Pan Pacific Hotels Group’s Q2 profit drops 56%

The Pan Pacific Hotels Group’s (PPH) net profit for the second quarter of 2011 fell 56 per cent to S$6.35 million, from S$14.5 million achieved in the corresponding quarter of 2010.

The decline occurred despite a higher revenue of S$88.1 million this second quarter, a rise of 12 per cent from S$78.4 million achieved in Q2 of 2010.

In a statement released on Thursday, PPH said expenses rose because of higher administrative expenses incurred with the acquisition of ParkRoyal Melbourne Airport (PMA) in April.

Interest expense for the second quarter of 2011 soared by 329 per cent to S$3.2 million, from S$0.7 million in the corresponding quarter of 2010, due to higher interest incurred on Australian dollar borrowings in November 2010 and April 2011.

The borrowings were made to fund the purchase of the remaining interests in a subsidiary and the acquisition of PMA respectively.

Despite the challenges posed by recent developments in Europe, the United States and Japan, the outlook for the hotel sector in Singapore and the Asia Pacific region is expected to remain positive, the statement said.

“This could benefit the Group’s hotels,” it said.

Source : Channel NewsAsia – 12 Aug 2011

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