Global Premium Hotels' profits fell 8.5% to $3.3m

Revenues also declined 6.3%.

Global Premium Hotels' 3Q16 results fail to surprise as they are within expectations, said OCBC Investment Research.

3Q16 revenue dipped 6.3% YoY to S$15.3m, or 26.3% of the research house's FY16 forecast.

This was mainly due to lower hotel room revenue recognised from most of the hotels, including certain hotels which had to close temporarily floor by floor to facilitate asset enhancement works.

The decrease was partially offset by additional contribution from hotels which were completed with asset enhancement works in FY15.

The group's average occupancy rate decreased 6.3 ppt from 3Q15 to 79.6% in 2Q16, which contributed to a 6.7% YoY decline in RevPAR to $83.5 this quarter.

Cost of sales increased 14.3% YoY due to higher hotel consumables expenses and guest meal charges.

Net profit dropped 8.5% YoY to S$3.3m, or 24.4% of OCBC Investment Research's full-year forecast, in line with the 8.7% YoY decline in gross profit.

"Given the hospitality sector's muted outlook, we see a lack of positive catalysts for GPH on the horizon," said OCBC Investment Research.

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