Beijing Capital Tourism Co, a hotel management and travel services provider, yesterday reported a better-than-expected 41 percent jump in full-year net profit, driven by the Olympics-related business boom and improved management and cost-cutting measures.
Its net profit climbed to 172 million yuan, or 0.75 yuan per share, on sales of 1.79 billion yuan, which were down a slight 1.5 percent from a year ago, the Shanghai-listed company said in its full-year earnings report.
The company, which also operates an exhibition business and develops tourism resorts, said the robust business during the Beijing 2008 Summer Olympics partly offset the negative impact on its business caused by the May 12 earthquake, the icy storm in south China at the beginning of last year and the current global financial crisis.
Shares of the tour operator yesterday jumped 9.97 percent, or the daily limit, to close at 16.32 yuan in Shanghai trading.
Its exhibition arm also reported better-than-expected revenues as it cashed in on the Olympics opportunities, the company said.
The soaring prices of food, expendables, energy and rising labor costs last year, the company said, have increased operating costs and hit profits.
"The estimate-beating results are mainly driven by the strong performance of its hotels during the Olympics," said Su Ping, a hospitality industry analyst at China Merchants Securities.
Average occupancy at its two hotels reached 90 percent during the one-month-long Olympic season, the company said.
"But it is virtually impossible for the company to deliver such strong performance this year as the hotel industry in Beijing has been heavily battered in the first two months and is unlikely to recover soon," Su said.
The tour operator, the analysts said, might face "great pressure" in delivering positive earnings growth this year as the travel industry suffers from the economic downturn.
The number of overseas visitors to China dropped 1.4 percent from a year earlier to 130 million in 2008, while revenue from the sector fell 2.6 percent to US$40.8 billion, according to the China National Tourism Administration.
Beijing Capital Tourism said it will focus on saving energy costs in its hotels and resorts this year.
The company declared a dividend of 3.6 yuan per 10 shares.
(China Daily March 19, 2009)