Millennium & Copthorne first-half profit bolstered by CDL property developer
Millennium & Copthorne Hotels New Zealand eked out a 1.7 percent gain in first-half profit largely on a strong performance from the NZX-listed residential property developer CDL Investments, which the hotel operator controls.
The Auckland-based hotel operator's net profit attributable to equity holders rose to $31.8 million, or 15.32 cents per share, in the six months ended June 30, from $29.7 million, or 15.04 cents, a year earlier, it said in a statement. The company's hotel business posted an 18 percent decline in pre-tax earnings to $15.2 million on a 9.6 percent gain in revenue to $51.6 million, with the year-earlier period bolstered by an insurance payout.
That decline was more than offset by Millennium's CDL subsidiary, which separately reported a 28 percent gain in profit to $20.4 million on a 19 percent revenue gain to $51 million.
BK Chiu, managing director of both entities, said CDL had continued to attract demand in Auckland, Hamilton and Christchurch, where its major subdivision projects are situated, despite the traditional winter slowdown.
"Buyers and builders are more selective for well-constructed and located housing sections," Chiu said. "This underlying demand remains steady in Auckland and Hamilton where further sales are expected in the second half of 2017. These sales will contribute to another year of growth."
Millennium expects to open its M Social Auckland hotel in October and has started testing its services and recruiting staff.
The boards of both companies didn't declare any dividends, with Millennium and CDL's shareholder returns traditionally paid out once a year.
Millennium shares were unchanged at $2.78, having gained 12 percent so far this year. CDL shares last traded at 82 cents, up 14 percent since the start of the year.