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COMMERCIAL PROPERTY | Staff Reporter, Singapore
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Banyan Tree posts worst loss in its history with $28.5m loss in FY15

Due to doubtful debts provisions, absent fair value gains.

Banyan Tree has crashed headlong into the red with what the company’s executive chairman calls “the worst loss” in Banyan Tree’s history. Provisions for doubtful debts and absent fair value gains on investment properties resulted to a $28.5m loss in FY15, and to an $18.4m loss in Q4.

According to the company’s media release, the steep fall was also due to tapered operating profit from hotel investments and fee-based segments, increased finance costs, and higher depreciation. This was partially buffered by raised operating profit from the property sales segment and lower head office expenses.

For FY15, the company saw a revenue $370.7m, which reflects a 13% YoY climb. This is thanks largely to higher contribution from the company’s property sales arm, though offset by reduced revenue from both its hotel and fee-based segments. Notwithstanding this, earnings before interest, tax, depreciation and amortisation (EBITDA) took a 39% dive to $31m.

“2015 was the perfect storm for the Banyan Tree Group. We started the year with great momentum in property sales and hotel bookings,” comments Banyan Tree’s executive chairman Ho Kwon Ping.

“But due to a confluence of factors, ranging from the devaluation of the Russian rouble to problems in many of our source markets as well as stoppages in hotel design projects affecting our fee based income, we posted the worst loss in our history,” he adds.

As the global economy turns increasingly sluggish, the company states it is intent on streamlining its business as well as relooking at its business structure to foster sustainable growth. 

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