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CDL Hotels New Zealand Limited Posts Record Profit

CDL Hotels New Zealand Limited Posts Record Profit

18 February 2005

The country’s largest hotel operator, CDL Hotels New Zealand Limited (“CDL”), today unveiled a 36.1 per cent jump in after-tax profit to a record $23.2 million for the year ended 31 December 2004.

Managing Director Mr Tsang Jat Meng, said the company had made enormous strides in the past five years, culminating in this very satisfying performance.

“You just need to look back to our earnings in the 2000 financial year when we reported a $1.5 million profit to see where we have come from,” he said.

“Our close attention to costs, service and profitability have meant we have been able to capitalise on favourable market conditions.”

CDL’s core earnings are derived from its portfolio of 30 hotels in New Zealand, which are owned, leased, franchised or managed under the Millennium, Copthorne and Kingsgate brands.

It also owns a 61.13 per cent shareholding in the property development and investment company CDL Investments New Zealand Limited (“CDLI”).

CDL delivered its record profit on revenue of $166.5 million, which was slightly down on the $168.3 million reported in the 2003 financial year. The reduction in revenue was mainly due to a fall in CDLI’s revenue, down from $27.2 million in 2003 to $20.2 in 2004.

The company’s hotel revenue was impacted by the closure of the Millennium Hotel Sydney at the end of the first quarter in 2003. However, hotel revenue still increased to $123 million, up from $121 million in 2003. Revenue growth for just the New Zealand hotels was up 6.7 per cent on 2003.

“Growth in the hotels’ revenue came from increases in both occupancy and yield,” Mr Tsang said. “This was the first time that annual occupancy has broken the 70 per cent barrier.” Average occupancy increased from 68 per cent in 2003 to 71 per cent in 2004.

“Occupancy was strongest in Christchurch and Queenstown. Excellent gains were made in the provincial centres especially in the Bay of Islands, which had another record year. Te Anau, Dunedin and Greymouth also had very good results”.

“Overall the company continues to maintain its market share with its key focus being on yield growth, which was up 6.4 per cent on last year”.

CDL has increased its hotel portfolio with the addition to its inventory earlier this year of the Copthorne Grand Central New Plymouth and the Copthorne Hotel and Resort Hokianga. The Copthorne Hotel & Resort Manuels Taupo was upgraded to a Millennium Hotel and Resort from the beginning of 2005. The company continues to look for strategic opportunities to expand its portfolio.

Looking ahead, Mr. Tsang said that the company had started the year on a positive note. “We believe that the company is in good shape and we expect 2005 to be another positive year”.

ENDS

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