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Australian accommodation giant Mantra (ASX: MTR) has recorded record revenue but its first half profit and earnings dropped on the back of sluggish performance in Hawaii, Perth and Melbourne.
As the Gold Coast-based company moves towards being taken over by French hotel group Accor, it reported record first half revenue to December 31, 2017, of $366.2 million which was an increase of $10.1 million or 2.8 per cent on the prior corresponding period.
But net profit after tax fell by 6.3 per cent to $27.6 million as it encountered "tougher than expected trading conditions in some regions".
"Sydney, Brisbane and Adelaide in the CBD segment benefited from positive sentiment in corporate travel while Queensland and New Zealand in the resorts segment continued to see strong growth in domestic and international travel," Mantra CEO Bob East says.
"By contrast, Hawaii and Perth were impacted by increased supply growth in the market while Melbourne has been impacted by a reduction in constrained demand also resulting from new supply."
Mantra did not issue earnings guidance because of its impending merger with Accor which has been delayed until the final quarter of FY18 from the original planned date in March. Prior to the takeover by Accor, Mantra had forecast FY18 underlying earnings of between $107 million and $115 million.
Australia's second largest hotel and resort and operator sold 1.97 million rooms in the first half of the financial year, which is the highest for that period, and increased available rooms by 2.6 per cent by buying 10 new properties including seven from the acquisition of the Art Series Hotel Group.
Bob East says that although the company's results are usually more heavily weighted to the first half of the year, the Gold Coast Commonwealth Games from April 4 to 14 is expected to drive results in the second half of the 2018 financial year.
"The second half of the financial year is off to a solid start. The Gold Coast 2018 Commonwealth Games will be the biggest event to happen in Australia this decade and the fact that 23 of Mantra Group's 136 hotels are located on the Coast means Mantra Group is well placed to drive results in the second half of FY2018," East says.
Mantra Group operates four major brands including Peppers, Art Series, Mantra and BreakFree and has a portfolio of 136 properties with more than 24,000 rooms across Australia, New Zealand, Indonesia and Hawaii.
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Business News Australia
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