Shangri-La Hotels’ net loss widens in 2H on sharp downturn amid ongoing restrictions

by NUR HAZIQAH A MALEK / Pic credit:

SHANGRI-LA Hotels (M) Bhd has widened its net loss to RM39.67 million for its first half ended June 30, 2021 (1H21), compared to a net loss of RM27.05 million in the same period last year, due to impacts from Covid-19 movement restrictions.

1H21 revenue fell by 56.3% to RM43.04 million from RM98.42 million a year ago, as operations were weighed down by ongoing travel restrictions, tight border controls and lockdowns.

“The situation was further aggravated by a surge in Covid-19 infections domestically, prompting the reinstatement of stringent pandemic-related business restrictions and containment measures which significantly reduced rooms and food and beverages business at the group’s hotels,” the company said in an exchange filing today.

For instance, revenue for Shangri-La Hotel Kuala Lumpur fell 53% to RM12.03 million for the first six months this year.

The hotel turned in a pre-tax loss of RM19.24 million, against a net loss of RM18.24 million for the same Jan-June period last year.

Its occupancy rate was 7%, versus 18% a year ago.

Regardless, the group has narrowed its net loss for its second quarter ended June 30, 2021 (2Q21), to RM20.10 million, compared to a net loss of RM29.08 million in 2020.

2Q21 revenue grew 104.3% to RM20.33 million from RM9.95 million a year ago, despite being weighed down by a decline in revenue contributions from its resorts in Penang, the slowdown in domestic demand and economic activity.

The group’s hotel operations are expected to remain very challenging and volatile in 2H21, amid a spike in cases from the more contagious Covid-19 variant.

“The ongoing repercussions of Covid-19 on international and domestic travel alongside the reintroduction of significant containment and restrictive measures both globally and domestically to contain fresh waves of cases will have a further dampening effect on the group’s hotels operating performances.

“The group’s investment properties in Kuala Lumpur are expected to face continued lacklustre trading conditions through 2021, given the prevailing weak economic climate and business sentiments,” it said.

Shangri-La Hotels shares ended 0.56% higher today to RM3.60, valuing the company RM1.58 billion.