SINGAPORE: Banyan Tree Holdings has booked a better-than-expected 55% jump in first-half net profit to S$24 million on solid revenue growth in its hotel operations.

First-half revenue rose 23 percent to S$188 million.

The strong figures were due mostly to higher revenue contributions from its hotel operations in Laguna Phuket resorts and Banyan Tree Lijiang in China.

But in the hotel residences segment, revenue slid 64% because of lower sales of high-margin hotel residences.

Banyan Tree says it remains optimistic about its future performance, citing a strong pipeline of new projects opening over the next two years.

It also expects steady contributions from its existing hotels to benefit its hotel investment and management segments.

Going forward, Banyan Tree is embarking on an ambitious expansion plan to increase the number of its hotels from 22 to some 60 by 2010.

That represents a compound annual growth rate of about 53%.

Most of these new hotels will be located in emerging markets such as China, the Americas and the Middle East.

About 60% of them would be managed by Banyan Tree rather than owned by it.

Ho Kwon Ping, executive chairman of Banyan Tree Holdings, said: "We would like to see a one-third dependence on each of the three sectors as follows: investment income, from our investment in hotel, resorts and so on; one third would be property-related income, the sale of unbranded and branded residences; and roughly one-third fee-based income......hotel management fees, design fees, spa gallery management fees and so on. To us, that hybrid model will give us three strong legs upon which we would like to grow Banyan Tree."

The new hotels will be funded mostly by Banyan Tree's US$600 million China Development Fund, as well as through debt instruments like medium-term notes.

Banyan Tree is also increasing its equity interest in Thailand's Laguna Resorts and Hotels to 65.75%, despite some initial difficulties.

Mr Ho said: "The rights issue has occurred. Banyan Tree is purely one of the shareholders of the Laguna Resort. All the other shareholders of Laguna Resort had an EGM, and the board concluded that Laguna Resort needed to fund all these additional projects, approved the rights issue, which was duly subscribed for. All the shares have been registered with the Ministry of Commerce. Trading in the enlarged share capital has in fact started."

Banyan Tree has also signed a Memorandum of Understanding to acquire prime land adjacent to Laguna Phuket, which could be used for residential, commercial or hotel use. - CNA/ir