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Profit almost doubles for hotel owner

NZ NewswireNZ Newswire 3/08/2016

Millennium & Copthorne Hotels New Zealand, which owns a portfolio of hotels and a controlling stake in property developer CDL Investments, posted a 98 per cent jump in first-half profit as it benefited from the nation's tourism boom, strong sales from CDL and a one-time insurance gain. Its shares jumped 11 per cent.

Profit attributable to shareholders of the parent company almost doubled to $23.8 million in the six months ended June 30, from $12m a year earlier, the Auckland-based company said.

The results included a one-time gain of $4.3m from the final insurance settlement relating to the Millennium Hotel Christchurch, it said. Sales rose to $91m from about $70m.

Chairman Wong Hong Ren said the first-half results give the company confidence that it is heading for a stronger full year. In the first half, the occupancy rate at its leased and owned hotels rose to 82.3 per cent from 78.2 per cent a year earlier.

The company has been adding to its range of hotels and announced in June that it had taken a three-year lease over Auckland's Rendezvous Grand Auckland Hotel, to be renamed Grand Millennium Auckland Hotel, starting on Sept. 7.

The hotel's owner is a related party, CDL Hospitality Real Estate Investment Trust. The hotel is New Zealand's largest, with 452 guestrooms.

Government figures show overseas short-term visitor arrivals reached 3.31 million in the year ended June 30, up 11 per cent on the year earlier.

"As well as increased visitor arrivals and ongoing productivity improvements at our New Zealand hotels, our capital expenditure investments, revenue management initiatives and improvements to our overall costs of doing business all helped to deliver this strong half-year result", said managing director BK Chiu.

The results were also boosted by "continued strong sales" by CDL Investments and the one-time insurance gain, he said.

CDL Investments, which is 67 per cent owned by Millennium & Copthorne NZ, reported an 87 per cent jump in first-half profit to about $16m as sales climbed 79 per cent to $42.8m.

Millennium & Copthorne shares rose 20 cents to $2 and have gained 24 per cent this year. CDL's stock climbed 12 per cent to 75 cents.

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