The operator of the iconic Peninsula chain of hotels, the Hong Kong and Shanghai Hotels, reported an operating loss for its first quarter this year as the viral outbreak continues to undermine its business and the global tourism industry.
In its annual results filing with the Hong Kong Stock Exchange, the Chinese holdings company stated that an operating loss was inevitable despite its measures to limit costs. According to the company, its unaudited revenues for January and February were already down by 21 percent when compared to the same period during the previous year.
The managing director and chief executive officer of the Hong Kong and Shanghai Hotels, Clement Kwok, stated that the company is facing a very concerning situation given the continued spread of the novel coronavirus. He added that the epidemic has had a devastating impact on its business and China as a whole and it will likely be doing the same to the rest of the world.
In late February, the company did issue a profit warning to stakeholders, stating that it expected a drop in business throughout the first half of 2020. The company added that its net profits for the period will be significantly lower when compared to the previous year.
On Tuesday, the company posted its full-year results for 2019. The figures it reported were weak but had managed to beat initial analysts' expectations. For the entire year, the company reported revenues of HK$5.87 billion or roughly around $755.8 million. This was a 5 percent drop in its revenues when compared to the previous year. The drop was better than the initially forecasted revenue drop of 7.1 percent.
Net profits for 2019 fell by a massive 59 percent to HK$494 million. The figure was slightly better than the 68.4 percent fall initially forecasted by analysts. The company's flagship hotel in Hong Kong brought in the most revenue at around HK$1.1 billion for the entire year. The next largest contributor was its hotel in Tokyo, which brought in around HK$876 million.
In its filing, Kwok assured its shareholders and employees that they are doing everything they can to preserve as many jobs as possible. Kwok then expressed his gratitude for all of the company's employees throughout its hotels for their hard work and perseverance given the current situation.
According to the company, job security is currently one of its top priorities. As of last year, the company has around 7,500 people under its employment. Hong Kong and Shanghai Hotels currently has 10 Peninsula hotels, six in Asia, three in the United States, and one in Europe. The company is also in the process of establishing three new hotels in Yangon, Istanbul, and London.
