss)/gain on sale of subsidiaries (notes 10 and 15) (36.6) 41.3
Gain on asset disposals (note 10) 55.9 -
Net financing income on deferred consideration receivable (note 10) 0.7 -
Acquisition-related costs for Mandarin Oriental Exceptional Homes business (0.6) -
(152.4) (445.8)
Share of results of associates and joint ventures (0.9) (0.6)
- closure costs (note 4)
(153.3) (446.4)
8. TANGIBLE ASSETS
2024 2023
US$m US$m
Opening net book value 618.6 916.3
Exchange differences (11.1) 34.0
Additions 13.5 13.1
Disposals - (0.8)
Classified as held for sale (note 10) - (305.1)
Depreciation charge (31.9) (38.9)
Closing net book value 589.1 618.6
9. INVESTMENT PROPERTIES
2024 2023
US$m US$m
Opening fair value 2,060.3 2,472.6
Exchange differences 14.2 (5.5)
Additions 182.1 79.9
Decrease in fair value (171.0) (486.7)
Closing fair value 2,085.6 2,060.3
At 31 December 2024, investment properties comprised a commercial investment
property under development of US$1,996.6 million (2023: US$1,971.9 million)
and a completed residential investment property of US$89.0 million (2023:
US$88.4 million).
10. ASSETS CLASSIFIED AS HELD FOR SALE
2024 2023
US$m US$m
Intangible assets - 0.1
Tangible assets - 305.1
Deferred tax assets - 0.1
Current assets* - 26.6
Total assets - 331.9
Current liabilities - (24.1)
In December 2023, the Group signed an option to sell its interests in the
owning companies of the Paris Hotel to SLH Hotels Srl ('Statuto Group'), the
owner of Mandarin Oriental, Milan. The Group has agreed a new long-term
management agreement to manage and brand the Paris Hotel. The two retail units
(the 'Retail Units') adjoining the Paris Hotel were not included in the sale
and were being actively marketed for sale at 31 December 2023. The Group
purchased the building containing the Paris Hotel and the Retail Units in
2013, and divided them into separate titles before the completion of the sale
of the Paris Hotel to Statuto Group at a gross consideration of US$221.5
million in April 2024. The Group has recognised a post-tax, non-trading loss
of US$36.6 million which included cumulative exchange translation loss of
US$28.2 million and a tax charge of US$5.4 million in 2024 (notes 5 and 7).
In July 2024, the Group completed the disposal of the Retail Units to Lavender
Propco SNC, an entity controlled by Blackstone Europe LLP at a total gross
consideration of US$160.5 million, consisting of US$106.5 million cash
consideration and US$54.0 million deferred consideration receivable within
three years according to the deed of sale. The Group has recognised a
post-tax, non-trading gain of US$55.9 million which included cumulative
exchange translation loss of US$11.0 million and a tax charge of US$4.9
million. A net financing income on the deferred consideration of US$0.7
million has been recognised as non-trading gain (notes 5 and 7).
* Included cash and bank balances of US$11.5 million.
11. BORROWINGS
2024 2023
US$m US$m
Bank loans 308.5 415.5
103.7 414.9
Current
Long-term 204.8 0.6
308.5 415.5
The Group has borrowing facilities of US$322.0 million due to mature within
2025. In February 2025, the Group has refinanced bank facilities of US$359.0
million for three to five years.
12. DIVIDENDS
2024 2023
US$m US$m
Final dividend in respect of 2023 of US¢3.50 44.2 -
(2022: nil) per share
Interim dividend in respect of 2024 of US¢1.50 19.0 19.0
(2023: US¢1.50) per share
63.2 19.0
A final dividend in respect of 2024 of US¢3.50 (2023: US¢3.50) per share
amounting to a total of US$44.2 million (2023: US$44.2 million) is proposed by
the Board. The dividend proposed will not be accounted for until it has been
approved at the 2025 Annual General Meeting. The amount will be accounted for
as an appropriation of revenue reserves in the year ending 31 December 2025.
13. SALE OF SUBSIDIARIES
In April 2024, the Group completed the sale of 100% ownership stake in the
owning companies of the Paris Hotel to Statuto Group (note 10).
In June 2023, the Group completed the sale of 96.9% ownership stake in the
owning company of Mandarin Oriental, Jakarta, to P.T. Astra Land Indonesia, a
subsidiary of Jardine Matheson Holdings Limited, the Group's ultimate holding
company (note 15).
Net cash inflow for the sale of subsidiaries is summarised as follows:
2024 2023
US$m US$m
Non-current assets 218.8 4.8
Currents assets 5.6 5.2
Non-current liabilities - (0.6)
Current liabilities (5.7) (4.0)
Non-controlling interests - 0.4
Net assets 218.7 5.8
Cumulative exchange translation difference 28.2 33.1
(Loss)/profit on disposal before tax (31.2) 43.8
Sales proceeds (net of selling expenses) 215.7 82.7
Adjustment for deferred payments - (3.2)
Cash and cash equivalents of a subsidiary disposed of - (3.9)
Net cash inflow 215.7 75.6
14. CAPITAL COMMITMENTS
At 31 December 2024, total capital commitments of the Group amounted to
US$192.3 million (2023: US$354.6 million).
15. RELATED PARTY TRANSACTIONS
The parent company of the Group is Jardine Strategic Limited ('JSL') and the
ultimate holding company of the Group is Jardine Matheson Holdings Limited
('JMH'). Both JMH and JSL are incorporated in Bermuda.
In the normal course of business, the Group undertakes a variety of
transactions with its associates and joint ventures, and with JMH's
subsidiaries, associates and joint ventures. The more significant of these
transactions are described below:
The Group managed six (2023: six) associate and joint venture hotels and
received management fees of US$18.9 million (2023: US$14.3 million) based on
long-term management agreements on normal commercial terms.
The Group provided hotel management services to Hongkong Land group ('HKL'), a
subsidiary of JMH. Total management fees received from HKL in 2024 amounted to
US$2.1 million (2023: US$2.2 million), based on long-term management
agreements on normal commercial terms.
The Group pays a management fee to Jardine Matheson Limited, a subsidiary of
JMH, in consideration for certain management consultancy services. The fee is
calculated as 0.5% of the Group's net profit. No fee was paid in 2024 and 2023
(due to net loss).
In respect of One Causeway Bay, the Group paid consultancy fees of US$2.1
million (2023: US$1.9 million) to HKL in consideration for project management
consultancy services. In addition, Gammon Construction Limited ('GCL'), a
joint venture of JMH, completed value of works of US$164.2 million (2023:
US$59.8 million). The HKL agreement and GCL contract were arranged on normal
commercial terms.
In November 2024, the Group completed the acquisition of Mandarin Oriental
Exceptional Homes business from Stay One Degree Limited, an associate company
of the Group, at a total consideration of US$5.6 million, consisting of US$4.7
million cash consideration and US$0.9 million contingent consideration payable
within two years upon the fulfilment of certain criteria according to the
business sale agreement.
In June 2023, the Group completed the sale of 96.9% ownership stake in the
owning company of Mandarin Oriental, Jakarta in Indonesia, to P.T. Astra Land
Indonesia, a subsidiary of JMH, at a total consideration of US$84.8 million.
The Group has recognised a post-tax, non-trading gain of US$41.3 million which
included cumulative exchange translation loss of US$33.1 million and a tax
charge of US$2.5 million (notes 7 and 13). The Group has retained the hotel
management contracts to manage and brand the hotel.
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 year.
The outstanding balances with associates and joint ventures are included in
debtors as appropriate.
Mandarin Oriental International Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control.
The process by which the Group identifies and manages risks will be set out in
more detail in the Corporate Governance section of the Company's 2024 Annual
Report (the 'Report'). Set out below are the principal risks and uncertainties
facing the Company as required to be disclosed pursuant to the Disclosure
Guidance and Transparency Rules, as well as a summary of the steps taken to
mitigate those risks.
These risks are in addition to the matters referred to in the Chairman's
Statement, Group Chief Executive's Review and other parts of the Report.
Ranking Risk Risk description
1 - Reputation risk and brand name Adverse perception of guest or employee health or safety, the occurrence of
accidents or injuries, cyber-attacks, security breaches, natural disasters,
crime, failure of suppliers, business partners to comply with relevant
regulations and contractual requirements relating to a variety of issues could
harm our reputation and create adverse publicity and cause a loss of consumer
confidence in our business and brand.
Mitigations
1. Establish a range of financial policies, procedures and audits to prevent
and mitigate risk impacts.
2. Establish a range of service standards and audits to ensure consistency
of service quality.
3. Ensure media response plans are in place to manage any negative
publicity.
4. Maintain a global Sustainability programme to monitor and minimise the
impact of the Group's operations on the environment and support the Group's
goal of acting in a socially responsible manner.
5. The Group's trademark protection programme proactively registers and
monitors the Group's core marks in key markets and pursues infringements as
appropriate.
6. Operate an extensive Fire, Life, Health, Safety, Security and Environment
programme with related annual audits which helps ensure key elements of the
operations are maintained and inspected on a regular basis, business
continuity plans ('BCP's) are regularly reviewed and tested.
7. Maintain a robust cybersecurity environment. Perform regular
cybersecurity and data vulnerability assessments and testing to identify
weaknesses.
2 é Natural and man-made disaster and pandemic Environmental disasters such as earthquakes, floods and typhoons could damage
the Group's assets and disrupt operations. Climate change may lead to higher
insurance premiums or reduced coverage for natural disasters.
Man-made disasters such as hazardous material spills, explosions, chemical or
biological attacks, nuclear blasts, traffic collisions could cause deaths,
injuries, and loss of property.
COVID-19 has demonstrated the wide-ranging and long-lasting impacts and
disruptions for businesses, communities and employees that may result from the
spread of a pandemic. Significant disruptions and uncertainties would likely
result from global or regional pandemics of a similar nature if they raise the
prospect of lockdowns, restrictions on cross-border mobility, interruptions to
supply chains, and dampened consumer sentiment.
There is potential for negative publicity and operational disruption arising
from conflict between activists and the Group's businesses that are perceived
to be engaged in trade or activities that impact the environment.
Mitigations
1. Conduct climate risk assessments and adaptation action plans based on
recommendations of Task Force on Climate-Related Financial Disclosures.
2. Ensure comprehensive BCPs are fully developed and periodically updated at
the Group level and in each location where the Group operates.
3. Seek geographic diversity of hotels which would mitigate the impact of
such incidents on the Group's overall financial performance.
4. Maintain cost containment procedures enabling the hotels to reduce or
even suspend operations if necessary to reduce costs.
5. Maintain protocols to ensure the safety of colleagues and guests, such as
temperature monitoring, the issuing of personal protective equipment,
sanitisation standards, and cleaning regimes.
6. Procure insurance covering property damage and business interruption due
to natural and man-made disaster.
3 Partnerships and investments The Group has an accelerated development strategy to scale the Management
Business. The Group may fail to achieve targeted revenue growth due to
(Clarified) inability to acquire new management contracts, or access targeted markets. The
Group may fail to create value as planned due to delays in new hotel openings.
If the Group is unable to develop and maintain good relationships with
third-party owners and/or if agreements with owners are terminated, revenues
could decrease. If owners are not able to maintain brand standards, our
business and reputation could be harmed.
Mitigations
1. Launch a multi-property ownership strategy and conduct sufficient
research, due diligence and evaluation of investment opportunities and
potential business partners.
2. Deploy resources to ensure efficient portfolio management. Develop clear
frameworks and governance structure to track and manage project status.
3. Maintain framework to ensure owners maintain properties to brand
standards.
4 é Political and Political risk
economic risk Changes and uncertainties in the political landscape pose risks for business
activity and sentiment in the territories where the Group operates and
consequently for the current investments and future growth of the Group.
Rising costs of fuel and staple foods may heighten the risk of civil
discontent and political instability. The imposition of export bans by some
governments on food and raw materials may add further uncertainties in the
availability and cost of necessary supplies.
Economic risk
The Group's business is exposed to the risk of adverse developments in global
and regional economies and financial markets. These developments could include
recession, inflation, deflation, currency fluctuations, restrictions in the
availability of credit, business failures, or increases in financing costs,
oil prices or the cost of raw materials. Such developments might increase
operating costs, reduce revenues, lower asset values or result in some or all
of the Group's hotels and residences being unable to meet their strategic
objectives.
Mitigations
1. Maintain the Group's financial strength and funding sources under
scenarios of economic downturn and other stresses.
2. Monitor the macroeconomic environment and consider economic factors in
strategic and financial planning processes.
3. Procure insurance covering business interruption due to civil unrest and
terrorism.
5 é IT and The Group's businesses are reliant on technology in their operations and face
security threats targeting both individuals and businesses. As a result, the
cybersecurity privacy and security of customer and corporate information are at risk of
being compromised through a breach of our suppliers' IT systems or the
unauthorised or inadvertent release of information, which may result in brand
damage, impaired customer trust, loss of competitiveness or regulatory action.
Security breaches stemming from inadequate cybersecurity or lack of employee
cybersecurity awareness may also adversely affect the Group's ability to
manage daily business operations, resulting in business interruption,
reputational damage, regulatory penalties, lost revenues, repair or other
costs.
Mitigations
1. Define cybersecurity programme to provide oversight, promote
cybersecurity hygiene, strengthen cybersecurity defences and manage
cybersecurity incidents.
2. Perform regular vulnerability assessment and penetration testing to
identify weaknesses.
3. Maintain disaster recovery plans and backups for data restoration.
4. Arrange regular security awareness training at least annually and
phishing testing to raise users' cybersecurity awareness.
5. Conduct regular internal audits of IT general controls and cybersecurity.
6 é People and talent The competitiveness of the Group's businesses depends on the quality of the
people that it attracts and retains. The unavailability of needed human
resources may impact the ability of the Group's businesses to operate at
capacity, implement initiatives and pursue opportunities.
The Group needs to maintain critical capabilities required for expansion (by
function and by geographic markets), develop the right organisation design and
talent location, recruitment and management strategies. Capability gaps may
undermine the accelerated growth strategy. Inappropriate allocation of
resources may lead to inefficient scaling of the Management Business.
Mitigations
1. Support workforce practices that promote well-being and work arrangements
that are competitive with the market.
2. Ensure that organisational structure and resource allocation addresses
the capabilities needed to support strategic growth, and Management Business
scaling.
3. Ensure proactive manpower planning and succession planning are in place.
4. Enhance employer branding, training for staff members, compensation and
benefits, including retention incentives.
5. Enhance talent development plans to increase employees' visibility of
future career paths, including identifying strategic talent pools.
7 Customer's changing The Group is operating in a highly competitive market with both globally
scaled chains and boutique competitors. In addition to these traditional
(Clarified) behaviours and sector peers, home sharing services, short-term rental platforms and other
intermediaries intensify the competition. Online travel agents, luxury travel
market competition agent consortia and other key global sales accounts compete with our direct
channels of distribution, potentially diluting both profitability and our
customers' loyalty. If we cannot manage and balance our distribution channels,
we risk loss of net revenue and customer ownership.
Mitigations
1. Elevate Mandarin Oriental's brand and brand value through a clearly
defined Brand strategy to grow guests' awareness, purchase and retention.
2. Optimise channel mix and direct ownership of targeted customer segment.
3. Strengthen customer relationship management and digital commerce
capabilities.
8 ê Concentration risk Certain locations in Asia contribute a significant portion of the Group's
underlying profit. Adverse conditions such as social upheaval, erosion of the
rule of law or travel restrictions could reduce a location's competitiveness
and impact the Group's businesses with operations in and exposure to that
jurisdiction.
Mitigation
1. Seek geographical diversification of Management Business income.
9 (New) Third-party service provider and supply chain management Our hotels and residences rely on third-party service providers for the
provision of various services and goods required for our business.
Mis-selection or mis-management of vendors, disruption of the supply chain,
failure to satisfy our brand standards and safety requirements may cause
damage to brand, operations and results.
The Group is highly reliant on technology in business operations. Third-party
technical service providers deliver access to our systems. Unauthorised access
to/use of confidential or proprietary information, breach of sensitive data
and delay of service delivery may negatively affect our brand, operations and
results. Mis-selection of vendors may hinder introduction or development of
information technology needed to support efficient scaling of the Group.
Mitigations
1. Carefully evaluate and select vendors and third-party service providers,
including an information security assessment where appropriate.
2. Engage suppliers only if they agree to comply with our supplier's code of
conduct.
10 ê Financial strength and funding The Group's activities expose it to a variety of risks to its financial
strength and funding, including market risk, credit risk and liquidity risk.
The market risk the Group faces includes i) foreign exchange risk from future
commercial transactions, net investments in foreign operations and net
monetary assets and liabilities that are denominated in a currency that is not
the entity's functional currency; and ii) interest rate risk through the
impact of rate changes on interest bearing assets and liabilities.
The Group's credit risk may be primarily attributable to deposits with banks,
contractual cash flows of debt investments and credit exposures to customers.
The Group may face liquidity risk if its credit standing deteriorates or if it
is unable to meet its financing commitments.
Mitigations
1. Set clear policies and limits on market, credit, and liquidity risks,
including in relation to foreign exchange exposure, interest rate risks, cash
management and prohibition on derivatives not used in hedging.
2. Adopt appropriate credit guidelines to manage counterparty risk.
3. Fix a portion of borrowings in fixed rates and take borrowings in local
currency to hedge foreign exchange exposures on investments.
4. Maintain adequate headroom in committed facilities to facilitate the
Group's capacity to pursue new investment opportunities and to provide some
protection against market uncertainties.
5. Keep an appropriate funding balance between equity and debt from banks
and capital markets, both short- and long-term in tenor, to give flexibility
to develop the business.
6. The Group's treasury operations are managed as cost centres and are not
permitted to undertake speculative transactions unrelated to underlying
financial exposures.
Mandarin Oriental International Limited
Responsibility Statements
The Directors of the Company confirm that, to the best of their knowledge:
a) the consolidated financial statements prepared in accordance with
International Financial Reporting Standards, including International
Accounting Standards and Interpretations as issued by the International
Accounting Standards Board, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group; and
b) the Chairman's Statement, Group Chief Executive's Review, Financial
Review and the description of Principal Risks and Uncertainties facing the
Group as set out in the Company's 2024 Annual Report, which constitute the
management report required by the Disclosure Guidance and Transparency Rule
4.1.8, include a fair review of all information required to be disclosed under
Rules 4.1.8 to 4.1.11 of the Disclosure Guidance and Transparency Rules issued
by the Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
Laurent Kleitman
Matthew Bishop
Directors
Mandarin Oriental International Limited
Dividend Information for Shareholders
The final dividend of US¢3.50 per share will be payable on 14 May 2025,
subject to approval at the Annual General Meeting to be held on 2 May 2025, to
shareholders on the register of members at the close of business on 21 March
2025. The shares will be quoted ex-dividend on 20 March 2025, and the share
registers will be closed from 24 to 28 March 2025, inclusive.
Shareholders will receive cash dividends in United States Dollars, except
where elections are made for alternate currencies in the following
circumstances.
Shareholders on the Jersey branch register
Shareholders registered on the Jersey branch register can elect for their
dividends to be paid in Pounds Sterling. These shareholders may make new
currency elections for the 2024 final dividend by notifying the United Kingdom
transfer agent in writing by 25 April 2025. The Pounds Sterling equivalent of
dividends declared in United States Dollars will be calculated by reference to
an exchange rate prevailing on 30 April 2025.
Shareholders holding their shares through the CREST system in the United
Kingdom will receive cash dividends in Pounds Sterling only, as calculated
above.
Shareholders on the Singapore branch register who hold their shares through
The Central Depository (Pte) Limited ('CDP')
Shareholders who are enrolled in CDP's Direct Crediting Service ('DCS')
Those shareholders who are enrolled in CDP's DCS will receive their cash
dividends in Singapore Dollars, unless they opt out of CDP Currency Conversion
Service, through CDP, to receive United States Dollars.
Shareholders who are not enrolled in CDP's DCS
Those shareholders who are not enrolled in CDP's DCS 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 21 March 2025, must
submit the relevant documents to Boardroom Corporate & Advisory Services
Pte. Ltd., the Singapore branch registrar, by no later than 5.00 p.m. (local
time) on 20 March 2025.
Mandarin Oriental International Limited
About Mandarin Oriental Hotel Group
Mandarin Oriental Hotel Group is an international hotel investment and
management group, with a presence in sought-after destinations around the
world. Renowned for creating outstanding properties, each destination reflects
the Group's Asian heritage, local culture and unique design. Driven by a
passion for the exceptional, every day, everywhere, the Group's mission is to
craft time-enriching experiences that transform the ordinary into the
exceptional and guests to fans through its legendary service. The Group now
operates 41 hotels, 12 residences and 26 exceptional homes in 26 countries and
territories, with many more projects under development. Mandarin Oriental
regularly receives international recognition and awards for outstanding
service and quality management. The Group has equity interests in a number of
its properties and adjusted net assets worth approximately US$4.4 billion as
at 31 December 2024.
Mandarin Oriental continues to drive its reputation as an innovative leader in
luxury hospitality, seeking selective opportunities to expand the reach of the
brand, with the aim of maximising profitability and long-term shareholder
value.
The parent company, Mandarin Oriental International Limited, is incorporated
in Bermuda and has a primary listing in the equity shares (transition)
category of the London Stock Exchange, with secondary listings in Bermuda and
Singapore. The activities of the Group's hotels are managed from Hong Kong.
Mandarin Oriental is a member of the Jardine Matheson Group.
- end -
For further information, please contact:
Laurent Kleitman / Matthew Bishop (852) 2895 9288
Chris Orlikowski (44) 791 7280 210
William Brocklehurst (Brunswick Group Limited) (852) 5685 9881
Full text of the Preliminary Announcement of Results and the Preliminary
Financial Statements for the year ended 31 December 2024 can be accessed via
the Mandarin Oriental corporate website at 'https://mandarinoriental.com/en'.
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