Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
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20<br />
FINANCIAL REVIEW<br />
A CCOUNTING POLICIES<br />
The Directors continue to review the<br />
appropriateness of the accounting policies<br />
adopted by the Group having regard to<br />
developments in <strong>International</strong> Financial<br />
Reporting Standards (‘IFRS’).The accounting<br />
policies adopted are consistent with those of<br />
the previous year.<br />
The Directors believe it is appropriate to provide<br />
supplementary information in addition to the<br />
financial statements prepared under IFRS, and<br />
this is presented separately in this review.<br />
RESULTS<br />
Overall<br />
The Group uses earnings before interest, tax,<br />
depreciation and amortization (‘EBITDA’) to<br />
analyse operating performance.Total EBITDA<br />
including the Group’s share of EBITDA from<br />
associates and joint ventures is shown below:<br />
MANDARIN ORIENTAL INTERNATIONAL LIMITED<br />
2005 2004<br />
US$m US$m<br />
Subsidiaries 91.0 74.6<br />
Associates and joint ventures 33.0 24.4<br />
Total EBITDA 124.0 99.0<br />
Subsidiaries<br />
2005 2004<br />
US$m US$m<br />
EBITDA 91.0 74.6<br />
Property revaluation movement – 0.2<br />
Less: depreciation and amortization (30.6) (31.4)<br />
Operating profit 60.4 43.4<br />
EBITDA from subsidiaries increased by 22% to<br />
US$91.0 million in 2005 from US$74.6 million<br />
in 2004.<br />
In Asia, results of both <strong>Mandarin</strong> <strong>Oriental</strong>, Hong<br />
Kong and The Excelsior benefited from increases<br />
in the average room rate of over 20%. <strong>Mandarin</strong><br />
<strong>Oriental</strong>,Tokyo opened in December 2005, with<br />
pre-opening expenses charged to the consolidated<br />
profit and loss account of US$10.7 million. Results<br />
at the Manila and Jakarta hotels remained depressed.<br />
In Europe, London continued to perform strongly<br />
and achieved the same occupancy as the previous<br />
year and a slightly improved rate despite the<br />
negative impact of the terrorist attacks in July.<br />
The performance of the Munich hotel was steady,<br />
remaining ahead of the competition in the city. In<br />
Geneva, there was some recovery in the market<br />
and improvements in occupancy and rate<br />
produced an increased Revenue Per Available<br />
Room (‘RevPAR’) of 15%.<br />
In The Americas, the Washington D.C. hotel,<br />
which opened in March 2004, contributed<br />
a positive EBITDA to the Group in 2005,<br />
compared with the previous year in which the<br />
hotel had significant pre-opening expenses and<br />
start-up losses.<br />
In 2005, the contribution from management<br />
activities was US$3.7 million (2004: US$4.7 million)<br />
as an increase in management fees was offset by<br />
higher corporate costs as the Group put into place<br />
additional resources to support its future growth.<br />
Depreciation and amortization was US$30.6 million<br />
for 2005 and was broadly in line with the 2004<br />
charge of US$31.4 million.