Banyan Tree full year profit drops 91% to S$7m

Luxury resorts developer and operator Banyan Tree Holdings said its full year net profit fell 91 per cent to S$7 million.

The bottomline was hit by the political turmoil in Thailand last year, which led to a week-long closure of Bangkok’s Suvarnabhumi International Airport and left more than 300,000 tourists stranded in November.

The slowing global economy has also not helped. Revenue was flat, rising just 1 per cent to S$428 million.

In the fourth quarter, Banyan Tree lost S$7 million, overturning a profit of S$18.4 million in the year ago period.

Turnover fell 39 per cent to S$94 million.

There was lower contribution from its property sales, hotel residences and hotel investments segments.

Banyan Tree said it is looking to diversify its operations and spread its risks.

“We have decided that we should not have such a concentration of investment in Thailand or in Maldives, so… we are looking at ways we can rebalance our asset portfolio. We’re looking at divesting at some assets either partially or wholly, and then re-investing it in places like China where we have 7 or 8 projects under development right now and we could do with a lot of capital,” said Ho Kwon Ping, executive chairman of Banyan Tree Holdings.

Banyan Tree said 2009 will be difficult and it expects to report lower earnings compared with in 2008.

The company said it will implement cost-cutting measures to cope with the downturn, which it hopes can save the company S$50 million a year.

The cost containment measures include senior management taking 6 days of unpaid leave every month from March 1 and deferring some development projects.

Source : Channel NewsAsia – 26 Feb 2009

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