Annual Report 2011 - Mandarin Oriental Hotel Group

More documents

Recommendations

Info

22 Mandarin Oriental International Limited Financial Review Continued Cash flow continued The Group’s total investment in the new Paris hotel was approximately US$75 million as outlined in the table below: Mandarin Oriental, Paris 2010 and before 2011 Total US$m US$m US$m Leasehold improvements and furniture & equipment Pre-opening expenses 35 25 60 (charged to profit and loss) 2 13 15 Total 37 38 75 In 2011, US$25 million was capitalized and US$13 million of pre-opening expenses were charged to profit and loss (and hence included in the cash flow under operating activities). Purchase of intangible assets includes amounts spent on computer software, leasehold improvements and other expenditure incurred in order to secure long-term management contracts. In 2011, the Group made US$1 million (2010: US$3 million) in aggregate of investments in, and loans to, associate hotels in The Americas. In 2011, the Group received US$3 million from the repayment of loans given to the owners of managed hotels in prior years. Conversely, in 2010, the Group provided US$3 million in respect of loans to owners of managed hotels. Dividends The Board is recommending a final dividend of US¢4.00 per share for a full-year dividend of US¢6.00 per share (2010: US¢5.00 per share). No scrip alternative is being offered in respect of the dividend. The final dividend is payable on 16th May 2012 to shareholders on the register of members at the close of business on 16th March 2012. Supplementary information Although the Group’s accounting policy in respect of its freehold land and buildings and the building component of owner-occupied leasehold properties is based on the cost model, the Directors continue to review their fair market values in conjunction with an independent appraiser on an annual basis. The fair market value of both freehold and leasehold land and buildings is used by the Group to calculate adjusted net assets, which the Directors believe gives important supplementary information regarding net asset value per share and gearing as outlined below: 2011 2010 Per share Per share US$m US$ US$m US$ Shareholders’ funds/net assets at amortized cost Add surplus for fair market value of freehold and leasehold 911 0.91 899 0.90 land and buildings Adjusted shareholders’ 1,781 1.79 1,416 1.43 funds/net assets 2,692 2.70 2,315 2.33 On IFRS basis, the Group’s consolidated net debt of US$113 million at 31st December 2011 was 12% of shareholders’ funds, compared with consolidated net debt of US$144 million at 31st December 2010 which was 16% of shareholders’ funds. Taking into account the fair market value of the Group’s interests in freehold and leasehold land, gearing was 4% of adjusted shareholders’ funds at 31st December 2011, compared with 6% at 31st December 2010.
Treasury activities The Group manages its exposure to financial risk using a variety of techniques and instruments. The main objective is to manage exchange and interest rate risks and to provide a degree of certainty in respect of costs. The Group has fixed or capped interest rates on 44% of its gross borrowings. In respect of specific hotel financing, borrowings are normally taken in the local currency to hedge partially the investment and the projected income. At 31st December 2011, the Group’s net assets were denominated in the following currencies: Adjusted Net assets net assets* US$m % US$m % Hong Kong dollar 2 – 1,494 55 United States dollar 485 53 525 20 United Kingdom sterling 99 11 164 6 Singapore dollar 44 5 130 5 Euro 99 11 116 4 Swiss franc 90 10 95 4 Thai baht 19 2 76 3 Others 73 8 92 3 911 100 2,692 100 * see supplementary information section on page 22 Included on the Group’s consolidated balance sheet is cash at bank of US$470.1 million (2010: US$433.5 million) which, after the deduction of US$1.0 million (2010: US$0.4 million) of bank overdraft facilities, is shown in the Group’s consolidated cash flow as cash and cash equivalents of US$469.1 million (2010: US$433.1 million). Annual Report 2011 23 The Group, excluding associates and joint ventures, had committed borrowing facilities totalling US$678 million, of which US$582 million was drawn at 31st December 2011. The principal amounts due for repayment are as follows: Facilities Facilities Unused committed drawn facilities US$m US$m US$m Within one year 4 4 – Between one and two years 11 9 2 Between two and three years 623 529 94 Between three and four years 34 34 – Between four and five years 2 2 – Beyond five years 4 4 – 678 582 96 At 31st December 2011, the Group had US$96 million of committed, undrawn facilities in addition to its net cash balances of US$469 million. The average tenor of the Group’s borrowings was 2.8 years (2010: 3.7 years). Principal risks and uncertainties A review of the principal risks and uncertainties facing the Group is set out on pages 82 to 83. Stuart Dickie Chief Financial Officer 1st March 2012
Page 1: Mandarin Oriental international lim
Page 4 and 5: 2 Mandarin Oriental International L
Page 12 and 13: 10 Mandarin Oriental International
Page 74 and 75:
72 Mandarin Oriental International
Page 76 and 77:
Five Year Summary Consolidated Prof
Page 78 and 79:
Corporate Governance Annual Report
Page 80 and 81:
Annual Report 2011 79 Senior execut
Page 82 and 83:
Annual Report 2011 81 Company in re
Page 84 and 85:
Annual Report 2011 83 Key agreement
Page 86 and 87:
Mandarin Oriental Hotel Group Conta
Page 88 and 89:
Mandarin Oriental, Prague Nebovidsk
Page 90:
Mandarin Oriental Hotel Group Reser
show all

Annual Report 2011 - Mandarin Oriental Hotel Group

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?