REG - Mandarin OrientalJardine Matheson HdgJardine Strategic - Half Yearly Results - 6 Months Ended 30 June 2016 <Origin Href="QuoteRef">JARD.SI</Origin> <Origin Href="QuoteRef">JSH.SI</Origin> <Origin Href="QuoteRef">MOIL.SI</Origin> - Part 2
28/07/2016 10:15
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- 0.8
Cash flows from investing activities (174.2) (88.3) (124.4)
Financing activities
Issue of shares (note 10) - 315.8 314.0
Drawdown of borrowings 51.5 - -
Repayment of borrowings (0.8) (261.2) (261.5)
Dividends paid by the Company (note 11) (37.7) (50.2) (75.3)
Dividends paid to non-controlling interests (0.1) - -
Cash flows from financing activities 12.9 4.4 (22.8)
Net decrease in cash and cash equivalents (129.1) (37.7) (7.0)
Cash and cash equivalents at beginning of period 308.6 324.3 324.3
Effect of exchange rate changes 2.0 (5.3) (8.7)
Cash and cash equivalents at end of period 181.5 281.3 308.6
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.
The following amendments which are effective in the current accounting period and relevant to the Group's operations are
adopted in 2016:
Amendments to IFRS 11 Accounting for Acquisitions of Interests in JointOperations
Amendments to IAS 1 Disclosure Initiative: Presentation of FinancialStatements
Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods ofDepreciation and Amortization
Annual Improvements to IFRSs 2012 - 2014 Cycle
Amendments to IFRS 11 'Joint Arrangements' introduce new guidance on the accounting for the acquisition of an interest in a
joint operation that constitutes a business. Acquirers of such interests shall apply all of the principles on business
combinations accounting in IFRS 3 'Business Combinations', and other IFRSs, that do not conflict with the guidance in IFRS
11 and disclose the information that is required in those IFRSs in relation to business combinations.
Amendment to IAS 1 is part of the International Accounting Standards Board's initiatives to improve the effectiveness of
disclosure in financial reporting. Amendments to IAS 1 clarify that companies shall apply professional judgments in
determining what information to disclose and how to structure it in the financial statements. The amendments include
narrow-focus improvements in the guidance on materiality, disaggregation and subtotals, note structure, disclosure of
accounting policies and presentation of items of other comprehensive income arising from equity accounted investments.
Amendments to IAS 16 'Property, Plant and Equipment' and IAS 38 'Intangible Assets' clarify that the use of revenue-based
methods to calculate the depreciation or amortization of an asset is not appropriate because revenue generated by an
activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits
embodied in the asset. The amendments to IAS 38 further clarify that revenue is generally presumed to be an inappropriate
basis for measuring the consumption of the economic benefits embodied in an intangible asset. This presumption however,
can be rebutted in certain limited circumstances.
Annual Improvements to IFRSs 2012 - 2014 Cycle comprise a number of non-urgent but necessary amendments.
There have been no changes to the accounting policies described in the 2015 annual financial statements upon the adoption
of the above amendments to existing standards. The adoption of these amendments do not have any significant impact on the
results or financial position of the Group.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
2. REVENUE
Six months ended 30th June
2016US$m 2015US$m
By geographical area:
Hong Kong 109.3 114.7
Other Asia 51.8 48.3
Europe 87.3 97.6
The Americas 39.8 34.6
288.2 295.2
3. EBITDA FROM SUBSIDIARIES (EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTIZATION)
Six months ended 30th June
2016US$m 2015US$m
By geographical area:
Hong Kong 33.4 35.0
Other Asia 13.4 13.1
Europe 8.1 15.2
The Americas 2.6 6.0
Underlying EBITDA from subsidiaries 57.5 69.3
Non-trading items
- acquisition-related costs (note 7) (1.8) (0.5)
EBITDA from subsidiaries 55.7 68.8
Less depreciation and amortization (27.2) (26.2)
Operating profit 28.5 42.6
4. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
EBITDAUS$m DepreciationandamortizationUS$m OperatingprofitUS$m NetfinancingchargesUS$m TaxUS$m Net profit/(loss)US$m
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
Non-trading items
- acquisition-related costs (note 7) - - - - - -
13.3 (5.5) 7.8 (1.8) (1.0) 5.0
Six months ended 30th June 2015
By geographical area:
Other Asia 10.4 (3.8) 6.6 (0.7) (1.3) 4.6
Europe 0.4 - 0.4 - (0.1) 0.3
The Americas 2.1 (1.3) 0.8 (1.0) - (0.2)
12.9 (5.1) 7.8 (1.7) (1.4) 4.7
Non-trading items
- acquisition-related costs (note 7) (0.5) - (0.5) - - (0.5)
12.4 (5.1) 7.3 (1.7) (1.4) 4.2
5. TAX
Six months ended 30th June
2016US$m 2015US$m
Tax (charged)/credited to profit and loss is analyzed as follows:
Current tax (6.8) (7.4)
Deferred tax 1.2 0.2
(5.6) (7.2)
By geographical area:
Hong Kong (3.9) (4.2)
Other Asia (0.2) (0.5)
Europe (1.1) (2.6)
The Americas (0.4) 0.1
(5.6) (7.2)
Tax relating to components of other comprehensive income or expense is analyzed as follows:
Cash flow hedges - 0.1
Tax on profits has been calculated at rates of taxation prevailing in the territories in which the Group operates.
Share of tax charge of associates and joint ventures of US$1.0 million (2015: US$1.4 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$22.9 million (2015: US$32.4
million) and on the weighted average number of 1,255.9 million (2015: 1,142.4 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders of US$22.9 million (2015: US$32.4 million)
and on the weighted average number of 1,261.2 million (2015: 1,147.8 million) shares after adjusting for the number of
shares which are deemed to be issued for no consideration under the share-based long-term incentive plans based on the
average share price during the period.
The weighted average number of shares is arrived at as follows:
Ordinary shares in millions
2016 2015
Weighted average number of shares for basic earnings per share calculation 1,255.9 1,142.4
Adjustment for shares deemed to be issued for no consideration under the share-based long-term incentive plans 5.3 5.4
Weighted average number of shares for diluted earnings per share calculation 1,261.2 1,147.8
Additional basic and diluted earnings per share are also calculated based on underlying profit attributable to
shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2016 2015
US$m Basicearningsper shareUS¢ Dilutedearningsper shareUS¢ US$m Basicearningsper shareUS¢ Dilutedearningsper shareUS¢
Profit attributable to shareholders 22.9 1.82 1.82 32.4 2.84 2.82
Non-trading items (note 7) 1.8 1.0
Underlying profit attributable to shareholders 24.7 1.97 1.96 33.4 2.92 2.91
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding of the Group's underlying business
performance. Items classified as non-trading items include gains and losses from the sale of businesses, investments and
properties; impairment of non-depreciable intangible assets and other investments; provisions for the closure of
businesses; acquisition-related costs in business combinations; provisions against asset impairment and writebacks; and
other credits and charges of a non-recurring nature that require inclusion in order to provide additional insight into
underlying business performance.
An analysis of non-trading items after interest, tax and non-controlling interests is set out below:
Six months ended 30th June
2016US$m 2015US$m
Acquisition-related costs
- administration expenses 1.8 0.5
- share of results of associates and joint ventures - 0.5
1.8 1.0
8. ACQUISITION OF MANDARIN ORIENTAL, BOSTON
On 27th April 2016, the Group completed its US$140 million acquisition of Mandarin Oriental, Boston, a hotel that the Group
has managed since its opening in 2008. The consideration of US$140 million represented the fair values of the tangible
assets acquired at the acquisition date. There was no goodwill arising on acquisition.
9. ACQUISITION OF HOTEL RITZ, MADRID
In May 2015, the Group acquired a 50% interest in the Hotel Ritz, Madrid for E65 million (US$73.3 million) in a joint
venture with The Olayan Group, with Mandarin Oriental managing the hotel under a long-term management agreement. The hotel
is to undergo a comprehensive renovation in 2017, currently estimated to cost a total of some E90 million, of which the
Group's share will be E45 million (US$50 million).
10. ISSUE OF SHARES
In April 2015, the Group completed a 1 for 4 rights issue with 250.9 million new ordinary shares issued, raising US$316.2
million of gross proceeds. The proceeds of the issue were used to pay down debt in advance of the proposed refurbishment
of Mandarin Oriental Hyde Park, London and to fund the Group's acquisition of a 50% interest in the Hotel Ritz, Madrid.
The Group paid expenses of US$1.7 million and US$1.9 million (US$3.6 million expenses in aggregate) in connection with the
rights issue in the first half and the second half of 2015, respectively.
The Group issued 1.0 million and 0.3 million new ordinary shares under the share-based long-term incentive plans with
proceeds of US$1.3 million and US$0.1 million (US$1.4 million proceeds in aggregate) in the first half and the second half
of 2015, respectively.
11. DIVIDENDS
Six months ended 30th June
2016US$m 2015US$m
Final dividend in respect of 2015 of US¢3.00
(2014: US¢5.00) per share 37.7 50.2
An interim dividend in respect of 2016 of US¢1.50 (2015: US¢2.00) per share amounting to a total of US$18.8 million (2015:
US$25.1 million) has been declared by the Board and will be accounted for as an appropriation of revenue reserves in the
year ending 31st December 2016.
12. CAPITAL COMMITMENTS
Total capital commitments at 30th June 2016 and 31st December 2015 amounted to US$341.1 million and US$321.4 million,
respectively.
13. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at 30th June 2016
and 31st December 2015 are as follows:
Loans and receivablesUS$m Derivatives used for hedgingUS$m Available-for-saleUS$m Other financial instruments at amortized costUS$m Total carrying amountUS$m Fair valueUS$m
30th June 2016
Assets
Other investments - - 11.1 - 11.1 11.1
Debtors 64.4 - - - 64.4 64.4
Bank and cash balances 181.7 - - - 181.7 181.7
246.1 - 11.1 - 257.2 257.2
Liabilities
Other non-current liabilities - (1.7) - - (1.7) (1.7)
Borrowings - - - (485.3) (485.3) (485.3)
Trade and other payables excluding non-financial liabilities - (1.2) - (117.9) (119.1) (119.1)
- (2.9) - (603.2) (606.1) (606.1)
Loans and receivablesUS$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 2015
Assets
Other investments - - 10.2 - 10.2 10.2
Debtors 61.2 - - - 61.2 61.2
Bank and cash balances 308.6 - - - 308.6 308.6
369.8 - 10.2 - 380.0 380.0
Liabilities
Other non-current liabilities - (3.0) - - (3.0) (3.0)
Borrowings - - - (440.4) (440.4) (440.3)
Trade and other payables excluding non-financial liabilities - - - (133.5) (133.5) (133.5)
- (3.0) - (573.9) (576.9) (576.8)
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) Quoted prices (unadjusted) in active markets for identical assets or liabilities ('quoted prices in active markets')
The fair value of listed securities, which are classified as available-for-sale, is based on quoted prices in active
markets at the balance sheet date. The quoted market price used for listed investments held by the Group is the current
bid price.
(b) 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.
(c) Inputs for assets or liabilities that are not based on observable market data ('unobservable inputs')
The fair value of other unlisted securities, which are classified as available-for-sale, is 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 2016 and the year ended 31st December
2015.
The table below analyzes financial instruments carried at fair value at 30th June 2016 and 31st December 2015, by the
levels in the fair value measurement hierarchy:
Quoted prices in active marketsUS$m Observable current market transactionsUS$m Unobservableinputs US$m Total US$m
30th June 2016
Assets
Available-for-sale financial assets
- unlisted investments - 2.1 9.0 11.1
Liabilities
Derivative designated at fair value
- through other comprehensive income - (2.9) - (2.9)
31st December 2015
Assets
Available-for-sale financial assets
- unlisted investments - 2.1 8.1 10.2
Liabilities
Derivative designated at fair value
- through other comprehensive income - (3.0) - (3.0)
There were no transfers among the three categories during the six months ended 30th June 2016 and the year ended 31st
December 2015.
Movement of financial instruments which are valued based on unobservable inputs during the six months ended 30th June 2016
and the year ended 31st December 2015 are as follows:
Available-for-sale financial assetsUS$m
At 1st January 2016 8.1
Additions 0.9
At 30th June 2016 9.0
At 1st January 2015 7.6
Additions 0.5
At 31st December 2015 8.1
(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.
14. 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$6.5 million (2015: US$6.4 million) received
from the Group's six (2015: 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:
· Economic and Financial Risk
· Commercial and Market Risk
· Pandemic, Terrorism and Natural Disasters
· Key Agreements
· Intellectual Property and Value of the Brand
· Regulatory and Political Risk
For greater detail, please refer to pages 97 and 98 of the Company's Annual Report for 2015, 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
Rules 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 12th October 2016 to shareholders on the register of members at the close of business on 19th August 2016.
The shares will be quoted ex-dividend on the Singapore Exchange and the London Stock Exchange on 17th and 18th August 2016, respectively. The share registers will be
closed from 22nd to 26th August 2016, 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 2016 interim dividend by notifying the United
Kingdom transfer agent in writing by 23rd September 2016. The sterling equivalent of dividends declared in United States dollars will be calculated by reference to a
rate prevailing on 28th September 2016. 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 19th August 2016, 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 18th August 2016.
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 29 hotels and eight residences in 19 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, with the next hotel opening planned in Doha. The Group has equity interests in a number of its
properties and adjusted net assets worth approximately US$3.6 billion as at 30th June 2016.
Mandarin Oriental's aim is to be recognized widely as the best global luxury hotel group, providing 21st century luxury
with oriental charm in each of its hotels. 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 as its primary listing, 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
Susan Ho (852) 3512 5069
As permitted by the Disclosure Rules 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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