Positive result in a tough market for CDL Hotels

By Phil Boeyen, ShareChat Business News Editor

Monday 14th August 2000

CDL Hotels' half-year after-tax profit has jumped 63% compared with the same period last year but the company admits it's a tough market out there.

The company says its unaudited operating profit after tax to the end of June was $3.406 million. Total revenue fell from $82.1 million to $77.8 million, but the company says if sales receipts of residential units in Sydney are excluded from last year, total revenue actually showed a small increase.

CDL says its operations in New Zealand recorded a very positive first quarter, especially in Auckland as a result of the America's Cup.

The only dull spot in the national market is in Wellington, where both occupancy and room rates have been dropping. CDL says this is because of lower than expected international visitors, as well as the new Government's policy of discouraging the use of external advisors.

All three CDL brands -- Millennium, Copthorne, and Quality - recorded improved yields on 1999 levels, with the Millennium brand leading the field.

But the company says the second quarter this year saw an extremely competitive period as the oversupply of accommodation in all regions began to take effect.

While CDL is remaining positive about the medium and long-term growth prospects for the tourism sector both in Australia and New Zealand, it admits the short term operating environment for both the hotel and residential property market, particularly in Auckland, will remain very challenging.

The company says both its subsidiary investments - CDL Investments and Kingsgate International - also reported better after tax operating profits compared with the same time last year, and will continue to add to overall profitability.

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