Announcement
7th March
2024
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
2023 PRELIMINARY ANNOUNCEMENT OF RESULTS
HIGHLIGHTS
·
Underlying profit increased to US$81 million,
from US$8 million in 2022
·
Strong operating and financial performance driven
by record rates
·
Management fees grew by 30%, with strong recovery
by hotels in Asia
·
Increased development pipeline with two new hotel
openings and eight new management contracts announced
·
Final dividend at US¢3.50 per share, resulting in
total dividends of US¢5.00 per share
"Mandarin Oriental delivered a
strong recovery in 2023. The Group
faces some geopolitical and macroeconomic uncertainties
entering 2024, but with the appointment of
Laurent Kleitman as Group Chief Executive, we are optimistic about
the Group's long-term strategy."
Ben Keswick
Chairman
RESULTS
|
Year
ended 31st December
|
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
|
US$m
|
|
US$m
|
|
%
|
|
Combined total revenue of hotels
under management(1)
|
1,890.2
|
|
1,568.1
|
|
+21
|
|
Revenue
|
558.1
|
|
454.1
|
|
+23
|
|
Underlying EBITDA (Earnings before
interest, tax, depreciation and
amortisation)(2)
|
177.6
|
|
111.4
|
|
+59
|
|
Underlying profit attributable to
shareholders(3)
|
81.0
|
|
7.6
|
|
+966
|
|
Revaluation loss on investment
properties
|
(486.7)
|
|
(104.1)
|
|
-368
|
|
Gain on sale of a subsidiary/asset
disposals
|
41.3
|
|
47.0
|
|
-12
|
|
Loss attributable to
shareholders
|
(365.4)
|
|
(49.5)
|
|
-638
|
|
|
US¢
|
|
US¢
|
|
%
|
|
Underlying earnings per
share(3)
|
6.41
|
|
0.60
|
|
+968
|
|
Loss per share
|
(28.91)
|
|
(3.92)
|
|
-638
|
|
Dividends per share
|
5.00
|
|
-
|
|
n/a
|
|
|
US$
|
|
US$
|
|
%
|
|
Net asset value per
share
|
2.34
|
|
2.61
|
|
-10
|
|
Adjusted net asset value per
share(4)
|
3.67
|
|
3.87
|
|
-5
|
|
Net debt/shareholders'
funds
|
8%
|
|
11%
|
|
|
|
Net debt/adjusted shareholders'
funds(4)
|
5%
|
|
8%
|
|
|
|
(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 31st December
2023. 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 31st December 2023 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 15th May 2024, subject to approval at the
Annual General Meeting to be held on 8th May 2024, to shareholders
on the register of members at the close of business on 22nd March
2024.
MANDARIN ORIENTAL INTERNATIONAL LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 2023
OVERVIEW
2023 was a year of significant
growth and progress for Mandarin Oriental. The Group grew its
Management Business, with two new openings and the announcements of eight new
hotel and residences projects. Our colleagues continued to
provide the exceptional service for which the brand is legendary
and secured record room rates, which translated into strong
operating and financial performance.
2023 Financial Performance
Underlying profit increased to
US$81 million, from US$8 million in 2022, with underlying earnings
per share at US¢6.41, compared with US¢0.60 in 2022.
Non-trading losses of US$446 million primarily comprised a
non-cash revaluation of the Causeway Bay site under development,
resulting in a loss attributable to shareholders of US$365
million.
Net debt fell to US$225 million at
the end of 2023, from US$376 million at the end of 2022, reflecting
significantly higher operating cashflow from the business, net of
ongoing capital investment, as well as proceeds from disposals.
Gearing as a percentage of adjusted shareholders' funds was
5%, compared to 8% at the end of 2022.
The Directors recommend a final
dividend of US¢3.50 per share. This, together with the
interim dividend of US¢1.50 per share declared, will result in
total dividends of US¢5.00 per share.
Year in review
In 2023, Mandarin Oriental, with
its distinctive portfolio of hotels, was able to satisfy consumers'
continuing robust appetite for luxury leisure travel. The
Group's legendary levels of service underpinned an increase in
rates, and it continued to build occupancy, which translated into
substantial improvements in Revenue Per Available Room ('RevPAR')
across almost all hotels.
Hotels in Asia benefitted from the
return of travel demand from the Chinese mainland following the
removal of restrictions at the beginning of 2023, generating
substantially higher management fees. Two of the Group's key
owned hotels in the region - Hong Kong and Tokyo - delivered
notably better performance than in 2022. In Europe, the
Middle East and Africa ('EMEA'), hotels reported solid growth over
2022 and gained market share, particularly in resort destinations.
In America, RevPAR performance remained broadly stable, with
easing domestic leisure demand partially offset by higher demand
from corporate and group travellers.
Sustainability
We believe the long-term success
of our business hinges on doing the right things for our planet and
our people. The Group remains on track to achieve its 2030
environmental targets and has made particular progress in reducing
energy and waste intensity, and in expanding the scope of its
responsible procurement. Mandarin Oriental's sustainability
commitments also undertake to create positive impacts for the
communities in which its hotels operate. This year, the
'MOgiving' initiative was
launched in all the Group's hotels, to empower colleagues to
contribute to their local communities.
GOVERNANCE
The Group has continued to evolve
its governance in 2023, to ensure that its board and committees
have the right expertise and independence to support the delivery
of the Group's strategic priorities. In 2023, Richard
Solomons was appointed as Independent Non-Executive Chair of the
Audit Committee and Jinqing Cai, an Independent Non-Executive
Director, was appointed as a member of the Committee. The
Audit Committee now has a majority of independent members, whose
expertise and understanding of the luxury and hospitality sectors
will strengthen the Committee.
PEOPLE
In September 2023, Laurent
Kleitman succeeded James Riley as Group Chief Executive. On
behalf of the Board, I would like to thank James for his
contribution to the Group and welcome Laurent, who has joined us
with many years of experience in building iconic, luxury consumer
brands.
Our colleagues play an
instrumental role in defining the brand and creating the legendary
guest experience for which Mandarin Oriental is renowned. I
would like to take this opportunity to express my gratitude to them
for the unwavering commitment they show to our guests, which
underpins the long-term success of the Group.
OUTLOOK
Mandarin Oriental delivered a
strong set of results in 2023. Despite some geopolitical and
macroeconomic uncertainties entering 2024,
the Group remains optimistic about its future growth as it
continues to invest in its core strengths of brand desirability, a
strong management contract pipeline, continued delivery of
innovation and service excellence and an unwavering commitment to
people and the environment.
Ben Keswick
Chairman
Group Chief Executive's RevieW
I am delighted to have joined
Mandarin Oriental and am pleased to share my initial views of the
Group and the progress we have made across several fronts over the
past year.
Having been with the Group for a
few months and visited most of our properties around the world, met
with many of our owners and partners, and spent time listening to
and learning from our thousands of colleagues, it is clear to me
that Mandarin Oriental is not only a strong business today but also
has significant opportunities ahead.
Since my appointment in September
2023, my team and I have been reviewing our strategy to ensure that
the Group is able to build on the right foundations to accelerate
growth. Strategic thinking and changes are currently
underway, with a greater focus on significantly scaling up the
Management Business globally, further elevating the brand's
desirability, to become the reference point in luxury hospitality,
and enriching our proposition to guests and owners. I am very
convinced that the Mandarin Oriental brand, together with the
exceptional operational expertise of our teams centrally and around
the world, has the potential to take a larger share of the global
luxury hospitality market in the coming years. Our
understanding of excellence, our long-standing service tradition,
our interpretation of luxury and our creativity are some of the
many assets that we are building upon.
Our dual Asian origin, blending
the vibrancy and modernity of Hong Kong - The Mandarin - with the
refinement of Bangkok - The Oriental -, makes us the most
distinctive and authentic luxury hospitality brand in the world.
And today, 50 years after these two iconic hotels were
brought together, we have created a formidable Group: from the
strength of our growing Management Business to the enormous
potential of our brand, from the quality of our operators and
15,000 colleagues to the strength of our partners, Mandarin
Oriental has solid foundations from which we will scale up, while
retaining our unique sense of high-end luxury.
I look forward to sharing our full
new strategic plan in more detail later this year.
Looking back to 2023, we had
occasion to celebrate many significant achievements, starting in
February with the rebranding of Emirates Palace Mandarin Oriental,
Abu Dhabi. This is our third hotel in the Middle East and
complements Mandarin Oriental Jumeira, Dubai and Mandarin Oriental,
Doha, reinforcing our brand presence in the region.
Reflecting our unwavering dedication to elevating the guest
experience, Mandarin Oriental, Singapore re-opened its doors to
guests in September after a transformative renovation. In
October, we celebrated the 60th anniversary of one of our historic
hotels, Mandarin Oriental, Hong Kong, with Oscar-winning brand
ambassador Michelle Yeoh and other distinguished guests showcasing
the contemporary luxury and Oriental heritage that differentiate
the brand. And finally, as we concluded 2023, we opened the
magnificent and iconic Mandarin Oriental Savoy, Zurich after an
extensive renovation.
2023 Performance
Summary of
Performance
The Group manages 38 hotels and
nine residences globally, of which 25 properties are managed and 13
properties are owned or partially owned. In 2023, the
Management Business delivered strong operating performance and
improved profitability. Combined total revenue for hotels
under management was US$1.9 billion in 2023, 21% above 2022.
This increase was driven primarily by a 29% increase in
RevPAR. The improvement in RevPAR was primarily due to a
gradual recovery in occupancy across all geographies, a
continuation of high rates in Europe, the Middle East and Africa
('EMEA'), and a solid rebound in rates in Asia. Food &
Beverage ('F&B') revenue also increased by 18% year-on-year,
contributing to the strong top-line outperformance in
2023.
In EMEA, most hotels gained market
share in 2023 compared to 2022. Average RevPAR was US$645, up
14% from 2022. While average rates remained fairly stable in
2023 compared to the prior year, occupancy recovered to
pre-pandemic levels. RevPAR performance was notably better
than 2022 in Bodrum, Abu Dhabi and Marrakech, predominantly driven
by robust leisure demand.
In Asia, RevPAR was US$213, up 75%
from 2022. The progressive return of domestic and some
outbound travel demand from Chinese mainland at the start of the
year contributed to a strong pick-up in both occupancy and rates
within the region. Within Chinese mainland, our hotels in
Beijing, Hong Kong, Macau, Shanghai and Shenzhen generated strong
year-on-year improvements in RevPAR. In the rest of Asia,
Tokyo, Bangkok and Kuala Lumpur also delivered considerable RevPAR
improvements. Despite substantial RevPAR growth in 2023
compared to 2022, RevPAR for the region remained slightly below
pre-pandemic levels as occupancy continued to recover.
In the Americas, RevPAR was
US$408, up 3% from 2022. Domestic leisure demand eased
marginally from the strong levels seen in 2022 but was compensated
by a steady continuing recovery in the corporate transient and
group segments.
Management
Business
With the openings of two new
hotels, the Group continued to execute its strategy of scaling up
the Management Business. This growth in scale, combined with
RevPAR improvement, resulted in a 30% increase in hotel management
fees and a 55% improvement in EBITDA for the Management Business
compared to 2022. Most hotels delivered higher fees, with
hotels in Asia in particular seeing a robust rebound from
2022.
The sale of branded residences,
such as The Residences at
Mandarin Oriental, Mayfair - luxury apartments situated in
the heart of one of London's most stylish neighbourhoods - and
Mandarin Oriental Residences,
Fifth Avenue in the heart of Manhattan, remains a strategic
focus and contributed some 10% of the total fees earned from the
Management Business.
Owned Hotel
Performance
Our 13 owned properties reported a
combined EBITDA 63% higher than in 2022, and most properties
maintained or improved their earnings. Of note were the
materially improved contributions produced by Hong Kong and Tokyo,
both of which were severely impacted by stringent travel
restrictions for the majority of 2022, and the early part of 2023.
London and Geneva also delivered considerably improved
results driven by better RevPAR and F&B performance. The
exceptions with lower earnings in 2023 were Singapore and Miami.
After undergoing an extensive renovation for six months,
Mandarin Oriental, Singapore has re-opened with a transformed and
elevated guest experience with an enhanced appeal to leisure
travellers. Against the backdrop of easing domestic leisure
demand in America, Miami reported a slight drop in average rates,
partially offset by improved occupancy and F&B
performance.
Financial
Performance
As a result of strong top-line
performance, EBITDA for 2023 was US$178 million, a 59% increase
from the prior year. Underlying profit substantially improved from
US$8 million in 2022 to US$81 million in 2023.
A
Year IN REVIEW
The Group's long-term growth
strategy is to grow Mandarin Oriental brand's desirability and
expand the Management Business through the signing of management
contracts in key destinations, whilst retaining some ownership of
brand-defining properties.
Management
Business
The Group's Management Business
made good progress in 2023. In August, we introduced Mandarin
Oriental's contemporary luxury to Greece with the opening of our
beachfront getaway in Costa Navarino. In December, we opened
our third property in Switzerland - Mandarin Oriental Savoy,
Zurich, following an extensive renovation of this historic
property, which dates back to 1838.
In addition to these openings, we
underpinned the future growth of our portfolio with the signing of
eight hotel and residences projects, all of which will be managed
by the Group:
·
Luxury residences in the heart of Madrid's most
exclusive neighbourhood, Salamanca;
·
A scenic beachfront resort in
Mallorca;
·
A hotel and residences in Athens with
contemporary design and unobstructed views of the Aegean
Sea;
·
A hotel and residences in Bankside - the Group's
third property in London;
·
A transformative redevelopment of Mandarin
Oriental, Miami, in a larger hotel and residences complex in the
unique Brickell Island location;
·
A secluded resort in Porto Cervo, Sardinia,
overlooking the Gulf of Pevero;
·
A high-end boutique resort in Setouchi, Japan
that consists of three distinctive properties around the Seto
Inland Sea; and
·
A full renovation and rebranding of the historic
Gellért Hotel in Budapest.
Overall, at the end of 2023, the
Group has a pipeline of 28 hotels (14 of which have a residences
component) and two standalone residences to open over the next five
years. And I remain very optimistic about announcing new
strategic projects in 2024.
Owned
Assets
As part of our regular review of
the Group's assets, in 2023, we decided to sell our owned
properties in Jakarta and Paris. The disposal of our Jakarta
property was completed in June 2023, with the hotel management
contract retained. The Group has also signed an option to
sell the Paris hotel property, securing a long-term hotel
management contract with the new owner. We expect to complete
this transaction in the first half of 2024.
We are making good progress with
the redevelopment of our Causeway Bay site in Hong Kong and have
begun leasing activities in line with our expectation to complete
construction of the building in the first half of 2025. We
have updated our valuation for the project to purely reflect
residual, value-in-use estimates, in line with normal market
practice as the development project progresses toward
completion.
Brand
In 2023, we continued to
strengthen the desirability of the Mandarin Oriental brand.
The Group focussed on increasing the awareness of the brand
amongst our target audience, and investing behind our award-winning
'I'm A Fan' advertising
campaign, which has featured over 50 celebrities who are genuine
fans of Mandarin Oriental. We also celebrated a key milestone
for Mandarin Oriental, with the 60th anniversary of our flagship
hotel in Hong Kong, which has been at the forefront of luxury
hospitality since it opened its doors in 1963.
During the period, we have built
awareness and engagement of Mandarin Oriental through extensive
media coverage in both lifestyle publications and social channels,
focussing on the Group's core brand pillars of craftsmanship and
design; innovative dining; holistic wellness; and our legendary
service which are at the heart of our Oriental heritage.
These focusses have been further strengthened by the
attainment of many global awards for excellence, solidifying the
Group's reputation for delivering the highest quality.
Significant awards in 2023 included Best Luxury Hotel Brand
in the annual Luxury Travel
Intelligence ranking; 29 Michelin stars won by 18 of our global
restaurants; the World's Best Hotel Spa Brand by the World Spa
Awards, and the placement of 20 of our properties in Condé Nast
Traveller Readers' Choice Awards, more than in any previous
year.
Further, we have forged
partnerships with prestigious like-minded brands. These
included the hosting of Louis Vuitton's summer pop-up store and
co-branded beach bar at Mandarin Oriental, Bodrum, and the
development of a dedicated showcase suite for Vacheron Constantin
in Dubai.
Transformation
Modernisation of the Management
Business remains a strategic focus, with the key aims of supporting
growth in scale, enriching the customer experience, delivering
improved operating efficiency, and elevating our colleagues value
proposition.
In the past year, we continued to
advance several transformation initiatives across the organisation
in support of this strategic objective. In particular, the
Group has embarked on the Guest Experience Programme which will
greatly improve our ability to recognise, understand and engage our
guests across Mandarin Oriental. A redesign of Fans of M.O. will enable us better to
attract and retain both top guests and local fans. We are
establishing a bespoke relationship management service to build
brand-level loyalty with ultra-high-net-worth guests.
Internally, we have made encouraging progress in driving
operational efficiency through modernising our systems and
processes required to support evolving business needs.
People &
Culture
The Group's focus on recruiting
and developing the right talent, as well as providing an engaging
colleague experience, remains central to our People and Culture
strategy. In the past year, the Group has recruited 176
Rising Fans into the new graduate programme. More broadly, we
achieved notable improvements in retention, with a reduction in
voluntary turnover from 25% to 22%. Our efforts were
acknowledged in the Group's latest Colleague Engagement Survey,
which indicated improvement across all drivers of sustainable
engagement and exceeded both the 'Travel & Leisure' norm and
the 'High-Performance' norm.
Our HR transformation journey, The
People Project, is a strategic initiative that aims to put the
colleague experience at the centre, elevate the role of our people
managers, and simplify, harmonise and automate our HR processes.
The initiative is a major step towards enabling an engaged
workforce through a compelling work experience, laying a solid
foundation for the organisation to build on as it scales
up.
Sustainability
I am delighted to share that the
Group's commitment to sustainability was recognised in 2023 by the
Global Sustainable Tourism Council. In line with our belief
in contributing positively to local communities, we launched
'MOgiving' within all our
hotel properties, to empower our colleagues to create positive
social impact locally. We continue to make progress against
our other sustainability targets, about which further information
will be published in our forthcoming Sustainability Report
2023.
The year ahead
In 2023, Mandarin Oriental
delivered improved operational performance and continued to lay the
foundation for strong future growth. In early 2024, we
completed the rebranding of Mandarin Oriental Al Faisaliah, Riyadh,
and in the coming 12 months we are focussed on delivering several
planned openings, including Muscat in Oman
- a unique beachfront urban resort, Mayfair in London - an
exclusive boutique hotel in the heart of the capital's fashion and
shopping district, Qianmen in Beijing - an elegant hotel that
offers an authentic experience within a traditional Hutong quarter,
and a standalone residences project on Fifth Avenue in New York.
I am confident that we will be in a position to announce
several further strategic projects in key locations in the course
of 2024, which will enable the brand to expand its footprint in
highly sought-after destinations and continue to improve the
financial performance of the Group.
As we continue to grow, we will
remain attentive to cultivating and raising the desirability of the
Mandarin Oriental brand and maintaining and uplifting the quality
of Mandarin Oriental guest experiences at every
opportunity.
Laurent Kleitman
Group Chief Executive
|
|
|
Mandarin Oriental International Limited
Consolidated Profit and Loss Account
for the year ended 31st December 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
2022
|
|
|
Underlying
business
performance
US$m
|
|
Non-trading
Items
US$m
|
|
|
|
Total
US$m
|
|
Underlying
business
performance
US$m
|
|
Non-trading
Items
US$m
|
|
|
|
Total
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (note 2)
|
|
558.1
|
|
|
|
-
|
|
|
|
558.1
|
|
|
|
454.1
|
|
|
|
-
|
|
|
|
454.1
|
|
|
Cost of sales
|
|
(308.7)
|
|
|
|
-
|
|
|
|
(308.7)
|
|
|
|
(302.7)
|
|
|
|
-
|
|
|
|
(302.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
249.4
|
|
|
|
-
|
|
|
|
249.4
|
|
|
|
151.4
|
|
|
|
-
|
|
|
|
151.4
|
|
|
Selling and distribution
costs
|
|
(35.6)
|
|
|
|
-
|
|
|
|
(35.6)
|
|
|
|
(27.0)
|
|
|
|
-
|
|
|
|
(27.0)
|
|
|
Administration expenses
|
|
(116.7)
|
|
|
|
-
|
|
|
|
(116.7)
|
|
|
|
(109.2)
|
|
|
|
-
|
|
|
|
(109.2)
|
|
|
Other operating
income/(expense)
|
|
5.2
|
|
|
|
(0.4)
|
|
|
|
4.8
|
|
|
|
5.7
|
|
|
|
-
|
|
|
|
5.7
|
|
|
Change in fair value of investment
properties
|
|
-
|
|
|
|
(486.7)
|
|
|
|
(486.7)
|
|
|
|
-
|
|
|
|
(104.1)
|
|
|
|
(104.1)
|
|
|
Gain on sale of a subsidiary/asset
disposals (notes 16 &
14)
|
|
-
|
|
|
|
43.8
|
|
|
|
43.8
|
|
|
|
-
|
|
|
|
40.6
|
|
|
|
40.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)/profit
(note 3)
|
|
102.3
|
|
|
|
(443.3)
|
|
|
|
(341.0)
|
|
|
|
20.9
|
|
|
|
(63.5)
|
|
|
|
(42.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing charges
|
|
(17.6)
|
|
|
|
-
|
|
|
|
(17.6)
|
|
|
|
(16.7)
|
|
|
|
-
|
|
|
|
(16.7)
|
|
|
Interest income
|
|
7.7
|
|
|
|
-
|
|
|
|
7.7
|
|
|
|
2.3
|
|
|
|
-
|
|
|
|
2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financing charges
|
|
(9.9)
|
|
|
|
-
|
|
|
|
(9.9)
|
|
|
|
(14.4)
|
|
|
|
-
|
|
|
|
(14.4)
|
|
|
Share of results of associates and
joint ventures (note
4)
|
|
(0.3)
|
|
|
|
(0.6)
|
|
|
|
(0.9)
|
|
|
|
9.7
|
|
|
|
-
|
|
|
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit before
tax
|
|
92.1
|
|
|
|
(443.9)
|
|
|
|
(351.8)
|
|
|
|
16.2
|
|
|
|
(63.5)
|
|
|
|
(47.3)
|
|
|
Tax (note 5)
|
|
(11.0)
|
|
|
|
(2.5)
|
|
|
|
(13.5)
|
|
|
|
(8.5)
|
|
|
|
6.4
|
|
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit after tax
|
|
81.1
|
|
|
|
(446.4)
|
|
|
|
(365.3)
|
|
|
|
7.7
|
|
|
|
(57.1)
|
|
|
|
(49.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of the Company
(notes 6 &
7)
|
|
81.0
|
|
|
|
(446.4)
|
|
|
|
(365.4)
|
|
|
|
7.6
|
|
|
|
(57.1)
|
|
|
|
(49.5)
|
|
|
Non-controlling
interests
|
|
0.1
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81.1
|
|
|
|
(446.4)
|
|
|
|
(365.3)
|
|
|
|
7.7
|
|
|
|
(57.1)
|
|
|
|
(49.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US¢
|
|
|
|
|
|
|
|
US¢
|
|
|
|
US¢
|
|
|
|
|
|
|
|
US¢
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/earnings per share
(note 6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- basic
|
|
6.41
|
|
|
|
|
|
|
|
(28.91)
|
|
|
|
0.60
|
|
|
|
|
|
|
|
(3.92)
|
|
|
- diluted
|
|
6.41
|
|
|
|
|
|
|
|
(28.91)
|
|
|
|
0.60
|
|
|
|
|
|
|
|
(3.92)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandarin Oriental International Limited
Consolidated Statement of Comprehensive
Income
for the year ended 31st December 2023
|
|
|
|
|
|
|
|
|
2023 US$m
|
|
|
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year
|
|
|
(365.3)
|
|
|
|
|
(49.4)
|
|
|
|
Other comprehensive
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be
reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements of defined benefit
plans
|
|
|
(2.5)
|
|
|
|
|
(2.1)
|
|
|
|
Revaluation surplus of
right-of-use assets before transfer to investment
properties
|
|
|
-
|
|
|
|
|
79.8
|
|
|
|
Tax on items that will not be
reclassified
|
|
|
0.4
|
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2.1)
|
|
|
|
|
78.0
|
|
|
|
Items that may be reclassified
subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
Net exchange translation
differences
|
|
|
|
|
|
|
|
|
|
|
|
- net gain/(loss) arising during
the year
|
|
|
34.0
|
|
|
|
|
(58.2)
|
|
|
|
- transfer to profit and
loss
|
|
|
33.5
|
|
|
|
|
-
|
|
|
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
- net (loss)/gain arising during
the
year
|
|
|
(15.1)
|
|
|
|
|
16.6
|
|
|
|
Tax relating to items that may be
reclassified
|
|
|
1.3
|
|
|
|
|
(2.4)
|
|
|
|
Share of other comprehensive
income of associates
and joint ventures
|
|
|
0.4
|
|
|
|
|
0.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54.1
|
|
|
|
|
(43.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income for the
year, net of tax
|
|
|
52.0
|
|
|
|
|
34.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive expense for
the year
|
|
|
(313.3)
|
|
|
|
|
(14.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of the
Company
|
|
|
(314.2)
|
|
|
|
|
(14.7)
|
|
|
|
Non-controlling
interests
|
|
|
0.9
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(313.3)
|
|
|
|
|
(14.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandarin Oriental International Limited
Consolidated Balance Sheet
at 31st December 2023
|
|
|
|
|
|
|
|
|
|
|
2023
US$m
|
|
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
43.7
|
|
|
|
45.7
|
|
|
Tangible assets (note 8)
|
|
618.6
|
|
|
|
916.3
|
|
|
Right-of-use assets
|
|
229.1
|
|
|
|
242.4
|
|
|
Investment properties (note 9)
|
|
2,060.3
|
|
|
|
2,472.6
|
|
|
Associates and joint
ventures
|
|
155.8
|
|
|
|
203.8
|
|
|
Other investments
|
|
14.0
|
|
|
|
14.0
|
|
|
Deferred tax assets
|
|
14.0
|
|
|
|
14.2
|
|
|
Pension assets
|
|
0.6
|
|
|
|
3.0
|
|
|
Non-current debtors
|
|
10.9
|
|
|
|
12.2
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
3,147.0
|
|
|
|
3,924.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stocks
|
|
5.0
|
|
|
|
5.0
|
|
|
Current debtors
|
|
80.3
|
|
|
|
90.5
|
|
|
Current tax assets
|
|
1.7
|
|
|
|
6.8
|
|
|
Cash and bank balances
|
|
178.8
|
|
|
|
226.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
265.8
|
|
|
|
328.5
|
|
|
Assets classified as held for sale
(note 10)
|
|
331.9
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
597.7
|
|
|
|
328.5
|
|
|
|
|
|
|
|
|
|
|
|
Current creditors
|
|
(158.0)
|
|
|
|
(159.1)
|
|
|
Current borrowings (note 11)
|
|
(414.9)
|
|
|
|
(2.2)
|
|
|
Current lease
liabilities
|
|
(5.8)
|
|
|
|
(5.9)
|
|
|
Current tax liabilities
|
|
(22.1)
|
|
|
|
(18.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(600.8)
|
|
|
|
(185.6)
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities directly associated
with assets classified as held for sale (note 10)
|
|
(24.1)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
(624.9)
|
|
|
|
(185.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net current
(liabilities)/assets
|
|
(27.2)
|
|
|
|
142.9
|
|
|
|
|
|
|
|
|
|
|
|
Long-term borrowings (note 11)
|
|
(0.6)
|
|
|
|
(599.8)
|
|
|
Non-current lease
liabilities
|
|
(110.6)
|
|
|
|
(123.5)
|
|
|
Deferred tax
liabilities
|
|
(42.0)
|
|
|
|
(41.6)
|
|
|
Pension liabilities
|
|
-
|
|
|
|
(0.1)
|
|
|
Non-current creditors
|
|
(1.1)
|
|
|
|
(4.5)
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
(154.3)
|
|
|
|
(769.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,965.5
|
|
|
|
3,297.6
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
|
|
|
|
|
Share capital
|
|
63.2
|
|
|
|
63.2
|
|
|
Share premium
|
|
500.9
|
|
|
|
500.7
|
|
|
Revenue and other
reserves
|
|
2,396.3
|
|
|
|
2,730.2
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' funds
|
|
2,960.4
|
|
|
|
3,294.1
|
|
|
Non-controlling
interests
|
|
5.1
|
|
|
|
3.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,965.5
|
|
|
|
3,297.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mandarin Oriental International Limited
Consolidated Statement of Changes in Equity
for the year ended 31st December 2023
|
|
|
Share
capital
US$m
|
|
Share
premium
US$m
|
|
Capital
reserves
US$m
|
Revenue
reserves
US$m
|
|
Asset
revaluation reserves US$m
|
|
Hedging
reserves
US$m
|
|
Exchange
reserves
US$m
|
|
Attributable to shareholders of the Company US$m
|
|
Attributable to non-
controlling interests
US$m
|
|
Total
equity
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1st
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 31st
December
|
63.2
|
|
500.9
|
|
258.9
|
|
(815.9)
|
|
3,023.2
|
|
1.7
|
|
(71.6)
|
|
2,960.4
|
|
5.1
|
|
2,965.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1st
January
|
63.2
|
|
500.5
|
|
259.1
|
|
(377.7)
|
|
2,943.4
|
|
0.9
|
|
(80.6)
|
|
3,308.8
|
|
3.5
|
|
3,312.3
|
|
Total comprehensive
income
|
-
|
|
-
|
|
-
|
|
(51.1)
|
|
79.8
|
|
14.5
|
|
(57.9)
|
|
(14.7)
|
|
-
|
|
(14.7)
|
|
Transfer
|
-
|
|
0.2
|
|
(0.2)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31st
December
|
63.2
|
|
500.7
|
|
258.9
|
|
(428.8)
|
|
3,023.2
|
|
15.4
|
|
(138.5)
|
|
3,294.1
|
|
3.5
|
|
3,297.6
|
Revenue reserves as at 31st
December 2023 included cumulative fair value losses on the
investment property under development of US$1,207.8 million (2022:
US$720.2 million).
|
|
|
Mandarin Oriental International Limited
Consolidated Cash Flow Statement
for the year ended 31st December 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
US$m
|
|
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss (note 3)
|
|
(341.0)
|
|
|
|
(42.6)
|
|
|
Depreciation, amortisation and
impairment
|
|
51.1
|
|
|
|
58.2
|
|
|
Other non-cash items
|
|
440.3
|
|
|
|
63.5
|
|
|
Movements in working
capital
|
|
(2.8)
|
|
|
|
(1.1)
|
|
|
Interest received
|
|
8.5
|
|
|
|
2.1
|
|
|
Interest and other financing
charges paid
|
|
(17.6)
|
|
|
|
(15.6)
|
|
|
Tax paid
|
|
(2.6)
|
|
|
|
(8.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135.9
|
|
|
|
56.5
|
|
|
Dividends and interest from
associates and joint ventures
|
|
5.3
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities
|
|
141.2
|
|
|
|
56.5
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of tangible
assets
|
|
(13.7)
|
|
|
|
(12.8)
|
|
|
Additions to investment
properties
|
|
(71.0)
|
|
|
|
(30.2)
|
|
|
Purchase of intangible
assets
|
|
(6.4)
|
|
|
|
(6.1)
|
|
|
Additions to right-of-use
assets
|
|
-
|
|
|
|
(0.2)
|
|
|
Refund on Munich
expansion
|
|
-
|
|
|
|
4.0
|
|
|
Purchase of other
investments
|
|
(0.1)
|
|
|
|
(0.2)
|
|
|
Purchase of an
associate
|
|
-
|
|
|
|
(1.0)
|
|
|
Advance to associates and joint
ventures
|
|
(20.7)
|
|
|
|
(2.4)
|
|
|
Repayment of loans to associates
and joint ventures
|
|
67.2
|
|
|
|
4.2
|
|
|
Sale of a subsidiary (note 13)
|
|
75.6
|
|
|
|
-
|
|
|
Net proceeds from asset disposals
(note 14)
|
|
-
|
|
|
|
131.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
30.9
|
|
|
|
86.7
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawdown of borrowings
|
|
58.1
|
|
|
|
23.0
|
|
|
Repayment of borrowings
|
|
(247.9)
|
|
|
|
(139.5)
|
|
|
Principal elements of lease
payments
|
|
(6.2)
|
|
|
|
(5.7)
|
|
|
Dividends paid by the
Company (note 12)
|
|
(19.0)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
(215.0)
|
|
|
|
(122.2)
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash
and cash equivalents
|
|
(42.9)
|
|
|
|
21.0
|
|
|
Cash and cash equivalents at 1st
January
|
|
226.2
|
|
|
|
212.8
|
|
|
Effect of exchange rate
changes
|
|
7.0
|
|
|
|
(7.6)
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at 31st
December
|
|
190.3
|
|
|
|
226.2
|
|
|
|
|
|
|
|
|
|
|
At 31st 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 31st December 2023 which have been prepared in
conformity with International Financial Reporting Standards
('IFRS'), including International Accounting Standards ('IAS') and
Interpretations as issued by the International Accounting Standards
Board ('IASB').
At 31st December 2023, the current
liabilities of the Group exceeded its current assets by US$27.2
million. Included in the current liabilities were the current
portion of long-term bank loans of US$414.9 million due to mature
within 2024. In February 2024, the Group has refinanced bank
facilities of US$409.2 million to enable the Group to meet its
obligations as and when they fall due. Accordingly, the
financial statements have been prepared on a going concern
basis.
The Group has adopted the
following standard and amendments for the annual reporting period
commencing 1st January 2023.
IFRS 17 'Insurance Contracts'
(effective from 1st January
2023)
The standard covers recognition,
measurement, presentation and disclosure for insurance
contracts. The Group has assessed its performance guarantees
provided to third-party hotel owners and concluded that current
arrangements do not include significant insurance risk. They
remain within the scope of the Group's existing revenue recognition
accounting policies.
Disclosure of Accounting Policies -
Amendments to IAS 1 and IFRS Practice Statement 2 (effective from 1st January
2023)
The amendments require entities to
disclose material rather than significant accounting policies. The
amendments define what is 'material accounting policy information'
and explain how to identify when accounting policy information is
material.
Material accounting policy
information is information that, when considered together with
other information included in an entity's financial statements, can
reasonably be expected to influence decisions that the primary
users of general purpose financial statements make on the basis of
those financial statements. IASB further clarifies that
immaterial accounting policy information does not need to be
disclosed. If it is disclosed, it should not obscure material
accounting information. To support this amendment, the IASB
also amended IFRS Practice Statement 2 Making Materiality
Judgements to provide guidance on how to apply the concept of
materiality to accounting policy disclosures.
The material accounting policies
following the adoption of IAS 1 are included in note 34 of the
financial statements.
Amendment to IAS 12 - Deferred Tax
related to Assets and Liabilities arising from a Single Transaction
(effective from 1st January
2023)
The amendment requires deferred tax
to be recognised on transactions that, on initial recognition, give
rise to equal amounts of taxable and deductible temporary
differences. They typically apply to transactions such as
leases of lessees and decommissioning obligations and require the
recognition of additional deferred tax assets and
liabilities. On adoption of the amendment, there is no impact
on the Group's consolidated financial statements.
Amendment to IAS 12 - International
Tax Reform - Pillar Two Model Rules (effective for annual reporting period
commencing on or after 1st January 2023)
The amendment provides a temporary
mandatory exception from deferred tax accounting in respect of
Pillar Two income taxes and certain additional disclosure
requirements. The Group is within the scope of the OECD
Pillar Two model rules, and has applied the amendment from 1st
January 2023.
Pillar Two legislation has been
enacted or substantially enacted in certain jurisdictions in which
the Group operates. The legislation will be effective for the
Group's annual reporting period commencing 1st January 2024.
Since the Pillar Two legislation was not effective at 31st December
2023, the Group has no related current tax exposure.
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 when the legislation comes into effect. The assessment
of the potential exposure to Pillar Two income taxes is based on
the latest financial information for the year ended 31st December
2023 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 Group does not expect a
material exposure to Pillar Two income taxes in those
jurisdictions.
Apart from the above, there are no
other standard or amendments which are effective in 2023 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
|
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By business activity:
|
|
|
|
|
|
Hotel ownership
|
486.8
|
|
400.9
|
|
|
Hotel & Residences branding
and management
|
94.5
|
|
68.5
|
|
|
Less: intra-segment
revenue
|
(23.2)
|
|
(15.3)
|
|
|
|
|
|
|
|
|
|
558.1
|
|
454.1
|
|
|
|
|
|
|
|
|
By geographical area:
|
|
|
|
|
|
Asia
|
219.9
|
|
141.4
|
|
|
Europe, the Middle East and Africa
('EMEA')
|
288.6
|
|
239.7
|
|
|
America
|
49.6
|
|
73.0
|
|
|
|
|
|
|
|
|
|
558.1
|
|
454.1
|
|
|
|
|
|
|
|
|
From contracts with customers:
|
|
|
|
|
|
Recognised at a point in
time
|
163.7
|
|
140.8
|
|
|
Recognised over time
|
375.8
|
|
295.2
|
|
|
|
|
|
|
|
|
|
539.5
|
|
436.0
|
|
|
From other sources:
|
|
|
|
|
|
Rental income
|
18.6
|
|
18.1
|
|
|
|
|
|
|
|
|
|
558.1
|
|
454.1
|
|
|
|
|
|
|
3. EBITDA
(EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND
AMORTISATION) AND
OPERATING LOSS FROM SUBSIDIARIES
|
|
|
2023
US$m
|
|
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By business activity:
|
|
|
|
|
|
|
|
|
Hotel ownership
|
|
101.9
|
|
|
|
45.3
|
|
|
Hotel & Residences branding
and management
|
|
52.5
|
|
|
|
33.8
|
|
|
Property development
|
|
(1.0)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Underlying EBITDA from
subsidiaries
|
|
153.4
|
|
|
|
79.1
|
|
|
Non-trading items (note 7)
|
|
|
|
|
|
|
|
|
- change in fair value of
investment properties
|
|
(486.7)
|
|
|
|
(104.1)
|
|
|
- change in fair value of other
investments
|
|
(0.4)
|
|
|
|
-
|
|
|
- gain on sale of a
subsidiary/asset disposals
|
|
43.8
|
|
|
|
40.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(443.3)
|
|
|
|
(63.5)
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA from
subsidiaries
|
|
(289.9)
|
|
|
|
15.6
|
|
|
Underlying depreciation and
amortisation from subsidiaries
|
|
(51.1)
|
|
|
|
(58.2)
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
(341.0)
|
|
|
|
(42.6)
|
|
|
|
|
|
|
|
|
|
|
|
By geographical area:
|
|
|
|
|
|
|
|
|
Asia
|
|
41.5
|
|
|
|
(8.7)
|
|
|
EMEA
|
|
108.5
|
|
|
|
82.8
|
|
|
America
|
|
3.4
|
|
|
|
5.0
|
|
|
|
|
|
|
|
|
|
|
|
Underlying EBITDA from
subsidiaries
|
|
153.4
|
|
|
|
79.1
|
|
|
|
|
|
|
|
|
|
|
4. SHARE OF
RESULTS OF ASSOCIATES AND JOINT VENTURES
|
|
|
|
Depreciation
|
|
Operating
|
|
Net
|
|
|
|
Net
|
|
|
|
|
and
|
|
profit/
|
|
financing
|
|
|
|
profit/
|
|
|
EBITDA
|
|
amortisation
|
|
(loss)
|
|
charges
|
|
Tax
|
|
(loss)
|
|
|
US$m
|
|
US$m
|
|
US$m
|
|
US$m
|
|
US$m
|
|
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
By business activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel ownership
|
23.8
|
|
(15.2)
|
|
8.6
|
|
(8.9)
|
|
0.2
|
|
(0.1)
|
|
Other
|
0.4
|
|
(0.5)
|
|
(0.1)
|
|
(0.1)
|
|
-
|
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
24.2
|
|
(15.7)
|
|
8.5
|
|
(9.0)
|
|
0.2
|
|
(0.3)
|
|
Non-trading items (note 7)
|
|
|
|
|
|
|
|
|
|
|
|
|
- closure costs
|
(0.6)
|
|
-
|
|
(0.6)
|
|
-
|
|
-
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.6
|
|
(15.7)
|
|
7.9
|
|
(9.0)
|
|
0.2
|
|
(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By geographical area:
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
10.4
|
|
(10.1)
|
|
0.3
|
|
(3.3)
|
|
0.1
|
|
(2.9)
|
|
EMEA
|
5.5
|
|
(3.6)
|
|
1.9
|
|
(3.3)
|
|
0.1
|
|
(1.3)
|
|
America
|
8.3
|
|
(2.0)
|
|
6.3
|
|
(2.4)
|
|
-
|
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
24.2
|
|
(15.7)
|
|
8.5
|
|
(9.0)
|
|
0.2
|
|
(0.3)
|
|
Non-trading items (note 7)
|
|
|
|
|
|
|
|
|
|
|
|
|
- closure costs
|
(0.6)
|
|
-
|
|
(0.6)
|
|
-
|
|
-
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.6
|
|
(15.7)
|
|
7.9
|
|
(9.0)
|
|
0.2
|
|
(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
By business activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel ownership
|
32.3
|
|
(15.4)
|
|
16.9
|
|
(5.6)
|
|
(1.0)
|
|
10.3
|
|
Other
|
-
|
|
(0.5)
|
|
(0.5)
|
|
(0.1)
|
|
-
|
|
(0.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.3
|
|
(15.9)
|
|
16.4
|
|
(5.7)
|
|
(1.0)
|
|
9.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By geographical area:
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
19.2
|
|
(10.4)
|
|
8.8
|
|
(2.4)
|
|
(1.1)
|
|
5.3
|
|
EMEA
|
4.0
|
|
(3.4)
|
|
0.6
|
|
(1.1)
|
|
0.1
|
|
(0.4)
|
|
America
|
9.1
|
|
(2.1)
|
|
7.0
|
|
(2.2)
|
|
-
|
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.3
|
|
(15.9)
|
|
16.4
|
|
(5.7)
|
|
(1.0)
|
|
9.7
|
5.
TAX
|
|
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax (charged)/credited to profit
and loss is analysed as follows:
|
|
|
|
|
|
|
Current tax
|
|
(11.8)
|
|
(12.0)
|
|
|
Deferred tax
|
|
(1.7)
|
|
9.9
|
|
|
|
|
|
|
|
|
|
|
|
(13.5)
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
By business activity:
|
|
|
|
|
|
|
Hotel ownership
|
|
(7.2)
|
|
5.3
|
|
|
Hotel & Residences branding
and management
|
|
(6.3)
|
|
(7.4)
|
|
|
|
|
|
|
|
|
|
|
|
(13.5)
|
|
(2.1)
|
|
|
|
|
|
|
|
|
|
By geographical area:
|
|
|
|
|
|
|
Asia
|
|
(8.3)
|
|
(0.2)
|
|
|
EMEA
|
|
(4.3)
|
|
(5.2)
|
|
|
America
|
|
(0.9)
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
(13.5)
|
|
(2.1)
|
Tax relating to components of
other comprehensive income is analysed as follows:
|
|
Remeasurements of defined benefit
plans
|
|
0.4
|
|
0.3
|
|
|
Cash flow hedges
|
|
1.3
|
|
(2.4)
|
|
|
|
|
|
|
|
|
|
|
|
1.7
|
|
(2.1)
|
Tax on profits has been calculated
at rates of taxation prevailing in the territories in which the
Group operates.
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 P.T. Jaya Mandarin Agung,
the owning company of Mandarin Oriental, Jakarta (note 16).
In 2022, current tax included a
non-trading capital gain tax charge of US$4.3 million and deferred
tax included a non-trading credit of US$10.7 million in relation to
the sale of Mandarin Oriental, Washington D.C. (note
14).
Share of tax credit of associates and joint ventures of US$0.2 million
(2022: share of tax charge of US$1.0
million) is included in share of results of
associates and joint ventures (note 4).
6. (LOSS)/EARNINGS PER SHARE
Basic loss per share is calculated
using loss attributable to shareholders of US$365.4 million (2022: US$49.5 million) and the weighted
average number of 1,263.8 million (2022: 1,263.7 million) shares in issue during the
year.
Diluted loss per share is
calculated using loss attributable to shareholders of US$365.4
million (2022: US$49.5 million) and the weighted average number of
1,263.8 million (2022: 1,263.8 million) shares in issue after
adjusting for the number of shares which are deemed to be issued
for no consideration under the share-based long-term incentive
plans based on the average share price during the year.
The weighted average number of
shares is arrived at as follows:
|
|
Ordinary
shares in millions
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
for basic loss
per share
calculation
|
|
1,263.8
|
|
1,263.7
|
|
|
Adjustment for shares deemed to be
issued for no consideration under the share-based long-term
incentive plans
|
|
-
|
|
0.1
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
for diluted loss
per share
calculation
|
|
1,263.8
|
|
1,263.8
|
Additional basic and diluted
loss/earnings per share are also calculated based on underlying
profit attributable to shareholders. A reconciliation of
loss/earnings is set out below:
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US$m
|
Basic
(loss)/
earnings
per
share
US¢
|
Diluted
(loss)/
earnings
per
share
US¢
|
|
US$m
|
|
Basic
(loss)/
earnings
per
share
US¢
|
|
Diluted
(loss)/ earnings
per
share US¢
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to
shareholders
|
(365.4)
|
|
(28.91)
|
|
(28.91)
|
|
(49.5)
|
|
(3.92)
|
|
(3.92)
|
|
|
Non-trading items (note 7)
|
446.4
|
|
|
|
|
|
57.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying profit attributable to
shareholders
|
81.0
|
|
6.41
|
|
6.41
|
|
7.6
|
|
0.60
|
|
0.60
|
7. NON-TRADING ITEMS
Non-trading items are separately
identified to provide greater understanding of the Group's
underlying business performance. Items classified as
non-trading items include fair value gains or losses on revaluation
of investment properties and investments which are measured at fair
value through profit and loss; gains and losses arising from the
sale of businesses, investments and properties; impairment of
non-depreciable intangible assets and other investments; provisions
for the closure of businesses; acquisition-related costs in
business combinations; and other credits and charges of a
non-recurring nature that require inclusion in order to provide
additional insight into underlying business performance.
An analysis of non-trading items
after interest, tax and non-controlling interests is set out
below:
|
|
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of investment
properties (note
9)
|
|
(486.7)
|
|
(104.1)
|
|
|
Change in fair value of other
investments
|
|
(0.4)
|
|
-
|
|
|
Gain on sale of a subsidiary
(note 16)/asset disposals
(note 14)
|
|
41.3
|
|
47.0
|
|
|
|
|
|
|
|
|
|
|
|
(445.8)
|
|
(57.1)
|
|
|
Share of results of associates and
joint
ventures
- closure costs (note
4)
|
|
(0.6)
|
|
-
|
|
|
|
|
(446.4)
|
|
(57.1)
|
8. TANGIBLE ASSETS
|
|
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening net book value
|
|
916.3
|
|
1,098.2
|
|
|
Exchange differences
|
|
34.0
|
|
(58.5)
|
|
|
Additions
|
|
13.1
|
|
12.8
|
|
|
Disposals (note 14)
|
|
(0.8)
|
|
(90.3)
|
|
|
Transfer to investment
properties
|
|
-
|
|
(0.6)
|
|
|
Classified as held for sale
(note 10)
|
|
(305.1)
|
|
-
|
|
|
Depreciation charge
|
|
(38.9)
|
|
(45.3)
|
|
|
|
|
|
|
|
|
|
Closing net book value
|
|
618.6
|
|
916.3
|
9. INVESTMENT PROPERTIES
|
|
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening fair value
|
|
2,472.6
|
|
2,462.0
|
|
|
Exchange differences
|
|
(5.5)
|
|
0.6
|
|
|
Additions
|
|
79.9
|
|
26.4
|
|
|
Transfer from tangible
assets
|
|
-
|
|
0.6
|
|
|
Transfer from right-of-use
assets
|
|
-
|
|
87.1
|
|
|
Decrease in fair value
|
|
(486.7)
|
|
(104.1)
|
|
|
|
|
|
|
|
|
|
Closing fair value
|
|
2,060.3
|
|
2,472.6
|
In 2022, an owned-use property,
including tangible assets of US$0.6 million and right-of-use assets
of US$87.1 million, was transferred to a completed residential
investment property following the change of use determined by the
management.
At 31st December 2023, investment
properties comprised a commercial investment property under
development of US$1,971.9 million (2022: US$2,384.9 million) and a
completed residential investment property of US$88.4 million (2022:
US$87.7 million).
10. ASSETS CLASSIFIED AS
HELD FOR SALE
|
|
|
|
2023
US$m
|
|
2022
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 has
announced that it has, pursuant to a preliminary sale agreement,
signed an option to sell its interests in Mandarin Oriental, Paris
(the 'Paris hotel') to SLH Hotels Srl, the owner of Mandarin
Oriental, Milan, for US$227.0 million (€205.0 million). The
two retail units at the main entrance of the Paris hotel are not
included in the sale and were being actively marketed for sale at
31st December 2023.
The Group will retain a long-term
management agreement to manage and brand the Paris
hotel.
The Group's acceptance of the offer
for its interests in the Paris hotel is subject to completion of a
consultation process with the relevant Works Council. Subject
to that process and to the statutory right of pre-emption by the
City of Paris, among other conditions, it is anticipated that final
documentation will be signed and completion of the sale of the
Paris hotel will take place on or after 31st March 2024.
* Included cash and bank
balances of US$11.5 million.
11. BORROWINGS
|
|
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans
|
|
415.5
|
|
599.8
|
|
|
Other borrowings
|
|
-
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
415.5
|
|
602.0
|
|
|
Current
|
|
414.9
|
|
2.2
|
|
|
Long-term
|
|
0.6
|
|
599.8
|
|
|
|
|
|
|
|
|
|
|
|
415.5
|
|
602.0
|
The Group has borrowing facilities
of US$754.4 million due to mature within 2024. In February
2024, the Group has refinanced bank facilities of US$409.2 million
for three to five years.
12. DIVIDENDS
|
|
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim dividend in respect of
2023 of US¢1.50
(2022: nil) per share
|
|
19.0
|
|
-
|
A final dividend in respect of
2023 of US¢3.50 (2022: nil) per share amounting to a total of
US$44.2 million (2022: nil) is proposed by the Board. The
dividend proposed will not be accounted for until it has been
approved at the 2024 Annual General Meeting. The amount will
be accounted for as an appropriation of revenue reserves in the
year ending 31st December 2024.
13. SALE OF A
SUBSIDIARY
Net cash inflow for the sale of a
subsidiary, P.T. Jaya Mandarin Agung (note 16), is summarised as
follows:
|
|
2023
US$m
|
|
2022
US$m
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
4.8
|
|
-
|
|
Currents assets
|
5.2
|
|
-
|
|
Non-current liabilities
|
(0.6)
|
|
-
|
|
Current liabilities
|
(4.0)
|
|
-
|
|
Non-controlling
interests
|
0.4
|
|
-
|
|
|
|
|
|
|
Net assets
|
5.8
|
|
-
|
|
Cumulative exchange translation
difference
|
33.1
|
|
-
|
|
Profit on disposal before
tax
|
43.8
|
|
-
|
|
|
|
|
|
|
Sales proceeds (net of selling
expenses)
|
82.7
|
|
-
|
|
Adjustment for deferred
payments
|
(3.2)
|
|
-
|
|
Cash and cash equivalents of a
subsidiary disposed of
|
(3.9)
|
|
-
|
|
|
|
|
|
|
Net cash inflow
|
75.6
|
|
-
|
|
|
|
|
|
The revenue and loss after tax in
respect of the subsidiary disposed of during the year amounted to
US$6.0 million and US$0.6 million, respectively.
14. ASSET
DISPOSALS
In September 2022, the Group
completed the sale of Mandarin Oriental, Washington D.C., including
tangible assets and stocks of US$90.8 million, for gross proceeds
of US$139.0 million. After taking into account the selling
expenses and sales related taxes of US$7.6 million, the net
proceeds were US$131.4 million. As a result, the Group has
recognised a post-tax, non-trading gain of US$47.0 million which
included a net tax credit of US$6.4 million.
15. CAPITAL
COMMITMENTS
At 31st December 2023, total
capital commitments of the Group amounted to US$354.6 million
(2022: US$512.2 million).
16. 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 (2022: six)
associate and joint venture hotels and received management fees of
US$14.3 million (2022: US$14.7 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 2023 amounted to US$2.2 million (2022: US$1.4 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 2023 and 2022 (due to net loss).
The Group rented a property to DFI
Retail Group, a subsidiary of JMH, and received rental income of
US$0.6 million (2022: US$0.7 million), based on lease agreements on
normal commercial terms. The lease was terminated during the
year.
In respect of the Causeway Bay
site under development, the Group paid consultancy fees of US$1.9
million (2022: US$3.2 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$59.8 million (2022: US$13.6 million).
The HKL agreement and GCL contract were arranged on normal
commercial terms.
In June
2023, the Group completed the sale of 96.9% ownership stake in P.T.
Jaya Mandarin Agung, 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. The Group has
retained the hotel management contracts to manage and brand the
hotel. Mandarin Oriental, Jakarta has become a managed hotel
of the Group following the sale (notes 7 and 13).
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 2023 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.
1. Reputational
Risk and Value of the Brand
The Group's brand equity and
global reputation is fundamental in supporting its ability to offer
premium products and services and to achieving acceptable revenues
and profit margins. Accordingly, any damage to the Group's
brand equity or reputation, including as a result of adverse
effects relating to health and safety, acts or omissions by Group
personnel, and any allegations of socially irresponsible policies
and practices, might adversely impact the attractiveness of the
Group's properties or the loyalty of the Group's guests.
Mitigation
·
Engage external consultants and experts where
necessary.
·
Perform regular cybersecurity and data
vulnerability assessment at least annually and/or penetration
testing to identify weaknesses.
·
Active monitoring and use of social
media.
2. 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
and exposure to that jurisdiction.
Mitigation
·
Geographical diversification of the businesses
through organic growth.
·
Maintaining financial strength under challenging
scenarios.
·
Further strengthening the Group's brand to sustain
competitiveness and resilience.
3. Commercial
Risk
The Group operates within the
highly competitive global hotel industry. Failure to compete
effectively in terms of product quality, service levels, or price
can adversely affect earnings. This may also include failure to
adapt to rapidly evolving customer preferences and
expectations. Significant competitive pressure or the
oversupply of hotel rooms in a specific market can reduce
margins. Advances in technology creating new or disruptive
competitive pressures might also negatively affect the trading
environment.
The Group competes with other
luxury hotel operators for new opportunities in the areas of hotel
management, residences management and residences branding.
Failure to establish and maintain relationships with hotel owners
or developers could adversely affect the Group's
businesses.
The Group also makes investment
decisions regarding acquiring new hotel properties and undertaking
significant renovations or redevelopments in its owned properties,
exposing it to construction risks. The success of these
investments is measured over the longer term and, as a result, is
subject to market risk.
Mandarin Oriental's continued
growth depends on opening of new hotels and branded
residences. Most of the Group's new developments are
controlled by third-party owners and developers. As a result,
they can be subject to delays due to issues attributable to
planning and construction, sourcing of finance, and the sale of
residential units. In extreme circumstances, such factors
might lead to the cancellation of a project.
Mitigation
·
Utilise market intelligence and deploy strategies
for business-to-consumer business.
·
Establish customer relationship management and
digital commerce capabilities.
·
Engage in longer-term contracts and proactively
approach suppliers for contract renewals.
·
Re-engineer existing business processes to take
advantage of new technological capabilities.
·
Invest in and partner with companies that can
provide the Group access to different capabilities and
technologies.
4. Environmental
and Climate Risk
Environmental disasters such as
earthquakes, floods and typhoons can damage the Group's assets and
disrupt operations. Global warming-induced climate change has
increased the frequency and intensity of storms, leading to higher
insurance premiums or reduced coverage for such natural
disasters.
With governments also taking a
more proactive approach towards carbon taxes, renewable energies
and electric vehicles, additional investments and efforts to
address physical and transition risks of climate change are
anticipated from businesses.
With interest in sustainability
surging in recent years from investors, governments and the general
public, expectations by regulators and other stakeholders for
accurate corporate sustainability reporting and commitments towards
carbon neutrality to address climate change are also growing. This
brings increasing challenges to the Group to meet key stakeholders'
expectations.
There is potential for negative
publicity and operational disruption arising from conflict between
activists and the Group's businesses that is perceived to be
engaged in trade and activities that are environmentally
unfriendly.
Mitigation
·
Executive Advisory Panel, Sustainability
Leadership Council and Hotel Sustainability Committees have been in
place to mobilise and coordinate sustainability efforts across the
Group.
· A sustainability strategy framework, including a pillar for
the planet, drives the Group's sustainability agenda.
·
Renewed environmental targets for 2025 and 2030
have been determined per property through a Group-wide inventory
management plan.
·
Identify environmental impact opportunities that
address multiple problems and risks and gaps that are generally
relevant to all properties and society in general.
·
Assess emerging Environmental, Social and
Governance (ESG) reporting standards and requirements, to align
Group disclosures to best market practice.
·
Conduct climate risk assessments and adaptation
action plans based on recommendations of Task Force on
Climate-Related Financial Disclosure (TCFD), including implementing
measures to address physical risks posed by climate change and
identifying opportunities in global transition to a low carbon
economy.
5. 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; ii) interest rate
risk through the impact of rate changes on interest bearing assets
and liabilities; and iii) securities price risk as a result of its
equity investments and limited partnership investment funds which
are measured at fair value through profit and loss, and debt
investments which are measured at fair value through other
comprehensive income.
The Group's credit risk is
primarily attributable to deposits with banks, contractual cash
flows of debt investments carried at amortised cost and those
measured at fair value through other comprehensive income, credit
exposures to customers and derivative financial instruments with a
positive fair value.
The Group may face liquidity risk
if its credit rating deteriorates or if it is unable to meet its
financing commitments.
Mitigation
·
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.
·
Regular internal audits of compliance with
treasury policies.
·
Adopt appropriate credit guidelines to manage
counterparty risk.
·
When economically feasible, take borrowings in
local currency to hedge foreign exchange exposures on
investments.
·
Fix a portion of borrowings in fixed
rates.
·
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.
·
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.
·
Maintain sufficient cash and marketable
securities, and availability of funding from an adequate amount of
committed credit facilities and the ability to close out market
positions.
·
The Group's treasury operations are managed as
cost centres and are not permitted to undertake speculative
transactions unrelated to underlying financial
exposures.
The detailed steps taken by the
Group to manage its exposure to financial risk are set out in the
Financial Review and a note to the financial statements in the
Report.
6. Governance
and Misconduct
Effective management of the
Group's risks depends on the existence of an appropriate governance
structure, tone from top leadership, and functioning system of
internal controls. Ethical breaches, management override of
controls, employee fraud and misconduct, or other deficiencies in
governance and three lines of internal controls may result in
financial loss and reputational damage for the Group.
Inadequate capability and
diversity in management or the Board may also lead to sub-optimal
deliberations and decisions.
Mitigation
·
Established Group-wide mandatory code of
conduct.
·
Maintain a robust Corporate Governance Framework
which includes a whistleblowing channel.
·
Maintain functionally independent internal audit
function that reports to the Group Audit Committee on risk
management, the control environment and significant non-compliance
matters.
·
Maintain Professional Indemnity, Crime and General
Liability insurance policies with adequate coverage.
7. Health,
Safety and Product Quality
The Group's colleagues engage in
physical activities that may lead to serious injury or fatal
incidents if work conditions are unsafe or workers do not take due
care to observe safety procedures.
The safety and quality of food
products and other items delivered by the Group are fundamental to
its reputation with customers. Any actual or perceived
deficiency in product safety or quality may damage consumer
confidence and the brand's reputation, leading to financial
loss.
Mitigation
·
Establish safe working environments and regular
safety training for all employees and subcontractors.
·
Establish contractual requirements for
contractors to comply with high expected levels of safety
standards.
·
Conduct occupational health and safety awareness
campaigns.
·
Establishing product quality and safety standards,
guidelines.
·
Ensure suppliers follow the Group's guidelines,
principals' requirements, and local regulations.
8. IT and
Cybersecurity
The Group's businesses are ever
more reliant on technology in their operations and face increasing
cyber-attacks from groups targeting both individuals and
businesses. As a result, the privacy and security of customer
and corporate information are at risk of being compromised through
a breach of our or our suppliers' IT systems or the unauthorised or
inadvertent release of information, resulting in brand damage,
impaired customer trust, loss of competitiveness or regulatory
action.
Cyber-attacks 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.
Mitigation
·
Engage external consultants to perform
assessments on the business units with industry
benchmarks.
·
Define cybersecurity programme and centralised
function to provide oversight, promote cybersecurity hygiene,
strengthen cybersecurity defences and manage cybersecurity
incidents.
·
Perform regular vulnerability assessment and
penetration testing to identify weaknesses.
·
Maintain disaster recovery plans and backup for
data restoration.
·
Arrange regular security awareness training at
least annually and phishing testing to raise users' cybersecurity
awareness.
·
Conduct regular internal audits of IT general
controls and cybersecurity.
9.
Pandemic
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. While the governments and businesses have
gained experience from COVID-19 in preparing for and responding to
future pandemic scenarios, nevertheless 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 while vaccines are
unavailable.
Mitigation
·
Increase flexibility and resilience of work
arrangements, including tools that enable employees to effectively
work from home, where possible.
·
Test business continuity plans periodically for
various scenarios including loss of premises, systems, people and
extended periods of split teams.
·
Increase resilience of supply chain with sourcing
alternative suppliers for key inputs and close coordination with
logistics partners.
10. Political and 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. In
recent years, sources of uncertainty include geopolitical tensions
between China and the United States, terrorism and government
instability in parts of South East Asia. Rising costs of fuel
and staple foods are particularly sensitive for developing markets
where the Group operates, heightening the risk of civil discontent
and political instability. The imposition of export bans by
some governments on food and raw materials adds further
uncertainties in the availability and cost of supplies for the
Group's hotels and residences that import these items.
The Group's business is exposed to
the risk of adverse developments in global and regional economies
and financial markets, either directly, or through the impact such
developments might have on the Group's joint venture partners,
associates, bankers, suppliers, or customers. 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.
Mitigation
·
Maintain the Group's financial strength and
funding sources under scenarios of economic downturn and other
stresses.
·
Monitor the volatile macroeconomic environment
and consider economic factors in strategic and financial planning
processes.
·
Make agile adjustments to existing business plans
and explore new business streams and new markets.
·
Review pricing strategies and keep conservative
assumptions on global commodity prices.
·
Insurance programme covering business
interruption due to civil unrest.
11. 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.
Recent and future workforce
rationalisation may raise the potential for organisational gaps in
capabilities, succession and controls.
With worker preferences shifting
towards greater importance attached to mental health and
well-being, the Group faces heightened risk for talent attraction
and retention if they cannot adapt their propositions for
workers.
Mitigation
·
Support workforce practices that promote
well-being and flexible work arrangements that are competitive with
the market.
·
Ensure proactive manpower planning and succession
planning are in place.
·
Enhance modern employer branding, training for
staff members, compensation, and benefits, including retention
incentives.
·
Implement strategy to promote Inclusion, Equity
and Diversity across the Group.
·
Establish employee assistance and counselling
programmes.
·
Enhance talent development plans to increase
employees' visibility on future career paths, including identifying
strategic talent pools.
·
Delivering new learning programmes to equip staff
with finance, procurement, HR, digital, IT and innovation technical
capabilities for business transformation.
12. Compliance with and
Changes to Laws and Regulations
The Group's businesses are subject
to several regulatory regimes in the territories they operate in.
New or changing laws and regulations in a wide range of areas such
as foreign ownership of assets and businesses, exchange controls,
building and environmental standards, competition, tax, employment,
and data privacy could potentially impact the operations and
profitability of the Group's business. Non-compliance may lead to
reputational damage from media exposure and financial loss due to
litigation or penalties by government authorities.
Mitigation
·
Engage legal experts at early stage to assess
implications of new rules.
·
Stay connected and informed of relevant new and
draft regulations.
·
Engage external consultants where
necessary.
·
Raise awareness via principals' brand conference
with an annual update on new regulations that may have been
implemented in other markets.
·
Lobby relevant associations and authorities
through appropriate channels.
·
Perform early scenario planning to assess
implications of new rules and prepare for contingencies.
Mandarin Oriental International Limited
Responsibility Statements
The Directors of the Company
confirm to the best of their knowledge that:
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 2023 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 15th May 2024, subject to approval at the
Annual General Meeting to be held on 8th May 2024, to shareholders
on the register of members at the close of business on 22nd March
2024. The shares will be quoted ex-dividend on 21st March
2024, and the share registers will be closed from 25th to 29th
March 2024, inclusive.
Shareholders will receive cash
dividends in United States Dollars, except when 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
Sterling. These shareholders may make new currency elections
for the 2023 final dividend by notifying the United Kingdom
transfer agent in writing by 26th April 2024. The Sterling
equivalent of dividends declared in United States Dollars will be
calculated by reference to a rate prevailing on 2nd May
2024.
Shareholders holding their shares
through CREST in the United Kingdom will receive cash dividends in
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 on CDP's
Direct Crediting Service ('DCS')
Those shareholders on 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 on CDP's DCS
Those shareholders not on 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 22nd March 2024, 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 21st March 2024.
Mandarin Oriental International Limited
About Mandarin Oriental Hotel Group
Mandarin Oriental Hotel Group is
an international hotel investment and management group with luxury
hotels, resorts and residences in sought-after destinations around
the world. Having grown from its Asian roots over 60
years ago into a global brand, the Group now operates 38 hotels,
nine residences and 23 exclusive
homes in 25 countries and territories, with each property
reflecting the Group's oriental heritage, local culture and unique
design. Mandarin Oriental regularly receives international
recognition and awards for outstanding service and quality
management, and 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$4.6 billion as at 31st December 2023.
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 to maximise profitability and long-term shareholder
value.
The parent company, Mandarin
Oriental International Limited, is incorporated in Bermuda and has
a primary listing in the standard segment of 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
|
|
|
Laurent Kleitman / Matthew
Bishop
|
(852)
2895 9288
|
|
Chris Orlikowski
|
(44) 791
7280 210
|
|
|
|
|
Brunswick Group Limited
|
|
|
William Brocklehurst
|
(852)
5685 9881
|
Full text of the Preliminary
Announcement of Results and the Preliminary Financial Statements
for the year ended 31st December 2023 can be accessed via the
Mandarin Oriental corporate website at
'https://www.mandarinoriental.com/en'.