Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

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FINANCIAL REVIEW CONTINUED
Cash flow
The Group’s consolidated cash flows are
summarized as follows:
MANDARIN ORIENTAL INTERNATIONAL LIMITED
2005 2004
US$m US$m
Operating activities 73 47
Investing activities:
• Capital expenditure on existing properties (28) (11)
•Mezzanine loan to Boston hotel (12) –
• Investment in Tokyo (12) –
•Proceeds on disposal of associates 95 –
•Washington D.C. investment – (30)
• Other – 13
Financing activities:
•Drawdown of borrowings 115 29
• Repayment of borrowings (117) (52)
• Dividend paid (10) –
• Other (1) 4
Net movement in cash in the year 103 –
The cash flows from operating activities increased
as performance improved from 2004 levels.
Capital expenditure on existing properties
totalled US$28 million as compared with
US$11 million in 2004. In 2005,US$7million
was included in relation to initial works for the
renovation at Mandarin Oriental, Hong Kong.
During the year, the Group advanced its
US$12 million mezzanine loan commitment
to the owners of the Boston hotel to assist in
financing of the construction of the hotel.The
Group also spent US$12 million in respect of its
investment in furniture and equipment for the
new Tokyo hotel, which it was required to fund
under the terms of the 30-year lease for the hotel.
In June 2005, the Group completed the sale of
its 40% investment in the partnership that leases
the Kahala Mandarin Oriental hotel in Hawaii
to its 60% partner, Kahala Royal Corporation.
On completion, the Group received a gross
consideration of US$97 million, which included
the repayment of loans to associates of
US$4 million.The post-tax gain on this
disposal was US$36 million.
Proceeds on disposal of associates of US$95 million
primarily relate to the Hawaii sale together with
US$2 million in relation to the Group’s July 2005
disposal of its investment in Reid Street Properties.
Under financing activities, the Group refinanced
the Washington D.C. hotel on favourable terms
with a new US$100 million five-year syndicated
loan facility. The Group also drew down
US$10 million in respect of a loan facility
established to finance the investment in the
Tokyo hotel.
During the year the Group repaid US$117 million
of bank borrowings, and paid a final dividend of
US$10 million in respect of 2004.
The total cash inflow for the year was
US$103 million.
Dividends
The Board is recommending a final dividend of
US¢1.50 per share (2004: US¢1.00 per share).
No scrip alternative is being offered in respect
of the dividend.