Millennium & Copthorne profit falls, plans to raise $60M
Millennium & Copthorne profit declines, plans $60 million capital raising for Chinese development
By Suze Metherell
Feb. 14 (BusinessDesk) – Millennium & Copthorne Hotels New Zealand, which operates 22 hotels across the country, reported a 37 percent decline in 2013 profit, reflecting one-time earthquake related gains in the year earlier.
Net profit fell to $32.2 million in the 12 months ended Dec. 31, from $50.7 million a year earlier, the Auckland-based company said in a statement. The hotelier gained a one-time insurance payment of $18.4 million in 2012 for its Copthorne Hotel destroyed by the Canterbury earthquake and $11.3 million in business interruption insurance. It had $4.2 million in earthquake insurance payments in 2013.
Millennium & Copthorne, 70-percent owned by the UK-based global hotel chain, has development interests in New Zealand, Australia and China. The company expects to detail plans to tap shareholders for $60 million in funds later this month to help fund further development in Chengdu, Sichuan Province, China, it said.
In 2013, the hotelier received $13.4 million from its 67 percent share of listed property development company CDL Investments New Zealand, and $9.8 million from its 34 percent stake in Chinese property development company First Sponsor Capital.
In Chengdu, First Sponsor in 2013 completed the commercial component of its Cityspring project, opened the first phase of the 196-room M Hotel Chengdu managed by the Millennium & Copthorne group, progressed sales of the Millennium Waterfront residential and auxiliary retail commercial units, and started construction of a Millennium-branded hotel with convention facilities.
In 2013, First Sponsor exited most of its investments in Guangdong province following a crisis in 2010 when former executive Cheung Ping Kwong was sacked after making unauthorised asset sales. The company is now looking at new property development opportunities in Dongguan, it said.
Meantime, Auckland-based CDL in 2013 increased its annual net profit 44 percent to $13.4 million, reflecting gains in its development portfolio. CDL sold 202 sections in 2013, up from 123 in 2012, 77 in 2011 and 54 in 2010. The value of its land increased 12 percent to $177.5 million.
Millennium & Copthorne will pay a dividend of 1.2 cents a share on May 16, compared with an ordinary dividend of 1.2 cents and a special dividend of 1.2 cents the year earlier. CDL increased its dividend per share to 2 cents from 1.7 cents the year earlier.
Shares in Millennium & Copthorne last traded at 66 cents on xx. CDL added 2 cents to 3.5 cents after one trade.