Singapore Companies
Published February 28, 2007

HPL net jumps 173% with new accounting standard


HOTEL Properties Ltd (HPL) yesterday reported a more than 173 per cent increase in net profit to $99.5 million for its year ended Dec 31, 2006, boosted by a $55.7 million gain after adopting a new accounting standard.

Without the gain, the company's net profit rose 20.3 per cent to $43.8 million, from $36.4 million for the previous financial year. The company yesterday also proposed a first and final dividend of 2.5 cents per ordinary share, as well as a special dividend of the same amount.

HPL's turnover rose by 16.8 per cent to $355.4 million, from $304.2 million previously, due to 'higher revenue generation' by the group's hotels and properties divisions, while earnings per share rose to 21.78 cents a share, from 8.45 cents previously.

The company, which adopted the FRS 40 Investment Property accounting standard last year, said: 'An amount of $55.7 million for fair value changes to the investment properties during the year has been reflected as a gain in the group's income statement.'

The company said its rise in net profit was chiefly due to recognition of profits from its Robertson Blue development, from the Met Bangkok development on percentage of completion basis, as well as gains on the sale of condominium units at Four Seasons Park.

'The group also recorded fair value gains and profits on sale of short-term quoted investments as the stock markets picked up towards the end of the year,' HPL said. However, the company's bottom line was affected by pre-opening expenses incurred by its Kuda Huraa and Landaa Giraavaru resorts in the Maldives, as well as poor performance by its resorts in Bali.

The company said the outlook for the property market and hotel industry remains positive in Singapore.

'The reopening of Four Seasons Resort Maldives at Kuda Huraa and the opening of the new Four Seasons Resort Maldives at Landaa Giraavaru in late 2006 are expected to contribute positively to the group's operating results for 2007,' the company said. 'The group's hotels in Bali are expected to perform satisfactorily, given that Bali has been free of adverse events since 2005.'