News
Kingdom Hotel to seek $350m debt
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Kingdom Hotel Investments (KHI), an affiliate of Riyadh-based Kingdom Holding, aims to seek up to $350 million (Dh1.2 billion) in new debt by the end of this year, Chief Executive Sarmad Zok told Emirates Business in a telephone interview.
"We are in advanced stages of discussions with lenders and expect to raise the amount by the end of this year. It would be used to finance development of projects as well as strengthen capacity of Kingdom Hotel Investments," Zok said without divulging the names of the lenders involved.
The DIFX-listed KHI yesterday said it posted a net profit of $20.6m in the first half of this year, an increase of eight per cent, owing to diversification into high growth markets like Asia. KHI's net profit before non-recurring items for the period rose 50 per cent to $25.2m from $16.8m a year earlier.
When asked about the company's projections for the second-half, Zok said: "Based on trading trends, KHI continues to expect systemic revPAR [revenue per available room] growth in the mid-teens for 2008."
In a statement, the company said: "Reported net profit growth was impacted by non-recurring write-offs related to changes in certain capacity expansion projects; a gain on sale of KHI's investment in the Dubai Pearl development; and favourable restatements to 2007 profit and loss."
The company is also in the middle of cancelling some projects. For instance, KHI said it has decided not to go ahead with the sales of land that the company bought in Phang Nga in Thailand. It is also cancelling the residential component of a project in Da Nang, Vietnam.
Yet another project – Four Seasons hotel in Langkawi, Malaysia, – has been called off due to capacity expansion, cost escalation and overall market conditions, Zok said. He added that KHI continues with the ancillary real estate development at this property.
"All these cancellations are driven by causes such as creating additional capacity, capital allocation and portfolio management," Zok said, citing it as one of the benefits of a diversified portfolio.
"Also, by cancelling projects in Asia, which contributed a huge 43 per cent to our revenues, from nearly half last year, we will always have the flexibility of rationalising besides having better opportunities to deploy the capital – both within Asia and outside," he said.
Meanwhile, ancillary real estate sales have contributed significantly to KHI's revenues, said Zok.
"We have clearly established very strong results in our ancillary real estate business. It is delivering strong results," he said.
Listed on the Dubai International Financial Exchange and London Stock Exchange, KHI has ownership interests in 34 properties in 21 countries, including 23 operating hotels and resorts and 10 hotels and resorts under construction or in the initial stages of development.
The numbers
$20.6m: Profit in the first half of this year was posted by the company.
50%: Increase in net profit before non-recurring items to $25.2m.
43%: Of total revenue was contributed by projects in Asia.
"We are in advanced stages of discussions with lenders and expect to raise the amount by the end of this year. It would be used to finance development of projects as well as strengthen capacity of Kingdom Hotel Investments," Zok said without divulging the names of the lenders involved.
The DIFX-listed KHI yesterday said it posted a net profit of $20.6m in the first half of this year, an increase of eight per cent, owing to diversification into high growth markets like Asia. KHI's net profit before non-recurring items for the period rose 50 per cent to $25.2m from $16.8m a year earlier.
When asked about the company's projections for the second-half, Zok said: "Based on trading trends, KHI continues to expect systemic revPAR [revenue per available room] growth in the mid-teens for 2008."
In a statement, the company said: "Reported net profit growth was impacted by non-recurring write-offs related to changes in certain capacity expansion projects; a gain on sale of KHI's investment in the Dubai Pearl development; and favourable restatements to 2007 profit and loss."
The company is also in the middle of cancelling some projects. For instance, KHI said it has decided not to go ahead with the sales of land that the company bought in Phang Nga in Thailand. It is also cancelling the residential component of a project in Da Nang, Vietnam.
Yet another project – Four Seasons hotel in Langkawi, Malaysia, – has been called off due to capacity expansion, cost escalation and overall market conditions, Zok said. He added that KHI continues with the ancillary real estate development at this property.
"All these cancellations are driven by causes such as creating additional capacity, capital allocation and portfolio management," Zok said, citing it as one of the benefits of a diversified portfolio.
"Also, by cancelling projects in Asia, which contributed a huge 43 per cent to our revenues, from nearly half last year, we will always have the flexibility of rationalising besides having better opportunities to deploy the capital – both within Asia and outside," he said.
Meanwhile, ancillary real estate sales have contributed significantly to KHI's revenues, said Zok.
"We have clearly established very strong results in our ancillary real estate business. It is delivering strong results," he said.
Listed on the Dubai International Financial Exchange and London Stock Exchange, KHI has ownership interests in 34 properties in 21 countries, including 23 operating hotels and resorts and 10 hotels and resorts under construction or in the initial stages of development.
The numbers
$20.6m: Profit in the first half of this year was posted by the company.
50%: Increase in net profit before non-recurring items to $25.2m.
43%: Of total revenue was contributed by projects in Asia.