The Hongkong and Shanghai Hotels, Limited

Revenue from operations increased 8% year on year to HKD 3.5 billion, or HKD 3.9 billion including Peninsula London residential sales. EBITDA rose 20% to HKD 770 million, and profit attributable to shareholders improved to HKD 23 million from a loss of HKD 289 million in the prior-year period. Net cash generated from operating activities before working capital movements increased 22% to HKD 727 million; net debt-to-total assets was 22%, and consolidated net debt was HKD 11.9 billion. Management did not give next-quarter numerical guidance, but said second-half 2026 demand should remain positive, with hotels expected to benefit from continued travel recovery and resilient luxury demand, while commercial properties should see resilient residential leasing and improving office conditions in Hong Kong.

Christobelle Liao said the first half showed another step forward in recovery and growth, with top-tier demand remaining resilient despite an uneven travel backdrop. She emphasized that HSH is focusing on unlocking value from existing assets while shaping its future under Vision 2035: Perform and Transform, including more than HKD 2 billion of approved renovations at The Peninsula Hong Kong and The Peninsula Tokyo. Her tone was constructive but cautious, highlighting continued geopolitical uncertainty, currency volatility, cautious luxury retail spending and higher operating costs.

Keith Robertson walked through the financial improvement, citing revenue from operations of HKD 3.5 billion, EBITDA of HKD 770 million, and net cash from operations before working capital of HKD 727 million, up 22%. He noted EBITDA margin expansion from 13.6% to 21.8% since first half 2024, a lower weighted average gross interest rate of 3.7% from 3.9%, and average debt maturity of 1.7 years. Liquidity remained solid with HKD 1.9 billion of undrawn committed facilities, and the company continued preparations to refinance its HKD 6.5 billion club loan in the second half of 2026.

Management said the transform strategy is intentionally selective: new opportunities must meet financial, strategic and brand criteria, and transformation also means upgrading the existing portfolio, adopting technology and forming the right partnerships. On brand protection, they stressed choosing the right locations and partners and safeguarding both hardware and service standards. On The Peninsula London residences, Keith said 24 units exist, 4 remain for sale, and profitability is assessed case by case, with London still described as a difficult residential market. On The Repulse Bay, management called it a highly important asset because of its 97% occupancy, cash flow contribution and ongoing capital investment.