To:

Business Editor

26th July 2018
For immediate release

The following announcement was issued today to a Regulatory Information Service approvedby the Financial Conduct Authority in the United Kingdom.
MANDARIN ORIENTAL INTERNATIONAL LIMITEDHALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2018
Highlights
 Underlying profit 49% higher due to improved performances across portfolio
 Five new management contracts signed
 Strategic review of The Excelsior, Hong Kong ongoing“Underlying profit was higher during the first half of the year due to generally improved
performances across the portfolio, notably in Hong Kong. This positive trend is expected tocontinue in the second half of the year. The Group is working towards an anticipated partial
reopening of Mandarin Oriental Hyde Park, London in the fourth quarter of this year.”
Ben Keswick
Chairman

Results

Combined total revenue of hotels under management(1)Underlying EBITDA (Earnings before interest, tax,
depreciation and amortisation)(2)Underlying profit attributable to shareholders(3)Profit attributable to shareholders
Underlying earnings per share(3)Earnings per share
Interim dividend per share
Net asset value per share(4)Adjusted net asset value per share(4)(5)
Net debt/shareholders’ funds(4)Net debt/adjusted shareholders’ funds(4)(5)(unaudited)
Six months ended 30th June
2018
2017
US$m
US$m
644.8
700.2
79.6
22.3
22.3
US¢
1.77
1.77
1.50
US$
0.99
4.54
26%
6%

61.5
15.0
15.0
US¢
1.19
1.19
1.50
US$
1.01
4.57
26%
6%

Change
%
+9
+29
+49
+49
%
+49
+49
%
–2
–1

(1) Combined revenue includes turnover of the Group’s subsidiary hotels in addition to 100% of revenue from associate,joint venture and managed hotels.
(2) EBITDA of subsidiaries plus the Group’s share of EBITDA of associates and joint ventures.
(3) The Group uses ‘underlying profit’ in its internal financial reporting to distinguish between ongoing businessperformance and non-trading items, as more fully described in note 7 to the condensed financial statements.
Management considers this to be a key measure which provides additional information to enhance understanding of
the Group’s underlying business performance.
(4) At 30th June 2018 and 31st December 2017, respectively.
(5) The Group’s freehold and leasehold interests are carried in the consolidated balance sheet at amortised cost. Both theadjusted net asset value per share and net debt/adjusted shareholders’ funds for 30th June 2018 and 31st December
2017 have been adjusted to include the market value of the Group’s freehold and leasehold interests which wereappraised as at 31st December 2017.
The interim dividend of US¢1.50 per share will be payable on 10th October 2018 to shareholders on the register of members
at the close of business on 17th August 2018.

- more -Page 2
MANDARIN ORIENTAL INTERNATIONAL LIMITEDHALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2018
OVERVIEW
Underlying profit was higher during the first half of the year due to generally improved
performances across the Group’s portfolio, notably in Hong Kong. Results were, however,
impacted by the commencement of the restoration of Hotel Ritz, Madrid.
The Group is working with its insurers to assess the impact of the fire at Mandarin Oriental
Hyde Park, London in June.
Strategic options for The Excelsior, Hong Kong, including the possible redevelopment of thesite into a commercial building, remain under consideration.
FINANCIAL PERFORMANCE
Underlying earnings before interest, tax, depreciation and amortisation for the first six monthsof 2018 were US$80 million, up from US$62 million in the first half of 2017. These results
include an early termination fee in respect of the cessation of the Group’s management of theLas Vegas hotel from the end of August 2018.
Underlying profit for the period was US$22 million, compared with US$15 million in theequivalent period in 2017. Underlying earnings per share were US¢1.77, up from US¢1.19 in2017. The Group’s US$20 million estimate of a write-off of tangible assets in relation to the
London fire has been offset by insurance claims recoverable.
In light of the ongoing programme of renovations, an interim dividend of US¢1.50 per sharehas been declared, unchanged from last year.
At 30th June 2018, the Group’s net debt was US$325 million, compared to US$327 million at
the end of 2017. Gearing as a percentage of adjusted shareholders’ funds at 30th June 2018
was 6%, in line with that reported at the end of 2017.

- more -Page 3
HOTEL PERFORMANCE
Results were higher during the first half of the year due to improved performances acrossmost of the portfolio, particularly from Hong Kong, Singapore, Bangkok and Tokyo. There
were also signs of recovery in Paris after several years of weak demand. In The Americas,
there were weaker performances in Boston and in Washington D.C. compared with the same
period last year, with the latter having benefited from the Presidential Inauguration in 2017.
Overall results were impacted by the closure of Hotel Ritz, Madrid in February 2018 for acomprehensive 19-month restoration.
Mandarin Oriental Hyde Park, London has closed for the necessary repairs but it is anticipatedthat the hotel will be able to partially reopen in the fourth quarter of this year. The impact of
the fire is being assessed by insurers with the estimate of a write-off of tangible assets offset
by insurance claims recoverable.

Given the coverage under the Group’s insurance

arrangements, the impact on the Group’s profitability is expected to be modest. We would
like to express our appreciation for the efforts of all our colleagues in dealing with what werevery difficult circumstances.
STRATEGIC REVIEW OF THE EXCELSIOR, HONG KONG
In June 2017, the Group announced that consideration was being given to potential strategic
options for The Excelsior, Hong Kong. The Group is still considering all options for the site,
including possible redevelopment as a commercial property.
NEW DEVELOPMENTS
In addition to the hotel in Viña del Mar, Chile and residences in Barcelona mentioned at thetime of the Group’s preliminary results, three other new management contracts have beensigned in the first six months of the year. A new hotel in Ho Chi Minh City, the Group’s first
property in Vietnam, is scheduled to open in 2020. Two new properties, both with branded
residences, in Muscat, Oman and Grand Cayman, will follow in 2021.
In the next 12 months, the Group expects to open its first hotels in Beijing, Doha and Dubai,
as well as The Residences at Mandarin Oriental in Bangkok.

- more -Page 4PEOPLEDr Richard Lee and Lord Powell of Bayswater stepped down as Directors on 9th May 2018.
We would like to thank them both for their significant contributions to the Company overmany years. We would also like to welcome Jack Yilun Chen, who has joined the Board.
As announced earlier this week, Stuart Dickie is to step down as Chief Financial Officer on
31st October 2018 and will be succeeded by Craig Beattie. We would like to thank Stuart forhis major contribution to the Group’s development.
OUTLOOK
Underlying profit was higher during the first half of the year due to generally improved
performances across the portfolio, notably in Hong Kong. This positive trend is expected tocontinue in the second half of the year. The Group is working towards an anticipated partial
reopening of Mandarin Oriental Hyde Park, London in the fourth quarter of this year.

Ben Keswick
Chairman- more -Page 5Mandarin Oriental International Limited
Consolidated Profit and Loss Account(unaudited)
Six months ended 30th June

Total
US$m

Underlying
business
performance
US$m

Total
US$m

-

307.9
(195.8)112.1(19.9)(60.2)
3.3
35.3

286.7
(189.1)
97.6(19.8)(55.3)
22.5

-

286.7
(189.1)
97.6(19.8)(55.3)
22.5

610.8(389.7)221.1(38.2)(113.9)
69.0

-

610.8
(389.7)221.1(38.2)(113.9)
69.0

(6.7)
0.8

-

(6.7)
0.8

(6.2)
0.6

-

(6.2)
0.6

(12.3)
1.3-(12.3)
1.3

(5.9)

-

(5.9)

(5.6)

-

(5.6)

(11.0)-(11.0)

1.3
30.7
(8.4)
22.3

-

1.3
30.7
(8.4)
22.3

3.0
19.9
(4.7)
15.2

-

3.0
19.9
(4.7)
15.2

11.5
69.5
(15.0)
54.5

-

11.5
69.5
(15.0)
54.5

22.3
22.3

-

22.3
22.3

15.0
0.2
15.2

-

15.0
0.2
15.2

54.9
(0.4)
54.5

-

54.9
(0.4)
54.5

US¢

US¢

US¢

US¢

US¢

US¢

1.77
1.77

1.77
1.77

1.19
1.19

1.19
1.19

4.37
4.35

4.37
4.35

Underlying
business
performance
US$m

307.9
(195.8)112.1(19.9)(60.2)
3.3
35.3

Financing charges
Interest income
Net financing charges
Share of results of associates
and joint ventures (note 4)
Profit before tax
Tax (note 5)
Profit after tax
Attributable to:Shareholders of the Company
Non-controlling interests

Revenue (note 2)
Cost of sales
Gross profit
Selling and distribution costs
Administration expenses
Other operating income
Operating profit (note 3)

Earnings per share (note 6)- basic- diluted

Year ended 31st December
2017
Underlying
Non-tradingbusiness
Items
Total
performance(note 7)
US$m
US$m
US$m

2017
Non-trading
Items(note 7)US$m

2018
Non-trading
Items(note 7)US$m

- more -Page 6

Mandarin Oriental International Limited
Consolidated Statement of Comprehensive Income(unaudited)
Six months ended
30th June
2017
2018
US$m
US$m

Year ended
31st
December
2017
US$m

22.3

15.2

54.5

0.2
-

-

7.7
(1.2)

0.2

-

6.5

(28.8)

61.6

87.1

1.6
(0.3)

(0.5)
0.1

0.8
(0.2)

(1.6)

4.6

8.4

(29.1)

65.8

96.1

Other comprehensive (expense)/income for theperiod, net of tax(28.9)

65.8

102.6

Total comprehensive (expense)/income for theperiod

(6.6)

81.0

157.1

Attributable to:Shareholders of the Company
Non-controlling interests

(6.4)
(0.2)

80.6
0.4

157.3
(0.2)

(6.6)

81.0

157.1

Profit for the period
Other comprehensive (expense)/income
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans
Tax on items that will not be reclassified
Items that may be reclassified subsequently to
profit or loss:
Net exchange translation differences- net (losses)/gains arising during the period
Cash flow hedges- net gains/(losses) arising during the period
Tax relating to items that may be reclassified
Share of other comprehensive (expense)/incomeof associates and joint ventures- more -Page 7

Mandarin Oriental International Limited
Consolidated Balance Sheet(unaudited)
At 30th June
2017
2018
US$m
US$m

At 31stDecember
2017
US$m

Net assets
Intangible assets
Tangible assets
Associates and joint ventures
Other investments
Deferred tax assets
Pension assets
Other non-current assets

47.8
1,409.2
194.7
11.1
10.7
4.2
1.7

44.5
1,416.0
176.6
10.7
2.2
-

47.7
1,453.2
196.6
11.0
11.0
4.9
0.5

Non-current assets

1,679.4

1,650.0

1,724.9

Stocks
Debtors and prepayments
Current tax assets
Bank and cash balances

6.2
112.8
3.2
204.4

6.1
84.6
4.4
157.2

6.4
100.2
4.0
183.9

Current assets

326.6

252.3

294.5

Creditors and accruals
Current borrowings
Current tax liabilities(139.5)(2.6)(23.6)(131.4)
(0.2)
(9.2)

(151.4)(2.6)(17.8)

Current liabilities(165.7)(140.8)(171.8)Net current assets
Long-term borrowings
Deferred tax liabilities
Pension liabilities
Other non-current liabilities

160.9(527.0)(57.7)
(0.4)
-

111.5
(477.8)(55.7)
(3.8)
(1.0)

122.7
(508.1)(58.6)(0.6)(0.2)

1,255.2

1,223.2

1,280.1

Total equity
Share capital
Share premium
Revenue and other reserves

63.0
497.6
688.7

62.9
492.8
663.1

62.9
493.9
717.2

Shareholders’ funds
Non-controlling interests

1,249.3
5.9

1,218.8
4.4

1,274.0
6.1

1,255.2

1,223.2

1,280.1- more -Page 8Mandarin Oriental International Limited
Consolidated Statement of Changes in Equity
Attributabletoshareholders
Exchangeof thereserves
Company
US$m
US$m

Attributable
to noncontrollinginterests
US$m

Total
equityUS$m

SharecapitalUS$m

Sharepremium
US$m

Capitalreserves
US$m

Revenue
reserves
US$m

Hedging
reserves
US$m

Six months ended 30th June 2018 (unaudited)
At 1st January 2018
Total comprehensive income
Dividends paid by the Company
Issue of shares
Share-based long-term incentive plans
Transfer
At 30th June 2018

62.9
0.1
63.0

493.9
0.1
3.6
497.6

265.9
0.4
(3.6)
262.7

526.5
22.5
(18.9)
530.1

0.1
1.4
1.5

(75.3)(30.3)(105.6)

1,274.0(6.4)(18.9)
0.2
0.4
1,249.3

6.1
(0.2)
5.9

1,280.1(6.6)(18.9)
0.2
0.4
1,255.2

Six months ended 30th June 2017 (unaudited)
At 1st January 2017
Total comprehensive income
Dividends paid by the Company
Issue of shares
Share-based long-term incentive plans
Transfer
At 30th June 2017

62.8
0.1
62.9

490.4
2.4
492.8

286.2
0.1
(18.9)
267.4

501.2
15.0
(31.4)
16.5
501.3

(0.6)
(0.4)
(1.0)

(170.6)66.0(104.6)

1,169.4
80.6(31.4)
0.1
0.1
1,218.8

4.0
0.4
4.4

1,173.4
81.0(31.4)
0.1
0.1
1,223.2

Total comprehensive income for the six months ended 30th June 2018 included in revenue reserves comprised profit attributable to shareholders of
the Company of US$22.3 million (2017: US$15.0 million) and net actuarial gain on employee defined benefit plans of US$0.2 million (2017: nil).
(Consolidated Statement of Changes in Equity continued on page 9)- more -Page 9Mandarin Oriental International Limited
Consolidated Statement of Changes in Equity (continued)

Year ended 31st December 2017
At 1st January 2017
Total comprehensive income
Dividends paid by the Company
Issue of shares
Share-based long-term incentive plans
Change in interest in a subsidiary
Transfer
At 31st December 2017

SharecapitalUS$m

Sharepremium
US$m

Capitalreserves
US$m

Revenue
reserves
US$m

Hedging
reserves
US$m

62.8
0.1
62.9

490.4
0.6
2.9
493.9

286.2
(0.8)
(19.5)
265.9

501.2
61.3
(50.3)
(2.3)
16.6
526.5

(0.6)
0.7
0.1

Attributabletoshareholders
Exchangeof thereserves
Company
US$m
US$m(170.6)95.3(75.3)

1,169.4
157.3(50.3)
0.7
(0.8)
(2.3)
1,274.0

Attributable
to noncontrollinginterests
US$m

Total
equity
US$m

4.0
(0.2)
2.3
6.1

1,173.4
157.1(50.3)
0.7(0.8)
1,280.1

Total comprehensive income for the year ended 31st December 2017 included in revenue reserves comprised profit attributable to shareholders of the Company
of US$54.9 million and net actuarial gain on employee defined benefit plans of US$6.4 million.
Change in interest in a subsidiary included the Group’s increase in attributable interest in Portals Hotel Site LLC, the owner of Mandarin Oriental,
Washington D.C., from 80% to 83.6% as a result of a non-controlling member of the subsidiary failing to fund an additional capital contribution in 2017.

- more -Page 10

Mandarin Oriental International Limited
Consolidated Cash Flow Statement(unaudited)
Six months ended
30th June
2017
2018
US$m
US$m

Year ended
31st
December
2017
US$m

35.3
29.5
2.4
20.5
(24.1)
0.7
(6.5)
(1.9)
55.9

22.5
26.0
1.0
0.3
5.7
0.7
(7.0)
(4.5)
44.7

69.0
56.7
2.1
0.2
9.6
1.3
(12.3)(13.3)
113.3

Dividends and interest from associates andjoint ventures

3.2

2.0

6.6

Cash flows from operating activities

59.1

46.7

119.9

Investing activities
Purchase of tangible assets
Purchase of intangible assets
Payment on Munich expansion
Purchase of other investments
Advance to associates and joint ventures
Repayment of loans to associates and joint ventures
Sale of other investments(34.0)
(2.2)
(0.8)
(4.9)
0.4
-

(36.2)
(0.9)
(2.9)
(0.7)
(1.9)
0.8
-

(82.6)
(5.7)
(3.1)
(0.9)
(11.4)
1.3
0.4

Cash flows from investing activities(41.5)(41.8)(102.0)Financing activities
Issue of shares
Drawdown of borrowings
Repayment of borrowings
Dividends paid by the Company (note 8)

0.1
24.1
(0.1)
(18.9)(2.4)(31.4)

0.6
30.8
(2.5)
(50.3)Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Effect of exchange rate changes
Cash and cash equivalents at end of period

5.2
22.8
183.9
(2.3)
204.4

(33.8)(28.9)
182.5
3.6
157.2

(21.4)
(3.5)
182.5
4.9
183.9

Operating activities
Operating profit
Depreciation
Amortisation of intangible assets
Other non-cash items
Movements in working capitalInterest received
Interest and other financing charges paid
Tax paid- more -Page 11

Mandarin Oriental International Limited
Notes to Condensed Financial Statements
1. ACCOUNTING POLICIES AND BASIS OF PREPARATIONThe condensed financial statements have been prepared in accordance with IAS 34 ‘Interim
Financial Reporting’ and on a going concern basis. The condensed financial statements
have not been audited or reviewed by the Group’s auditors pursuant to the UK Auditing
Practices Board guidance on the review of interim financial information.
There are no changes to the accounting policies as described in the 2017 annual financial
statements except for the adoption of IFRS 9 ‘Financial Instruments’ and IFRS 15‘Revenue from Contracts with Customers’ from 1st January 2018 as set out below.
The other amendments, which are effective in 2018 and relevant to the Group’s operations,do not have a significant effect on the Group’s accounting policies.
The Group has not early adopted any standard, interpretation or amendment that have been
issued but not yet effective.
IFRS 9 ‘Financial Instruments’
Under IFRS 9, the gains and losses arising from changes in fair value of the Group’s
investments in equity securities, previously classified as available-for-sale, will berecognised in profit and loss, instead of through other comprehensive income. Such fairvalue gains or losses on revaluation of these investments are classified as non-trading items,
and do not have any impact on the Group’s underlying profit attributable to shareholders
and shareholders’ funds. The new forward-looking expected credit loss model, which
replaces the incurred loss impairment model, does not affect the Group’s impairment
provisions and earnings. The new hedge accounting rules, which align the accounting forhedging instruments closely with the Group’s risk management practices, has no
significant impact to the Group.
IFRS 15 ‘Revenue from Contracts with Customers’
IFRS 15 establishes a comprehensive framework for the recognition of revenue. It replaces
IAS 11 ‘Construction Contracts’ and IAS 18 ‘Revenue’ which covers contracts for goods
and services. The core principle in the framework is that revenue is recognised whencontrol of a good or service transfers to a customer. The new standard does not change theGroup’s revenue recognition from hotel ownership, hotel management, rendering ofservices and sales of goods.
Changes to accounting policies on adoption of IFRS 9 and 15 have been applied
retrospectively but the adoption does not have impact to the comparative financial
statements.
Changes in principal accounting policies on adoption of IFRS 9 and 15
Investments
The Group’s investments are measured at fair value through profit and loss, fair value
through other comprehensive income or at amortised cost. Their classification is based on
the management’s business model and their contractual cash flows characteristics.
- more -Page 12
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)
Change in principal accounting policies on adoption of IFRS 9 and 15 (continued)
Investments (continued)
Equity investments are measured at fair value with fair value gains and losses recognised in
profit and loss, unless management has elected to recognise the fair value gains and losses
through other comprehensive income. For equity investments fair value through othercomprehensive income, there is no subsequent reclassification of the fair value gains andlosses to profit and loss upon its derecognition.
All purchases and sales of investments are recognised on the trade date, which is the datethat the Group commits to purchase or sell the investments.
Debtors
Debtors, excluding derivative financial instruments, are measured at amortised cost except
where the effect of discounting would be immaterial. The impairment measurement issubject to whether there has been a significant increase in credit risk. The Group applied
the simplified approach permitted by IFRS 9, which requires expected lifetime losses to berecognised from initial recognition of the trade debtors. The carrying amount of the asset is
reduced through the use of an allowance account and the amount of the loss is recognised inarriving at operating profit. When a debtor is uncollectible, it is written off against theallowance account. Subsequent recoveries of amount previously written off are credited to
profit and loss.
Debtors with maturities greater than 12 months after the balance sheet date are classified
under non-current assets.
Non-trading items
Non-trading items are separately identified to provide greater understanding of the Group’s
underlying business performance. Items classified as non-trading items include fair value
gains or losses on revaluation of equity investments which are fair value through profit andloss; gains and losses arising from the sale of businesses, investments and properties;
impairment of non-depreciable intangible assets and other investments; provisions for the
closure of businesses; acquisition-related costs in business combinations; and other credits
and charges of a non-recurring nature that require inclusion in order to provide additional
insight into underlying business performance.
Revenue recognition
Revenue is measured at the fair value of the consideration received and receivable andrepresents amounts receivable for goods and service provided in the normal course ofbusiness, net of discounts and sales related taxes.
i)

Revenue from hotel ownership comprises amounts earned in respect of services,
facilities and goods supplied by the subsidiary hotels. Revenue from the rendering ofservices is recognised when services are performed, provided that the amount can bemeasured reliably. Revenue from the sale of goods is recognised when or as the controlof the assets is transferred to the customers, which generally coincides with the time
when the goods are delivered to customers.

- more -Page 13
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)
Change in principal accounting policies on adoption of IFRS 9 and 15 (continued)
Revenue recognition (continued)ii) Revenue from hotel management comprises gross fees earned from the management of
all the hotels operated by the Group. Management fees are recognised when earned asdetermined by the management contract. Management fees charged to the subsidiary
hotels are eliminated upon consolidation.
iii) Receipts under operating leases are accounted for on an accrual basis over the leaseterms.
iv) Interest income from a financial asset is recognised on a time proportion basis using theeffective interest method.
v) Dividend income is recognised when the right to receive payment is established.
2.

REVENUESix months ended 30th June
2017
2018
US$m
US$m
By geographical area:
Hong Kong
Other Asia
EuropeThe Americas

118.5
55.5
76.3
57.6

109.8
51.5
72.9
52.5

307.9

286.7

3. EBITDA FROM SUBSIDIARIES (EARNINGS BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION)
Six months ended 30th June
2017
2018
US$m
US$m
By geographical area:
Hong Kong
Other Asia
EuropeThe Americas
Underlying EBITDA from subsidiaries
Non-trading items- Write-off of tangible assets (note 7)- Insurance claim for material damage oftangible assets (note 7)
EBITDA from subsidiaries
Less: depreciation and amortisation
Operating profit- more -

34.1
16.2
7.7
9.2

31.4
13.2
1.1
3.8

67.2

49.5

(20.3)

-

20.3

-

-

-

67.2
(31.9)
35.3

49.5(27.0)
22.5

Page 14
4. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Depreciation
andEBITDA amortisation
US$m
US$m

Six months ended
30th June 2018
By geographical area:
Other Asia
EuropeThe Americas

Six months ended
30th June 2017
By geographical area:
Other Asia
EuropeThe Americas

Operatingprofit/(loss)
US$m

Net
financingcharges
US$m

Tax
US$m

Net
profit/(loss)
US$m

12.3
(1.5)
1.6

(4.4)
(2.1)
(1.4)

7.9
(3.6)
0.2

(0.6)
(1.1)

(1.5)
-

5.8
(3.6)
(0.9)

12.4

(7.9)

4.5

(1.7)

(1.5)

1.3

10.2
0.9
0.9

(4.2)
(0.4)
(1.5)

6.0
0.5
(0.6)

(0.7)
(1.1)

(1.1)
-

4.2
0.5
(1.7)

12.0

(6.1)

5.9

(1.8)

(1.1)

3.0

5. TAX
Six months ended 30th June
2017
2018
US$m
US$m
Tax (charged)/credited to profit and loss is analysed as follows:
Current tax
Deferred tax

By geographical area:
Hong Kong
Other Asia
EuropeThe Americas

(8.5)
0.1

(5.9)
1.2

(8.4)

(4.7)

(5.7)
(1.1)
(1.5)
(0.1)

(4.0)
(0.1)
(0.6)
-

(8.4)

(4.7)

Tax charge relating to cash flow hedges of US$0.3 million (2017: tax credit of
US$0.1 million) is included in other comprehensive income or expense.
Tax on profits has been calculated at rates of taxation prevailing in the territories in which
the Group operates.
Share of tax of associates and joint ventures of US$1.5 million (2017: US$1.1 million) is
included in share of results of associates and joint ventures (note 4).
- more -Page 15
6. EARNINGS PER SHARE
Basic earnings per share are calculated on the profit attributable to shareholders of
US$22.3 million (2017: US$15.0 million) and on the weighted average number of
1,259.9 million (2017: 1,257.2 million) shares in issue during the period.
Diluted earnings per share are calculated on profit attributable to shareholders of
US$22.3 million (2017: US$15.0 million) and on the weighted average number of
1,263.2 million (2017: 1,261.0 million) shares after adjusting for the number of shares
which are deemed to be issued for no consideration under the share-based long-term
incentive plans based on the average share price during the period.
The weighted average number of shares is arrived at as follows:
Ordinary shares in millions
2017
2018
Weighted average number of shares for basic earnings per sharecalculation
Adjustment for shares deemed to be issued for no consideration
under the share-based long-term incentive plans
Weighted average number of shares for diluted earnings per sharecalculation

1,259.9

1,257.2

3.3

3.8

1,263.2

1,261.0

Additional basic and diluted earnings per share are also calculated based on underlying
profit attributable to shareholders. A reconciliation of earnings is set out below:
Six months ended 30th June
2017

2018

Profit attributable toshareholders
Non-trading items(note 7)
Underlying profit
attributable toshareholders

Basic
Dilutedearnings earnings
per share per share
US¢
US$m
US¢

Basic
Dilutedearnings earnings
per share per share
US$m
US¢
US¢

22.3

15.0

1.77

1.77

1.19

1.19

1.19

-

-

22.3

1.19

1.77

- more -

1.77

15.0

Page 16
7. NON-TRADING ITEMS
Non-trading items are separately identified to provide greater understanding of the Group’s
underlying business performance. Items classified as non-trading items include fair value
gains or losses on revaluation of equity investments which are fair value through profit andloss; gains and losses arising from the sale of businesses, investments and properties;
impairment of non-depreciable intangible assets and other investments; provisions for the
closure of businesses; acquisition-related costs in business combinations; and other credits
and charges of a non-recurring nature that require inclusion in order to provide additional
insight into underlying business performance.
Following the fire at Mandarin Oriental Hyde Park, London on 6th June 2018, the hotel
has closed for the necessary repairs in order to restore the asset. The impact of the fire is
being assessed by insurers, however, given the extent of the coverage under the Group’s
insurance arrangements, the impact on the Group’s profitability is expected to be modest.
Based on the initial assessment by the Group, the estimated write-off of tangible assets
and estimated insurance claim receivable for material damage of tangible assets caused by
the fire recognised as non-trading items during the period are analysed as follows:
Six months ended 30th June
2017
2018
US$m
US$m
Write-off of tangible assets (estimated at £15 million)
Insurance claim for material damage of tangible assets(20.3)
20.3--

On 18th July 2018, the insurers made an advance interim payment of £20 million(US$27 million) to the Group in respect of the cover available under the insurance policies.
The process of repairs is now underway and it is anticipated that the hotel will be able topartially reopen in the fourth quarter of this year.
8. DIVIDENDS
Six months ended 30th June
2017
2018
US$m
US$m
Final dividend in respect of 2017 of US¢1.50(2016: US¢2.50) per share

18.9

31.4

An interim dividend in respect of 2018 of US¢1.50 (2017: US¢1.50) per share amounting toa total of US$18.9 million (2017: US$18.9 million) has been declared by the Board and will
be accounted for as an appropriation of revenue reserves in the second half of the year
ending 31st December 2018.

- more -Page 17
9. CAPITAL COMMITMENTS
Total capital commitments at 30th June 2018 and 31st December 2017 amounted to
US$221.9 million and US$254.3 million respectively.
10. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts
at 30th June 2018 and 31st December 2017 are as follows:
Fair value ofhedging
instruments
US$m

30th June 2018
Financial assets
measured at fair value
Other investments- equity investments
Derivative financial
instruments

Financial assets notmeasured at fair value
Debtors
Bank and cash balances

Financial liabilities notmeasured at fair value
Borrowings
Trade and other payable
excluding non-financial
liabilities

Fair value
Financialthroughassets at
profit and loss amortised cost
US$m
US$m

Other
financialliabilities
US$m

Total
carrying
amount
US$m

Fair
value
US$m

-

11.1

-

-

11.1

11.1

1.9

-

-

-

1.9

1.9

1.9

11.1

-

-

13.0

13.0

-

-

80.0
204.4

-

80.0
204.4

80.0
204.4

-

-

284.4

-

284.4

284.4

-

-

-

(529.6)(529.6)(529.6)---(133.5)(133.5)(133.5)---(663.1)(663.1)(663.1)- more -Page 18
10. FINANCIAL INSTRUMENTS (CONTINUED)
Financial instruments by category (continued)
Fair value ofhedging
instruments
US$m

31st December 2017
Financial assets
measured at fair value
Other investments- equity investments
Derivative financial
instruments

Financial assets notmeasured at fair value
Debtors
Bank and cash balances

Financial assets notmeasured at fair value
Derivative financial
instruments
Financial liabilities notmeasured at fair value
Borrowings
Trade and other payable
excluding non-financial
liabilities

Fair value
Financialthroughassets at
profit and loss amortised cost
US$m
US$m

Other
financialliabilities
US$m

Total
carrying
amount
US$m

Fair
value
US$m

-

11.0

-

-

11.0

11.0

0.5

-

-

-

0.5

0.5

0.5

11.0

-

-

11.5

11.5

-

-

65.5
183.9

-

65.5
183.9

65.5
183.9

-

-

249.4

-

249.4

249.4

(0.2)

-

-

-

(0.2)

(0.2)

-

-

-

(510.7)(510.7)(510.7)---(146.3)(146.3)(146.3)---(657.0)(657.0)(657.0)Fair value estimation(i) Financial instruments that are measured at fair value
For financial instruments that are measured at fair value in the balance sheet, thecorresponding fair value measurements are disclosed by level of the following fair value
measurement hierarchy:(a) Inputs other than quoted prices in active markets that are observable for the asset or
liability, either directly or indirectly (‘observable current market transactions’)
The fair values of derivative financial instruments are determined using rates quoted by
the Group’s bankers at the balance sheet date. The rates for interest rate swaps and caps
and forward foreign exchange contracts are calculated by reference to market interest
rates and foreign exchange rates.
The fair values of unlisted investments mainly include club and school debentures, aredetermined using prices quoted by brokers at the balance sheet date.
- more -Page 19
10. FINANCIAL INSTRUMENTS (CONTINUED)
Fair value estimation (continued)(i) Financial instruments that are measured at fair value (continued)(b) Inputs for assets or liabilities that are not based on observable market data(‘unobservable inputs’)
The fair values of other unlisted investments are determined using valuation techniquesby reference to observable current market transactions (including price-to earnings andprice-to book ratios of listed securities of entities engaged in similar industries), or themarket prices of the underlying investments with certain degree of entity specificestimates, or determined with reference to the underlying cash flow from investments,
discounted using a risk-adjusted discount rate.
There were no changes in valuation techniques during the six months ended 30th June 2018
and the year ended 31st December 2017.
The table below analyses financial instruments carried at fair value at 30th June 2018 and31st December 2017, by the levels in the fair value measurement hierarchy:

30th June 2018
AssetsOther investments- equity investments
Derivative financial instruments at fair value- through other comprehensive income

31st December 2017
AssetsOther investments- equity investments
Derivative financial instruments at fair value- through other comprehensive income
Liabilities
Derivative financial instruments at fair value- through other comprehensive income

Observable
marketcurrenttransactions
US$m

Unobservable
inputs
US$m

Total
US$m

1.7

9.4

11.1

1.9
3.6

9.4

1.9
13.0

1.7

9.3

11.0

0.5
2.2

9.3

0.5
11.5

(0.2)

-

(0.2)

There were no transfers among the two categories during the six months ended
30th June 2018 and the year ended 31st December 2017.

- more -Page 20
10. FINANCIAL INSTRUMENTS (CONTINUED)
Fair value estimation (continued)(i) Financial instruments that are measured at fair value (continued)
Movement of financial instruments which are valued based on unobservable inputs
during the six months ended 30th June 2018 and the year ended 31st December 2017 are
as follows:
Unlisted
equityinvestments
US$m
At 1st January 2018
Additions9.3
0.1

At 30th June 2018

9.4

At 1st January 2017
Additions

8.6
0.7

At 31st December 2017

9.3(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank and cash balances, current creditors and current
borrowings are assumed to approximate their carrying amounts due to the short-term
maturities of these assets and liabilities.
The fair values of long-term borrowings are based on market prices or are estimatedusing the expected future payments discounted at market interest rates.
11. RELATED PARTY TRANSACTIONSIn the normal course of business, the Group undertakes a variety of transactions withcertain of its associates and joint ventures.
The most significant of such transactions are management fees of US$7.3 million(2017: US$6.2 million) received from the Group’s six (2017: six) associate and joint
venture hotels which are based on long-term management agreements on normal
commercial terms.
There were no other related party transactions that might be considered to have a material
effect on the financial position or performance of the Group that were entered into orchanged during the first six months of the current financial year.
Amounts of outstanding balances with associates and joint ventures are included in debtors
and prepayments, as appropriate.

- more -Page 21

Mandarin Oriental International Limited
Principal Risks and Uncertainties
The Board has overall responsibility for risk management and internal control. The following
have been identified previously as the areas of principal risk and uncertainty facing theCompany, and they remain relevant in the second half of the year.







Economic and Financial Risk
Commercial and Market Risk
Pandemic, Terrorism and Natural Disasters
Key Agreements
Reputational Risk and Value of the Brand
Regulatory and Political Risk

For greater detail, please refer to pages 95 and 96 of the Company’s 2017 Annual Report, acopy of which is available on the Company’s website www.mandarinoriental.com.
Responsibility Statement
The Directors of the Company confirm to the best of their knowledge that:(a) the condensed financial statements have been prepared in accordance with IAS 34;
and(b) the interim management report includes a fair review of all information required to bedisclosed by the Disclosure Guidance and Transparency Rules 4.2.7 and 4.2.8 issued by the
Financial Conduct Authority in the United Kingdom.
For and on behalf of the Board
James Riley
Stuart Dickie
Directors- more -Page 22

The interim dividend of US¢1.50 per share will be payable on 10th October 2018 toshareholders on the register of members at the close of business on 17th August 2018. The
shares will be quoted ex-dividend on the Singapore Exchange and the London Stock
Exchange on 15th and 16th August 2018, respectively. The share registers will be closed
from 20th to 24th August 2018, inclusive.
Shareholders will receive their cash dividends in United States Dollars, unless they are
registered on the Jersey branch register, in which case they will have the option to elect for
their dividends to be paid in Sterling. These shareholders may make new currency
elections for the 2018 interim dividend by notifying the United Kingdom transfer agent inwriting by 21st September 2018. The Sterling equivalent of dividends declared in UnitedStates Dollars will be calculated by reference to a rate prevailing on 26th September 2018.
Shareholders holding their shares through CREST in the United Kingdom will receive their
cash dividends in Sterling only as calculated above. Shareholders holding their sharesthrough The Central Depository (Pte) Limited (‘CDP’) in Singapore will receive their cash
dividends in United States Dollars unless they elect, through CDP, to receive Singapore
Dollars.
Shareholders on the Singapore branch register who wish to deposit their shares into the
CDP system by the dividend record date, being 17th August 2018, must submit the relevant
documents to M & C Services Private Limited, the Singapore branch registrar, by no later
than 5.00 p.m. (local time) on 16th August 2018.
Mandarin Oriental Hotel Group
Mandarin Oriental Hotel Group is an international hotel investment and management groupwith deluxe and first class hotels, resorts and residences in sought-after destinations around theworld. Having grown from its Asian roots into a global brand, the Group now operates 31
hotels and eight residences in 21 countries and territories, with each property reflecting theGroup’s oriental heritage and unique sense of place. Mandarin Oriental has a strong pipelineof hotels and residences under development. The Group has equity interests in a number of its
properties and adjusted net assets worth approximately US$5.7 billion as at 30th June 2018.
Mandarin Oriental’s aim is to be recognised as the world’s best luxury hotel group. This will beachieved by investing in the Group’s exceptional facilities and its people, and seeking selective
opportunities for expansion around the world, while maximising profitability and long-term
shareholder value. The Group regularly receives recognition and awards for outstanding
service and quality management. The Group is committed to exceeding its guests’ expectations
through exceptional levels of hospitality, while maintaining its position as an innovative leader
in the hotel industry.
The parent company, Mandarin Oriental International Limited, is incorporated in Bermuda andhas a standard listing on the London Stock Exchange, with secondary listings in Bermuda andSingapore. Mandarin Oriental Hotel Group International Limited, which operates from Hong
Kong, manages the activities of the Group’s hotels. Mandarin Oriental is a member of theJardine Matheson Group.
- end -

Page 23
For further information, please contact:
Mandarin Oriental Hotel Group International Limited
James Riley / Stuart Dickie
Jill Kluge / Sally de Souza(852) 2895 9288
(852) 2895 9167

Brunswick Group Limited
Karin Wong(852) 3512 5077

As permitted by the Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority in the United Kingdom, the Company will not be posting a printed version of theHalf-Yearly Results announcement to shareholders. The Half-Yearly Results announcement
will remain available on the Company’s website, www.mandarinoriental.com, together withother Group announcements.