INTERVIEW-S''pore''s Straits Trading hopes hotels will turn profitable in 2012 (2011/08/16 12:56PM)
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* Sees comparable H2 performance for resources division
* Expects S''pore office building to remain fully occupied in
next 12 mths
By Eveline Danubrata
SINGAPORE, Aug 16 (Reuters) - Singapore property and
resources group StraitsTrading''s loss-making hospitality
business could turn profitable by the second half of 2012 on the
back of strong tourism outlook and refurbishments across its
hotels such as its flagship Rendezvous Hotel, its executive
chairman said.
Chew GekKhim also told Reuters that Straits Trading''s
resources division, which reported a net profit of
S$13.9 million ($11.5 million) for the first six months of the
year, is expected to deliver a comparable performance in the
second half asunderlying global demand for tin remains strong.
The firm''s hospitality business reported a net loss of S$4
million for the second quarter. But as a whole, Straits
Trading''s net profit had tripled to S$49.3 million from a year
earlier, lifted byhigher tin prices, fair value gains in
investment properties and improved operating performance.
Straits Trading owns, leases and manages a total of 14
hotels in Singapore, Australia, China and New Zealand.
"The tourism outlook isbullish," Chew said, adding that if
all goes according to the plan, the hospitality segment could
turn profitable in the later part of next year.
"The plan is for the refurbishments to result in higher
RevPAR and occupancy, together withimproved systems," she said.
RevPAR refers to revenue per available room.
The firm recently invested around S$25 million to refurbish
its Rendezvous Hotel in Singapore, which is slated to be
completed in November. RevPAR for the hotel last yearwas S$158.
"We are fairly optimistic Rendezvous Singapore will benefit
well given its location and the strong pick-up in tourism," she
said.
In the first half ended June, tin mining and smelting
contributed around 85 percent to revenue ofS$769.5 million from
its business segments. Hotels constituted about 10 percent,
while the remaining was from property. At the end of June, the
company had cash and cash equivalents of around S$135 million.
Turning to the company''s StraitsTrading building in
Singapore''s prime office district, Chew said it currently enjoys
an occupancy rate of 100 percent and she is optimistic that it
will remain full in the next 12 months.
The asking rent as of July was in the range of S$11-S$12per
square foot and the tenants at the building were mostly law
firms and banks.
Straits Trading''s subsidiary Malaysia Smelting Corp
, which is dual-listed in Singapore and Kuala
Lumpur, operates two tin mines in theMalaysian state of Perak
and Indonesia''s Bangka Island. It also processes tin at its two
smelting plants in Penang and Bangka.
Tin prices had come off the record high of $33,600 per tonne
hit in April amid a weakening global economy, but Chewsaid the
underlying demand for tin, which is widely used for soldering in
the electronics industry, is still resilient.
($1 = 1.214 Singapore Dollars)
(Reporting by Eveline Danubrata; Editing by Saeed Azhar)
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Keywords: STRAITSTRADING/INTERVIEW
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