Millennium & Copthorne Hotels New Zealand lifted first half net operating profit 2.6 percent to $13.29 million, despite a 25.8 percent fall in revenue from ordinary activities.
The company today said that group revenue was primarily affected by a sharp fall in revenue for 65 percent-owned subsidiary CDL Investments, reflecting difficult property market conditions.
CDL's half year revenue from property sales and other income fell to $4.1m, from $20.3m a year earlier.
Millennium & Copthorne said its gross operating profit for the six months to the end of June fell to $38.7m from $49.5m.
Group revenue and other income was $76.9m from $95m, while revenue from ordinary activities was $65.5m.
Hotel operations in this country had traded within expectations, taking into account the closure of the Kingsgate Hotel Greenlane and the expiry of the lease for the Copthorne Hotel Wellington Plimmer Towers.
Total revenue for the New Zealand hotel operations -- 18 owned or leased and operated hotels excluding 13 franchised properties -- for the half year was $61.9m, down from $63.5m a year earlier.
Hotel occupancy for the period was 69.3 percent across the group.
Chairman Wong Hong Ren said that considering the sharp decline in revenue from CDL and a continuing decline in overseas visitor numbers from key markets, the half year result was acceptable.
Market conditions for the rest of 2008 were uncertain and difficult at all levels and management was reviewing all aspects of the company's operations to extract maximum gains while monitoring costs and remaining competitive, he said.
"At this stage, while the company believes that the year-end result will be profitable, shareholders are cautioned against expecting profits and dividends at levels seen in previous years as profitability and revenue depend on the company's ability to maintain market share."
Millennium & Copthorne shares closed at 54c on Monday, down from 84c a year ago.
