Mandarin Oriental Reports First Profit Since Q4 2019

(12 Nov 2021)  Mandarin Oriental issued its Interim Management Statement for Q3 2021 on Thursday.

The luxury hospitality company reported that overall trading conditions had improved towards the end of the second quarter and this trend continued into the third quarter. Performance, however, varied by market depending on government actions to curtail the spread of COVID19.

In Asia, most properties continued to rely on domestic business with international borders remaining effectively closed, and as a consequence both occupancy levels and ADR remained low.

Deluxe Premier Room at the Mandarin Oriental, Bangkok

The exception was the Chinese mainland, where operations continued to benefit from strong demand in a large domestic market.

By contrast, the operating environment in both Europe and America improved substantially, with results benefitting from the relaxation of travel and freedom of movement restrictions.

On 22 August 2021, the group opened its second hotel in Turkey, Mandarin Oriental Bosphorus, Istanbul.

As a result of the improving conditions, together with continued significant government support in some markets, the group recorded a marginal underlying profit (unaudited) in the third quarter, the first such positive performance since the fourth quarter of 2019.

The management business also recorded an underlying profit in the third quarter.

The group’s financial position remains robust. Net debt at 30 September 2021 was US$568 million and the group held US$162 million of cash reserves and US$296 million in available, committed debt facilities. Gearing was 11% of adjusted shareholders’ funds.

Mandarin Oriental is incorporated in Bermuda and has a primary listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore. It is a member of the Jardine Matheson Group.