Tan Sri Dr Francis Yeoh

KUALA LUMPUR (Dec 6): YTL Corp Bhd managing director (MD) Tan Sri Dr Francis Yeoh, who witnessed the signing of agreements yesterday between its hospitality arm and US-based Marriott International Inc to build two new luxury hotels here, said he was unsure why the conglomerate’s share price was hovering near its eight-year low.

However, Francis, YTL’s largest shareholder via Yeoh Tiong Lay & Sons Holdings Sdn Bhd, said he may consider a share buy-back to bolster the stock price, though he declined to elaborate.

YTL shares slid one sen or 0.86% to RM1.15 yesterday, as the stock hovered near its eight-year low of RM1.14 on Nov 29. In the past 12 months, the stock has fallen 19.41%.

YTL Corp’s net profit slipped 5% to RM142.9 million in the first quarter ended Sept 30, 2017 (1QFY18) from RM150.33 million a year ago, as it paid more tax and booked higher sales and finance costs.

Taxation for the quarter rose 57% year-on-year (y-o-y) to RM130.53 million from RM83.15 million. Cost of sales grew 11% y-o-y to RM2.79 billion, while finance costs rose 37% y-o-y to RM419.92 million, its income statement filed with Bursa Malaysia showed.

Other operating income, which fell to RM57.31 million from RM65.83 million, also weighed on its performance. Quarterly revenue, however, grew 13% y-o-y to RM3.93 billion from RM3.49 billion.

Francis, meanwhile, maintains that YTL Corp would continue to focus on delivering long-term value to shareholders, as well as to continue offering memorable experiences for guests at its hotels.

This includes the future inclusion of its new hotels in the YTL Hospitality REIT portfolio, said Francis’ younger brother, Datuk Mark Yeoh, executive director of YTL Hotels & Properties Sdn Bhd, the group’s hospitality business.

The two brothers were speaking after the signing of management agreements between YTL Hotels & Properties, represented by Mark, and Marriott International, represented by its Asia Pacific president and MD Craig Smith.

The agreements pave the way for the design and development of two hotels, one under the JW Marriott brand in Kuala Lumpur Sentral, and the other being Malaysia’s first hotel under the Edition brand, near Kuala Lumpur City Centre.

The JW Marriott will occupy a five-acre land in KL Sentral, and the Edition on a site about an acre, said Mark. The design and approval of the hotels may take about 18 months, with construction likely to take another two to three years to complete, he added. The JW Marriott in KL Sentral may be completed in 2021, Mark said.

YTL Hotels & Properties also signed two memoranda of understanding with Marriott International yesterday to develop two other luxury hotels — the W Hotel and the Edition — in the former’s Niseko Village in Hokkaido, Japan.

According to Marriott International president and chief executive officer Arne Sorenson, also present at the ceremony, Marriott International is seeing the highest percentage growth of new hotels in Asia Pacific, supported by an increasingly sophisticated middle class.

Francis said YTL Corp’s 20-year relationship with Marriott International has been key to the former’s growth, with 11 Marriott hotels in YTL Hotels & Properties’ portfolio of 32 hospitality assets. YTL Hotels also relaunched the JW Marriott Kuala Lumpur yesterday after a year-long refurbishment.

This article first appeared in The Edge Financial Daily, on Dec 6, 2017.

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