The 13 Hotel interior

South Shore losses rise 15pct y-on-y to HK$507 mln in Apr-Sept

South Shore reported losses attributable to owners of the company have risen 15 per cent year-on-year to some HK$507 million (US$64.7 million) in six months period finished on September 30 of this year, despite revenues going up 16 per cent year-on-year to HK$5.1 billion, a notice by the group at the Hong Kong Stock Exchange informed.

Such losses were attributted to an increase in finance costs, depreciation and amortization charges and hotel operation expenses for the hotel segment compared with last year.

This month South Shore announced that it had reached an agreement to dispose of a 50 per cent share in The 13 Hotel for HK$750 million, losing ownership of the property but maintaining a role in its management.

In its most recent financial report, the group reported that it reported some HK$5 billion in construction business expenses, plus HK$231.1 million in cost of sales and services on hotel, food & beverage and related services, which led to the reported losses in this period.

During this period the company held HK$4.5 billion in non-current assets – including HK$4.1 billion represented by the hotel segment assets, including the cost of land, the property itself, plus furniture, equipment and deposits paid – and HK$4.2 billion in current assets, however it also hed HK48.8 billion in current liabilities.

The 13 Hotel offically opened on August 31, 2018, although occupancy rate as been around 8 per cent according to previous company reports.

South Shore noted that the property has been accepting private events during September 2019, with the group conducting training exercises to maximize the service levels of the operational team, with the number of staff in the hotel segment approximately 209.

‘The 13 Hotel has been focusing on repositioning the business and operational model without gaming since obtaining the hotel licenses in August 2018. It is now poised to capitalize on its unique ultra-luxurious theme for the establishing of the brand and market penetration with a view to boosting occupancy and holding of special events in this financial year,’ South Shore stated.

Meanwhile, the group’s contracting division remained the core business and the major contributor of revenue, some HK$5.2 billion in the six months period, and showing a 19 per cent year-on-year rise.

‘Moving forward, the competition in the construction industry will remain severe. With a strong order book of nearly HK$40 billion on hand, we will take a proactive approach to minimize the effect of the economic downturn on our businesses and operation,’ the filing stated.