Global Premium Hotels suffers 8.7% profits drop

On back of lower revenue.

According to OCBC Investment Research, Global Premium Hotels' total revenue fell 5.4% YoY to S$13.8m and gross profit dipped 3.7% to S$12.1m. Net profit also fell 8.7% to S$4.0m.

Here's more:

1Q14 net profit constitutes 17.5% of our full-year estimate, which are in-line with expectations as we anticipate a back-loaded year from the second Parc Sovereign hotel‟s contributions in 2H14.

Due to competitive conditions in the hospitality sector, we continue to see pressure on the group‟s occupancy and room rates; average occupancy rate (AOR) decreased from 89.6% in 1Q13 to 86.0% in 1Q14 and revenue per available room (RevPar) also decreased from S$91.4 in 1Q13 to S$91.0 in 1Q14.