Annual Report 2011 - Mandarin Oriental Hotel Group

20 Mandarin Oriental International Limited
Financial Review Continued
Subsidiaries continued
In Europe, London benefited from strong market
conditions and a significant increase in food and
beverage revenues from two new restaurants, leading to
a 28% increase in EBITDA, when compared to 2010.
Mandarin Oriental, Paris opened in June 2011 with
pre-opening expenses charged to profit and loss of
US$13 million. In the first six months of trading the
hotel achieved an average rate of close to €950, with
occupancy restricted by the full inventory of 138 rooms
only being available from late September onwards.
In Munich, strong demand resulted in EBITDA
increasing by 35% in 2011. In Geneva, a phased
rooms renovation and a strong Swiss Franc impacted
the hotel’s operating performance, although its
contribution, when converted into US dollars,
was similar to 2010.
In The Americas, the contribution from the
Washington D.C. hotel improved as a result of
an increase in RevPAR.
In 2011, the contribution from management activities
was US$32.7 million, an increase of US$14.6 million
compared to 2010. This increase principally relates to
US$16 million of branding fees received from the sale
of The Residences at Mandarin Oriental, London.
Depreciation and amortization expenses were
US$49.7 million for 2011, an increase of
US$5.1 million from 2010, the majority of
which is attributable to the new Paris hotel.
Associates and joint ventures
The Group’s share of results from associates and
joint ventures was as follows:
2011 2010
US$m US$m
EBITDA from associates
and joint ventures
Less depreciation and
32.7 26.9
amortization expenses (12.2 ) (11.1 )
Operating profit 20.5 15.8
Less net financing charges (6.3 ) (6.4 )
tax
Share of results of associates
(4.4 ) (5.1 )
and joint ventures 9.8 4.3
In total, the Group’s share of EBITDA from associates
and joint ventures increased by US$5.8 million or
22% to US$32.7 million in 2011.
In Singapore, the Group’s 50%-owned hotel benefited
from strong market conditions, improving its EBITDA
by 34% during the year. Although overall occupancy
levels improved in Bangkok in 2011, the extensive
floods in Thailand in the fourth quarter of the year
impacted the hotel’s performance, resulting in a full
year contribution in line with 2010. Kuala Lumpur’s
EBITDA was largely unchanged from 2010, in a highly
competitive market.
In The Americas, the New York hotel maintained
its competitive market position, achieving a modest
increase in EBITDA contribution. In Miami,
the hotel’s performance benefited from an increase
in citywide demand and a 19% increase in RevPAR,
leading to an improved EBITDA contribution.
Depreciation and amortization expenses from
associates and joint ventures were US$12.2 million,
up from US$11.1 million in 2010. The Group’s share
of net financing charges from associates and joint
ventures was US$6.3 million, largely in line with 2010.
The 2011 tax charge of US$4.4 million was
US$0.7 million lower than last year, primarily due
to the reversal of a tax asset in Bangkok which made
the tax charge higher in 2010.