Zhitong Financial App News, REGAL INT'L (00078) announced that the Group is expected to make a net loss of approximately HK $763 million for the six months ended June 30, 2023 (mid-2023), and HK $138.3 million of attributable profit for the six-month period of the same period in 2022.
The loss in mid-2023 was mainly attributable to the substantial increase in financing costs as a result of the sharp rise in interest rates in Hong Kong, China, the fair value loss on the Group's financial assets and depreciation charges on the Group's hotel properties. Although the Group's hotel business in Hong Kong, China has improved steadily since the full resumption of customs clearance and the lifting of all epidemic prevention measures with mainland China at the beginning of this year, the overall revenue generated by the Group's hotel business in mid-2023 is still much lower than that in the same period in 2022, mainly due to the difference between the revenue structure and the six hotels under the Group's quarantine plan when they operated as quarantine hotels or facilities under the Hong Kong Government's quarantine plan. This is also the reason why the performance achieved in the half-year period is relatively inferior to that in the previous medium-term period.
In addition, as the Group's hotel properties in Hong Kong, China are owned and operated by the company's subsidiaries, depreciation charges are required to comply with applicable accounting standards. The total depreciation expense of the Group's hotel portfolio in Hong Kong in mid-2023 was approximately HK $299 million, which had no impact on cash flow but had a negative impact on medium-term results.
As supplementary information on the performance of the Group's core business, excluding changes in fair value and depreciation charges related to investment property and financial assets (which are non-cash items), the Group's net loss for the mid-2023 period will be stated as approximately HK $234 million.