MANDARIN ORIENTAL INTERNATIONAL LIMITED
Preliminary Financial Statements
for the year ended 31st December 2023
Consolidated Profit and Loss Account
for the year ended 31st December 2023
2023 | 2022 | ||||||
Underlying | Underlying | ||||||
business | Non-trading | business | Non-trading | ||||
performance | items | Total | performance | items | Total | ||
Note | US$m | US$m | US$m | US$m | US$m | US$m | |
Revenue | 2 | 558.1 | - | 558.1 | 454.1 | - | 454.1 |
Cost of sales | (308.7) | - | (308.7) | (302.7) | - | (302.7) | |
Gross profit | 249.4 | - | 249.4 | 151.4 | - | 151.4 | |
Selling and distribution costs | (35.6) | - | (35.6) | (27.0) | - | (27.0) | |
Administration expenses | (116.7) | - | (116.7) | (109.2) | - | (109.2) | |
Other operating income/(expense) | 5.2 | (0.4) | 4.8 | 5.7 | - | 5.7 | |
Change in fair value of | |||||||
investment properties | 12 | - | (486.7) | (486.7) | - | (104.1) | (104.1) |
Gain on sale of | |||||||
a subsidiary/asset disposals | 8 | - | 43.8 | 43.8 | - | 40.6 | 40.6 |
Operating (loss)/profit | 3 | 102.3 | (443.3) | (341.0) | 20.9 | (63.5) | (42.6) |
Financing charges | (17.6) | - | (17.6) | (16.7) | - | (16.7) | |
Interest income | 7.7 | - | 7.7 | 2.3 | - | 2.3 | |
Net financing charges | 4 | (9.9) | - | (9.9) | (14.4) | - | (14.4) |
Share of results of associates | |||||||
and joint ventures | 5 | (0.3) | (0.6) | (0.9) | 9.7 | - | 9.7 |
(Loss)/profit before tax | 92.1 | (443.9) | (351.8) | 16.2 | (63.5) | (47.3) | |
Tax | 6 | (11.0) | (2.5) | (13.5) | (8.5) | 6.4 | (2.1) |
(Loss)/profit after tax | 81.1 | (446.4) | (365.3) | 7.7 | (57.1) | (49.4) | |
Attributable to: | |||||||
Shareholders of the Company | 7&8 | 81.0 | (446.4) | (365.4) | 7.6 | (57.1) | (49.5) |
Non-controlling interests | 0.1 | - | 0.1 | 0.1 | - | 0.1 | |
81.1 | (446.4) | (365.3) | 7.7 | (57.1) | (49.4) | ||
US¢ | US¢ | US¢ | US¢ | ||||
(Loss)/earnings per share | 7 | ||||||
- basic | 6.41 | (28.91) | 0.60 | (3.92) | |||
- diluted | 6.41 | (28.91) | 0.60 | (3.92) | |||
1
Consolidated Statement of Comprehensive Income
for the year ended 31st December 2023
2023 | 2022 | ||||
Note | US$m | US$m | |||
Loss for the year | (365.3) | (49.4) | |||
Other comprehensive expense | |||||
Items that will not be reclassified to profit or loss: | |||||
Remeasurements of defined benefit plans | 16 | (2.5) | (2.1) | ||
Revaluation surplus of right-of-use assets before transfer to investment properties | 11 | - | 79.8 | ||
Tax on items that will not be reclassified | 6 | 0.4 | 0.3 | ||
(2.1) | 78.0 | ||||
Items that may be reclassified subsequently to profit or loss: | |||||
Net exchange translation differences | |||||
- net gain/(loss) arising during the year | 34.0 | (58.2) | |||
- transfer to profit and loss | 33.5 | - | |||
Cash flow hedges | |||||
- net (loss)/gain arising during the year | (15.1) | 16.6 | |||
Tax relating to items that may be reclassified | 6 | 1.3 | (2.4) | ||
Share of other comprehensive income of associates and joint ventures | 0.4 | 0.7 | |||
54.1 | (43.3) | ||||
Other comprehensive income for the year, net of tax | 52.0 | 34.7 | |||
Total comprehensive expense for the year | (313.3) | (14.7) | |||
Attributable to: | |||||
Shareholders of the Company | (314.2) | (14.7) | |||
Non-controlling interests | 0.9 | - | |||
(313.3) | (14.7) | ||||
2
Consolidated Balance Sheet
at 31st December 2023
2023 | 2022 | ||
Note | US$m | US$m | |
Net assets | |||
Intangible assets | 9 | 43.7 | 45.7 |
Tangible assets | 10 | 618.6 | 916.3 |
Right-of-use assets | 11 | 229.1 | 242.4 |
Investment properties | 12 | 2,060.3 | 2,472.6 |
Associates and joint ventures | 13 | 155.8 | 203.8 |
Other investments | 14 | 14.0 | 14.0 |
Deferred tax assets | 15 | 14.0 | 14.2 |
Pension assets | 16 | 0.6 | 3.0 |
Non-current debtors | 17 | 10.9 | 12.2 |
Non-current assets | 3,147.0 | 3,924.2 | |
Stocks | 5.0 | 5.0 | |
Current debtors | 17 | 80.3 | 90.5 |
Current tax assets | 1.7 | 6.8 | |
Cash and bank balances | 18 | 178.8 | 226.2 |
265.8 | 328.5 | ||
Assets classified as held for sale | 19 | 331.9 | - |
Current assets | 597.7 | 328.5 | |
Current creditors | 20 | (158.0) | (159.1) |
Current borrowings | 21 | (414.9) | (2.2) |
Current lease liabilities | 22 | (5.8) | (5.9) |
Current tax liabilities | (22.1) | (18.4) | |
(600.8) | (185.6) | ||
Liabilities directly associated with assets classified as held for sale | 19 | (24.1) | - |
Current liabilities | (624.9) | (185.6) | |
Net current (liabilities)/assets | (27.2) | 142.9 | |
Long-term borrowings | 21 | (0.6) | (599.8) |
Non-current lease liabilities | 22 | (110.6) | (123.5) |
Deferred tax liabilities | 15 | (42.0) | (41.6) |
Pension liabilities | 16 | - | (0.1) |
Non-current creditors | 20 | (1.1) | (4.5) |
Non-current liabilities | (154.3) | (769.5) | |
2,965.5 | 3,297.6 | ||
Total equity | |||
Share capital | 24 | 63.2 | 63.2 |
Share premium | 25 | 500.9 | 500.7 |
Revenue and other reserves | 2,396.3 | 2,730.2 | |
Shareholders' funds | 2,960.4 | 3,294.1 | |
Non-controlling interests | 5.1 | 3.5 | |
2,965.5 | 3,297.6 | ||
Approved by the Board of Directors
Laurent Kleitman
Matthew Bishop
Directors
7th March 2024
3
Consolidated Statement of Changes in Equity
for the year ended 31st December 2023
Asset | Attributable to | Attributable to | Total | |||||||
Share | Share | Capital | Revenue | revaluation | Hedging | Exchange | shareholders of | non-controlling | ||
equity | ||||||||||
capital | premium | reserves | reserves | reserves | reserves | reserves | the Company | interests | ||
US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | US$m | |
2023 | ||||||||||
At 1st January | 63.2 | 500.7 | 258.9 | (428.8) | 3,023.2 | 15.4 | (138.5) | 3,294.1 | 3.5 | 3,297.6 |
Total comprehensive | ||||||||||
income | - | - | - | (367.6) | - | (13.7) | 67.1 | (314.2) | 0.9 | (313.3) |
Dividends paid by | ||||||||||
the Company | - | - | - | (19.0) | - | - | - | (19.0) | - | (19.0) |
Unclaimed dividend | ||||||||||
forfeited | - | - | - | 0.1 | - | - | - | 0.1 | - | 0.1 |
Subsidiary | ||||||||||
disposed of | - | - | 0.2 | (0.6) | - | (0.2) | (0.6) | 0.7 | 0.1 | |
Transfer | - | 0.2 | (0.2) | - | - | - | - | - | - | - |
At 31st December | 63.2 | 500.9 | 258.9 | (815.9) | 3,023.2 | 1.7 | (71.6) | 2,960.4 | 5.1 | 2,965.5 |
2022 | ||||||||||
At 1st January | 63.2 | 500.5 | 259.1 | (377.7) | 2,943.4 | 0.9 | (80.6) | 3,308.8 | 3.5 | 3,312.3 |
Total comprehensive | ||||||||||
income | - | - | - | (51.1) | 79.8 | 14.5 | (57.9) | (14.7) | - | (14.7) |
Transfer | - | 0.2 | (0.2) | - | - | - | - | - | - | - |
At 31st December | 63.2 | 500.7 | 258.9 | (428.8) | 3,023.2 | 15.4 | (138.5) | 3,294.1 | 3.5 | 3,297.6 |
Revenue reserves as at 31st December 2023 included cumulative fair value losses on the investment property under development of US$1,207.8 million (2022: US$720.2 million).
4
Consolidated Cash Flow Statement
for the year ended 31st December 2023
2023 | 2022 | ||
Note | US$m | US$m | |
Operating activities | |||
Operating loss | 3 | (341.0) | (42.6) |
Depreciation, amortisation and impairment | 51.1 | 58.2 | |
Other non-cash items | 28a | 440.3 | 63.5 |
Movements in working capital | 28b | (2.8) | (1.1) |
Interest received | 8.5 | 2.1 | |
Interest and other financing charges paid | (17.6) | (15.6) | |
Tax paid | (2.6) | (8.0) | |
135.9 | 56.5 | ||
Dividends and interest from associates and joint venture | 5.3 | - | |
Cash flows from operating activities | 141.2 | 56.5 | |
Investing activities |
Purchase of tangible assets | |
Additions to investment properties | |
Purchase of intangible assets | |
Additions to right-of-use assets | |
Refund on Munich expansion | 28c |
Purchase of other investments | |
Purchase of an associate | 28d |
Advance to associates and joint ventures | 28e |
Repayment of loans to associates and joint ventures | 28f |
Sale of a subsidiary | 28g |
Net proceeds from asset disposals | 8 |
Cash flows from investing activities | |
Financing activities |
(13.7) | (12.8) |
(71.0) | (30.2) |
(6.4) | (6.1) |
- (0.2)
- 4.0
(0.1)(0.2)
- (1.0)
(20.7)(2.4)
67.24.2
75.6-
- 131.4
30.986.7
Drawdown of borrowings | 21 | 58.1 | 23.0 |
Repayment of borrowings | 21 | (247.9) | (139.5) |
Principal elements of lease payments | 28h | (6.2) | (5.7) |
Dvidends paid by the Company | 27 | (19.0) | - |
Cash flows from financing activities | (215.0) | (122.2) | |
Net (decrease)/increase in cash and cash equivalents | (42.9) | 21.0 | |
Cash and cash equivalents at 1st January | 226.2 | 212.8 | |
Effect of exchange rate changes | 7.0 | (7.6) | |
Cash and cash equivalents at 31st December | 28i | 190.3 | 226.2 |
5
Notes to the Financial Statements
General information
Mandarin Oriental International Limited (the 'Company') is incorporated in Bermuda and has a primary listing in the standard segment of the London Stock Exchange, with secondary listings in Bermuda and Singapore.
1 Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS'), including International Accounting Standards ('IAS') and Interpretations as issued by the International Accounting Standards Board ('IASB').
At 31st December 2023, the current liabilities of the Group exceeded its current assets by US$27.2 million. Included in the current liabilities were the current portion of long-term bank loans of US$414.9 million due to mature within 2024. In February 2024, the Group has refinanced bank facilities of US$409.2 million to enable the Group to meet its obligations as and when they fall due. Accordingly, the financial statements have been prepared on a going concern basis.
The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies.
Details of the Group's material accounting policies are included in note 34.
The Group has adopted the following standard and amendments for the annual reporting period commencing 1st January 2023.
IFRS 17 'Insurance Contracts' (effective from 1st January 2023)
The standard covers recognition, measurement, presentation and disclosure for insurance contracts. The Group has assessed its performance guarantees provided to third-party hotel owners and concluded that current arrangements do not include significant insurance risk. They remain within the scope of the Group's existing revenue recognition accounting policies.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 (effective from 1st January 2023) The amendments require entities to disclose material rather than significant accounting policies. The amendments define what is 'material accounting policy information' and explain how to identify when accounting policy information is material.
Material accounting policy information is information that, when considered together with other information included in an entity's financial statements, can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. IASB further clarifies that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure material accounting information. To support this amendment, the IASB also amended IFRS Practice Statement 2 Making Materiality Judgements to provide guidance on how to apply the concept of materiality to accounting policy disclosures.
The material accounting policies following the adoption of IAS 1 are included in note 34.
Amendment to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective from 1st January 2023)
The amendment requires deferred tax to be recognised on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They typically apply to transactions such as leases of lessees and decommissioning obligations and require the recognition of additional deferred tax assets and liabilities. On adoption of the amendment, there is no impact on the Group's consolidated financial statements.
Amendment to IAS 12 - International Tax Reform - Pillar Two Model Rules (effective for annual reporting period commencing on or after 1st January 2023)
The amendment provides a temporary mandatory exception from deferred tax accounting in respect of Pillar Two income taxes and certain additional disclosure requirements. The Group is within the scope of the OECD Pillar Two model rules, and has applied the amendment from 1st January 2023.
Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions in which the Group operates. The legislation will be effective for the Group's annual reporting period commencing 1st January 2024. Since the Pillar Two legislation was not effective at 31st December 2023, the Group has no related current tax exposure.
6
Notes to the Financial Statements Continued
1 Basis of preparation continued
The Group is in scope of the enacted or substantively enacted legislation and has performed an assessment of the Group's potential exposure to Pillar Two incomes taxes when the legislation comes into effect. The assessment of the potential exposure to Pillar Two income taxes is based on the latest financial information for the year ended 31st December 2023 of the constituent entities in the Group. Based on the assessment, the effective tax rates in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of jurisdictions where the effective tax rate is slightly below or close to 15%. The Group does not expect a material exposure to Pillar Two income taxes in those jurisdictions.
Apart from the above, there are no other standard or amendments which are effective in 2023 and relevant to the Group's operations, that have a significant impact on the Group's results, financial position and accounting policies.
The | Group has not early adopted any standard, interpretation or amendments that have been issued but not yet effective |
(refer note 35). | |
The | principal operating subsidiaries, associates and joint ventures have different functional currencies inl ine with the |
economic environments of the locations in which they operate. The functional currency of the Company is United States dollars. The consolidated financial statements are presented inU nited States dollars.
The Group's reportable segments are set out in note 2.
2 Segmental information and revenue
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed
by the Executive Directors of the Company for the purpose of resource allocation and performance assessment. The Group has three (2022: three) distinct business activities: Hotel ownership, Hotel & Residences branding and management, and Property development which form the basis of its operating and reportable segments. The Property development segment represents the redevelopment of The Excelsior, Hong Kong as a commercial building following the closure of the hotel on 31st March 2019 (the 'Causeway Bay site under development'). The redevelopment is expected to complete in 2025.
In addition, The Group is operated on a worldwide basis in three (2022: three) regions: Asia, Europe, the Middle East and Africa ('EMEA'), and America. The Group's segmental information for non-current assets is set out in note 23.
2023 | 2022 |
US$m | US$m |
Analysis by business activity
Hotel ownership
Hotel & Residences branding and management
Less: intra-segment revenue
Analysis by geographical area
Asia
EMEA
America
From contracts with customers
Recognised at a point in time
Recognised over time
From other sources
Rental income
486.8400.9
94.568.5
(23.2)(15.3)
558.1454.1
219.9141.4
288.6239.7
- 73.0
- 454.1
- 140.8
375.8295.2
539.5436.0
18.618.1
558.1454.1
7
2 Segmental information and revenue continued
Contract balances
Setup costs in order to secure long-term hotel management contracts are capitalised under intangible assets and amortised in profit and loss when the related revenue is recognised. Management reviews the capitalised costs on a regular basis and expects the setup costs to be recoverable.
Contract liabilities primarily relate to the advance consideration received from customers relating to gift cards and advance customer deposits for hotel services.
Contract liabilities are further analysed as follows:
2023 | 2022 | |
US$m | US$m | |
Contract liabilities (refer note 20) | ||
- gift cards | 10.1 | 10.9 |
- advance customer deposits and other | 9.8 | 7.7 |
19.9 | 18.6 | |
Revenue recognised in relation to contract liabilities
Revenue recognised in the current year relating to carried-forward contract liabilities:
2023 | 2022 | |
US$m | US$m | |
Gift cards | 6.4 | 10.8 |
Advance customer deposits and other | 5.5 | 9.6 |
11.9 | 20.4 | |
Revenue expected to be recognised on unsatisfied contracts with customers
Timing of revenue to be recognised on unsatisfied performance obligations:
Advance | |||
customer | |||
Gift | deposits | ||
cards | and other | Total | |
US$m | US$m | US$m | |
2023 | |||
Within one year | 3.9 | 16.8 | 20.7 |
Between one and two years | 4.2 | - | 4.2 |
Between two and three years | 1.3 | - | 1.3 |
Between three and four years | 0.5 | - | 0.5 |
Between four and five years | 0.2 | - | 0.2 |
10.1 | 16.8 | 26.9 | |
2022 | |||
Within one year | 4.2 | 9.6 | 13.8 |
Between one and two years | 4.5 | - | 4.5 |
Between two and three years | 1.4 | - | 1.4 |
Between three and four years | 0.6 | - | 0.6 |
Between four and five years | 0.2 | - | 0.2 |
10.9 | 9.6 | 20.5 | |
8
Notes to the Financial Statements Continued
3 EBITDA (earnings before interest, tax, depreciation and amortisation) and operating loss from subsidiaries
2023 | 2022 | |
US$m | US$m | |
Analysis by business activity | ||
Hotel ownership | 101.9 | 45.3 |
Hotel & Residences branding and management | 52.5 | 33.8 |
Property development | (1.0) | - |
Underlying EBITDA from subsidiaries | 153.4 | 79.1 |
Non-trading items (refer note 8) | ||
- change in fair value of investment properties | (486.7) | (104.1) |
- change in fair value of other investments | (0.4) | - |
- gain on sale of a subsidiary/asset disposals | 43.8 | 40.6 |
(443.3) | (63.5) | |
EBITDA from subsidiaries | (289.9) | 15.6 |
Underlying depreciation and amortisation from subsidiaries | (51.1) | (58.2) |
Operating loss | (341.0) | (42.6) |
Analysis by business activity | ||
Hotel ownership | 145.4 | 85.9 |
Hotel & Residences branding and management | 52.4 | 33.8 |
Property development | (487.7) | (104.1) |
EBITDA from subsidiaries | (289.9) | 15.6 |
Hotel ownership | 102.4 | 36.7 |
Hotel & Residences branding and management | 44.3 | 24.8 |
Property development | (487.7) | (104.1) |
Operating loss | (341.0) | (42.6) |
Analysis by geographical area | ||
Asia | 41.5 | (8.7) |
EMEA | 108.5 | 82.8 |
America | 3.4 | 5.0 |
Underlying EBITDA from subsidiaries | 153.4 | 79.1 |
9
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Mandarin Oriental International Ltd. published this content on 06 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2024 12:29:09 UTC.