To:

Business Editor

1st August 2019
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 2019
Highlights
 Underlying profit impacted by closure of The Excelsior and renovation in Bangkok
 Mandarin Oriental Hyde Park, London fully reopened Four new hotels opened Two new management contracts signed“The closure of The Excelsior and the renovation in Bangkok have led to reduced earnings in
the first half of the year, while overall results for the rest of the Group were broadly flat.
Elsewhere, Mandarin Oriental will benefit from its reopened hotel in London as well as thegrowing pipeline of new developments.”
Ben Keswick
Chairman

Combined total revenue of hotels under management(1)Underlying EBITDA (Earnings before interest, tax,
depreciation and amortisation)(2)Underlying profit attributable to shareholders(3)(Loss)/profit attributable to shareholders
Underlying earnings per share(3)(Loss)/earnings per share
Interim dividend per share
Net asset value per share(4)(5)
Adjusted net asset value per share(4)(6)
Net debt/shareholders’ funds(4)(5)
Net debt/adjusted shareholders’ funds(4)(6)
(1)
(2)
(3)

(4)
(5)
(6)

(7)

(unaudited)
Six months ended 30th June
2019
2018
Change
US$m
US$m%
restated(7)
641.0
700.2
–8
69.1
10.7
(12.1)
US¢
0.85(0.96)
1.50
US$
3.29
4.61
8%
6%

84.0
22.2
22.2
US¢
1.76
1.76
1.50
US$
0.98
4.62
23%
5%

–18
–52
N/A
%
–52
N/A
%
+236
-

Combined revenue includes turnover of the Group’s subsidiary hotels in addition to 100% of revenue from associate, joint venture and managed hotels.
EBITDA of subsidiaries plus the Group’s share of EBITDA of associates and joint ventures.
The Group uses ‘underlying profit’ in its internal financial reporting to distinguish between ongoing business performance 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.
At 30th June 2019 and 31st December 2018, respectively.
The net asset value per share and net debt/shareholders’ funds at 30th June 2019 included a US$2.9 billion one-time asset revaluation gain through reserves following
the reclassification of The Excelsior site as an investment property on 31st March 2019.
The Group’s investment properties under development are carried at fair value on the basis of valuations carried out by independent valuers at 30th June 2019. The
freehold and leasehold interests are carried at amortised cost in the consolidated balance sheet. Both the adjusted net asset value per share and net debt/adjusted
shareholders’ funds for 30th June 2019 and 31st December 2018 have included the market value of the Group’s freehold and leasehold interests which were appraised
as at 31st December 2018.
The comparative figures in 2018 have been restated due to changes in accounting policies upon adoption of IFRS 16 ‘Leases’, as set out in note 1 to the condensed
financial statements.

The interim dividend of US¢1.50 per share will be payable on 17th October 2019 to shareholders on the register of members at the close of business on 23rd August 2019.

- more -Page 2
MANDARIN ORIENTAL INTERNATIONAL LIMITEDHALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2019
OVERVIEW
Underlying profit was lower during the first half of the year, primarily due to the closure of The
Excelsior and reduced earnings from the Bangkok hotel, which largely closed in March 2019
for a major renovation. Across the rest of the Group’s properties, overall results were broadly
flat.
FINANCIAL PERFORMANCE
Underlying earnings before interest, tax, depreciation and amortisation for the first six monthsof 2019 were US$69 million, down from US$84 million in the first half of 2018. In the firsthalf of 2018, results included the receipt of a one-off early termination fee in respect of the
cessation of the Group’s management of the Las Vegas hotel from the end of August 2018.
Underlying profit for the period was US$11 million, compared with US$22 million in theequivalent period in 2018. Underlying earnings per share were US¢0.85, down from US¢1.76
in 2018. The Group recognised US$23 million of net non-trading losses in the period, primarily
in connection with the closure of The Excelsior.
An interim dividend of US¢1.50 per share has been declared, unchanged from last year.
At 30th June 2019, the Group’s net debt was US$336 million and gearing as a percentage ofadjusted shareholders’ funds was 6%.
HOTEL PERFORMANCE
Performances were mixed across the Group’s owned properties. In Asia, a slow-down incorporate business reduced earnings at the Group’s flagship Hong Kong hotel. Results in Tokyo
were notably better, while in the rest of the region performances were broadly flat, except for
Bangkok which was lower due to the renovation. In Europe, earnings were higher at the London
hotel, which continued to include insurance coverage for loss of profits due to the fire in June
2018. In the same period last year, the hotel was only partially open whilst undergoing a- more -Page 3renovation programme. In Paris, results were lower as city-wide demand was impacted bydemonstrations in the city. In America, Boston performed well but results were weaker in
Washington D.C.
NEW DEVELOPMENTS
The Group opened four new hotels in the first six months of the year in Beijing, Doha, Dubai
and Lake Como.
In addition, the Group signed management contracts for two new properties: a second hotel andresidences in Istanbul and standalone residences in New York.
OUTLOOK
The closure of The Excelsior and the renovation in Bangkok have led to reduced earnings in thefirst half of the year, while overall results for the rest of the Group were broadly flat. Elsewhere,
Mandarin Oriental will benefit from its reopened hotel in London as well as the growing
pipeline of new developments.

Ben Keswick
Chairman- more -Page 4
Mandarin Oriental International Limited
Consolidated Profit and Loss Account(unaudited)
Six months ended 30th June2019
Underlying
business
performance
US$m

Non-trading
Items(note 7)
US$m

Revenue (note 2)
Cost of sales

279.6(185.8)Gross profit
Selling and distribution costs
Administration expenses
Other operating(expense)/income
Operating profit (note 3)

Year ended 31st December
2018

2018

Total
US$m

Underlying
business
performance
US$mrestated

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

279.6(185.8)307.9(195.4)93.8(21.2)(58.8)-

93.8(21.2)(58.8)

11.8
25.6(23.5)(23.5)

Financing charges
Interest income

(9.4)
1.8

Net financing charges
Share of results of associates
and joint ventures (note 4)(Loss)/profit before tax
Tax (note 5)(Loss)/profit after tax
Attributable to:Shareholders of the Company
Non-controlling interests(Loss)/earnings per share (note 6)- basic- diluted

Total
US$m
restated

Underlying
business
performance
US$mrestated

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

Total
US$m
restated-

307.9(195.4)613.7(388.2)-613.7(388.2)112.5(19.9)(60.1)-

112.5(19.9)(60.1)

225.5(42.3)(122.1)-225.5(42.3)(122.1)(11.7)
2.1

3.3
35.8

-

3.3
35.8

30.6
91.7

(21.0)(21.0)

9.6
70.7

-

(9.4)
1.8

(7.3)
0.8

-

(7.3)
0.8

(16.4)
2.2-(16.4)
2.2

(7.6)

-

(7.6)

(6.5)

-

(6.5)

(14.2)-(14.2)

(1.6)
16.4
(5.8)
10.6

(23.5)
0.7(22.8)

(1.6)
(7.1)
(5.1)
(12.2)

1.3
30.6
(8.4)
22.2

--

1.3
30.6
(8.4)
22.2

5.7
83.2
(18.5)
64.7(21.0)(0.5)(21.5)

5.7
62.2(19.0)
43.2

10.7
(0.1)

(22.8)-(12.1)
(0.1)

22.2
-

-

22.2
-

64.9
(0.2)

(21.5)
-

43.4
(0.2)

10.6

(22.8)(12.2)

22.2

-

22.2

64.7

(21.5)

43.2

US¢

US¢

US¢

US¢

US¢

US¢

0.85
0.85

(0.96)(0.96)

1.76
1.76

1.76
1.76

5.15
5.14

3.44
3.43

- more -Page 5Mandarin Oriental International Limited
Consolidated Statement of Comprehensive Income(unaudited)
Six months ended
30th June
2018
2019
US$m
US$m
restated

Year ended
31st
December2018
US$mrestated(12.2)

22.2

43.2

(0.6)

0.2

(3.0)

2,943.4
0.1

-

0.5

2,942.9

0.2

(2.5)

12.8

(28.8)(39.7)

(2.4)
0.4

1.6
(0.3)

0.6
(0.1)

2.0

(1.6)

(1.8)

12.8

(29.1)(41.0)

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

2,955.7(28.9)(43.5)

Total comprehensive income/(expense) for theperiod2,943.5

(6.7)

(0.3)

Attributable to:Shareholders of the Company
Non-controlling interests

2,943.5
-

(6.5)
(0.2)

(0.3)

2,943.5

(6.7)

(0.3)

(Loss)/profit for the period
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans
Revaluation surplus of right-of-use assets before
transfer to investment properties underdevelopment (note 8)
Tax on items that will not be reclassified
Items that may be reclassified subsequently to
profit or loss:
Net exchange translation differences- net gains/(losses) arising during the period
Cash flow hedges- net (losses)/gains arising during the period
Tax relating to items that may be reclassified
Share of other comprehensive income/(expense)of associates and joint ventures- more -Page 6

Mandarin Oriental International Limited
Consolidated Balance Sheet(unaudited)
At 30th June
2018
2019
US$m
US$m
restated

At 31stDecember2018
US$mrestated

Net assets
Intangible assets
Tangible assets
Right-of-use assets
Investment properties under development (note 8)
Associates and joint ventures
Other investments
Deferred tax assets
Pension assets
Non-current debtors

50.4
1,179.6305.5
3,020.3
208.6
16.2
12.0
4.9

44.0
1,228.8
279.9
193.8
11.1
10.7
4.2
1.7

49.3
1,205.9
342.9
196.1
15.2
11.5
0.2
5.1

Non-current assets

4,797.5

1,774.2

1,826.2

StocksCurrent debtors
Current tax assets
Bank and cash balances

5.8
99.2
2.0
211.1

6.2
112.8
3.2
204.4

6.6
95.9
3.5
246.8

Current assets

318.1

326.6

352.8

Current creditors
Current borrowings (note 9)
Current lease liabilities
Current tax liabilities(147.7)(2.5)(6.9)(17.5)(137.1)(2.6)(6.6)(23.6)(168.3)(524.2)(6.9)(14.0)

Current liabilities(174.6)(169.9)(713.4)

Net current assets/(liabilities)
Long-term borrowings (note 9)
Non-current lease liabilities
Deferred tax liabilities
Pension liabilities
Non-current creditors

143.5(544.3)(173.3)(58.1)
(2.6)
(1.5)

156.7
(527.0)(97.3)(57.7)(0.4)-(360.6)(7.3)(160.1)(61.6)(0.4)-

4,161.2

1,248.5

1,236.2

Total equity
Share capital
Share premium
Revenue and other reserves

63.1
499.7
3,594.8

63.0
497.6
682.0

63.1
497.8
671.5

Shareholders’ funds
Non-controlling interests

4,157.6
3.6

1,242.6
5.9

1,232.4
3.8

4,161.2

1,248.5

1,236.2- more -Page 7
Mandarin Oriental International Limited
Consolidated Statement of Changes in Equity
Attributable
to Attributable
to nonshareholders
Exchangeof the controlling
reserves
interests
Company
US$m
US$m
US$m

Asset
Revenue revaluation
reserves
reserves
US$m
US$m

Hedging
reserves
US$m

531.8
(6.8)
525.0
(12.6)(18.9)
0.2-

2,943.4
-

0.6
0.6
(2.1)
-

(116.6)(116.6)14.8-

1,239.2(6.8)
1,232.4
2,943.5(18.9)
0.1
0.3
0.2
-

3.8
3.8
(0.2)
-

1,243.0(6.8)
1,236.2
2,943.5(18.9)
0.1
0.3
-

261.0

493.7

2,943.4(1.5)(101.8)4,157.6

3.6

4,161.2

493.9
493.9
0.1
3.6

265.9
265.9
0.4
(3.6)

526.5
(6.6)
519.9
22.4
(18.9)
-

-

0.1
0.1
1.4
-

(75.3)(75.3)(30.3)-

1,274.0(6.6)
1,267.4(6.5)(18.9)
0.2
0.4
-

6.1
6.1
(0.2)
-

1,280.1(6.6)
1,273.5(6.7)(18.9)
0.2
0.4
-

497.6

262.7

523.4

-

1.5

(105.6)

1,242.6

5.9

1,248.5

SharecapitalUS$m

Sharepremium
US$m

Capitalreserves
US$m

Six months ended 30th June 2019 (unaudited)
At 1st January 2019- as previously reported- changes in accounting policies (note 1)- as restatedTotal comprehensive income
Dividends paid by the Company
Issue of shares
Share-based long-term incentive plans
Change in interest in a subsidiary
Transfer

63.1
63.1
-

497.8
497.8
0.1
1.8

262.5
262.5
0.3
(1.8)

At 30th June 2019

63.1

499.7

Six months ended 30th June 2018 (unaudited)
At 1st January 2018
- as previously reported- changes in accounting policies (note 1)- as restatedTotal comprehensive income
Dividends paid by the Company
Issue of shares
Share-based long-term incentive plans
Transfer

62.9
62.9
0.1
-

At 30th June 2018

63.0

Total
equityUS$m

Total comprehensive income for the six months ended 30th June 2019 included in revenue reserves comprised loss attributable to shareholders of the Company of US$12.1 million(2018: profit of US$22.2 million) and net actuarial loss on employee defined benefit plans of US$0.5 million (2018: net actuarial gain of US$0.2 million).
(Consolidated Statement of Changes in Equity continued on page 8)- more -Page 8Mandarin Oriental International Limited
Consolidated Statement of Changes in Equity (continued)
Attributable
to Attributable
to nonshareholders
Exchangeof the controlling
reserves
interests
Company
US$m
US$m
US$m

Share
capitalUS$m

Sharepremium
US$m

Capitalreserves
US$m

Revenue
reserves
US$m

Asset
revaluation
reserves
US$m

Hedging
reserves
US$m

Year ended 31st December 2018
At 1st January 2018
- as previously reported- changes in accounting policies (note 1)- as restatedTotal comprehensive income
Dividends paid by the Company
Issue of shares
Share-based long-term incentive plans
Change in interest in a subsidiary
Transfer

62.9
62.9
0.2
-

493.9
493.9
0.1
3.8

265.9
265.9
0.5
(3.9)

526.5
(6.6)
519.9
40.8
(37.8)
2.0
0.1

-

0.1
0.1
0.5
-

(75.3)(75.3)(41.3)-

1,274.0(6.6)
1,267.4(37.8)
0.3
0.5
2.0
-

6.1
6.1
(0.3)
(2.0)
-

1,280.1(6.6)
1,273.5(0.3)(37.8)
0.3
0.5-

At 31st December 2018

63.1

497.8

262.5

525.0

-

0.6

(116.6)

1,232.4

3.8

1,236.2

Total
equityUS$m

Total comprehensive income for the year ended 31st December 2018 included in revenue reserves comprised profit attributable to shareholders of the Company of US$43.4 million
and net actuarial loss on employee defined benefit plans of US$2.6 million.

- more -Page 9Mandarin Oriental International Limited
Consolidated Cash Flow Statement

Operating activities
Operating profit
Depreciation and amortisation
Other non-cash items
Movements in working capitalInterest received
Interest and other financing charges paid
Tax paid(unaudited)
Six months ended
30th June
2018
2019
US$m
US$m
restated

Year ended
31st
December2018
US$mrestated

2.1
59.7
(8.0)
(22.0)
1.7(10.4)
(3.7)

35.8
35.3
20.5
(24.1)
0.7
(7.1)
(1.9)

70.7
93.2
(4.0)
17.5
1.9
(15.7)(18.8)

19.4

59.2

144.8

Dividends and interest from associates andjoint ventures

3.2

3.2

7.8

Cash flows from operating activities

22.6

62.4

152.6

Investing activities
Purchase of tangible assets
Additions to investment properties
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
Repayment of intangible assets
Insurance recovery received for purchase of
tangible assets (note 10)(27.9)
(4.0)
(2.8)
(0.7)
(0.9)
(15.8)
0.4-(34.0)
(2.2)
(0.8)
(4.9)
0.4
-

(61.2)
(7.4)
(1.1)
(9.1)
1.2
0.8

-

-

7.8

Cash flows from investing activities(51.7)(41.5)(69.0)

Financing activities
Issue of shares
Drawdown of borrowings
Repayment of borrowings
Principal elements of lease payments
Dividends paid by the Company (note 11)

0.1
537.7
(523.3)(3.2)(18.9)

0.1
24.1
(0.1)
(3.3)
(18.9)

0.1
27.6
(0.2)
(6.5)
(37.8)(7.6)

1.9(16.8)(36.7)
246.8
1.0
211.1

22.8
183.9
(2.3)
204.4

66.8
183.9
(3.9)
246.8

Cash flows from financing activities
Net (decrease)/increase 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- more -Page 10

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 2018 annual financial
statements except for the adoption of IFRS 16 ‘Leases’ from 1st January 2019 and theapplication of IAS 40 ‘Investment Properties’ from 31st March 2019 at the time of theclosure of The Excelsior, Hong Kong in order for the site to be redeveloped as a commercial
building. Changes to the accounting policies are set out below.
The other amendments or interpretation, which are effective in 2019 and relevant to theGroup’s operations, do not have a significant effect on the Group’s accounting policies.
The Group has not early adopted any standard or amendments that have been issued but
not yet effective.
IFRS 16 ‘Leases’
The standard replaces IAS 17 ‘Leases’ and related interpretations and introduces acomprehensive model for the identification of lease arrangements and accounting
treatments for both lessors and lessees. The distinction between operating and financeleases is removed for lessee accounting, and is replaced by a model where a lease liability
and a corresponding right-of-use asset have to be recognised on the balance sheet for almost
all leases by the lessees. The Group’s recognised right-of-use assets primarily relate toproperty leases, which are entered into for use as hotels or offices. Prior to 2019, payments
made under operating leases were charged to profit and loss on a straight-line basis overthe period of the lease. From 1st January 2019, each lease payment is allocated between
settlement of the lease liability and finance cost. The finance cost is charged to profit andloss over the lease period. The right-of-use asset is depreciated over the shorter of theasset’s useful life and the lease term on a straight-line basis.
In addition, leasehold land which represents payments to third parties to acquire interests
in property, previously included in intangible assets and tangible assets, is now presented
under right-of-use assets. Leasehold land is amortised over the useful life of the lease,which includes the renewal period if the lease is likely to be renewed by the Group without
significant cost.
The accounting for lessors does not change significantly.
IAS 40 ‘Investment Properties’
Properties including those under operating leases which are held for long-term rental
yields or capital gains are classified and accounted for as investment properties, but thebusiness model does not necessarily envisage that the properties will be held for their
entire useful life. Investment properties are carried at fair value, representing estimatedopen market value determined annually by independent qualified valuers who haverecent experience in the location and category of the investment property being valued.
- more -Page 11
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)
IAS 40 ‘Investment Properties’ (continued)
The market value of investment properties under development are derived using thedirect comparison method, with reference to the residual method where appropriate. The
direct comparison method is based on market evidence of transaction prices for similar
properties which recently transacted and adjusted to reflect the conditions of the subject
properties including property site and location. The residual method is based on theestimated capital value of the proposed development assuming completion as at the dateof valuation, after deducting development costs together with developer’s profit and risk.
Consideration has been given to assumptions that are mainly based on market conditions
existing at the balance sheet date. Changes in fair value are recognised in profit and loss.
Changes to accounting policies on adoption of IFRS 16 have been applied retrospectively,
and the comparative financial statements have been restated.
The effects of adopting IFRS 16 were as follows:(a) On the consolidated profit and loss account for the six months ended 30th June 2018:
Increase/(decrease)in profit
US$m
Costs of sales
Administration expenses
Net financing charges

0.4
0.1
(0.6)

Profit attributable to shareholders of the Company*(0.1)* Further analysed as:
Underlying profit attributable to shareholders
Non-trading items

(0.1)
-

Profit attributable to shareholders(0.1)

Basic underlying earnings per share (US¢)(0.01)

Diluted underlying earnings per share (US¢)(0.01)

Basic earnings per share (US¢)(0.01)

Diluted earnings per share (US¢)(0.01)- more -Page 12
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)(b) On the consolidated statement of comprehensive income for the six months ended
30th June 2018:
Increase/(decrease)in profit
US$m
Profit and total comprehensive income for the period(0.1)(c) On the consolidated balance sheet at 1st January:
Increase/(decrease)
2018
2019
US$m
US$m
AssetsIntangible assets
Tangible assets
Right-of-use assets
Associates and joint ventures
Deferred tax assets(3.7)(180.6)
342.9
(1.0)
0.1

(3.9)
(181.2)
284.2
(0.9)
-

Total assets

157.7

98.2

Equity and liabilities
Revenue and other reserves
Non-current lease liabilities
Current creditors
Current lease liabilities

(6.8)
160.1
(2.5)
6.9

(6.6)
100.6
(2.3)
6.5

Total equity and liabilities

157.7

98.2

(d) On the consolidated cash flow statement for the six months ended 30th June 2018:
Inflows/(outflows)
US$m
Operating activities
Operating profit
Depreciation and amortisation
Interest and other financing charges paid

0.5
3.4
(0.6)

Financing activities
Principal elements of lease payments(3.3)

Net change in cash and cash equivalents-- more -Page 13
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)(e) Changes in principal accounting policies on adoption of IFRS 16
Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease, that is thedate the underlying assets are available for use. Right-of-use assets are measured atcost, less any accumulated depreciation and impairment, and adjusted for any
remeasurement of lease liabilities. The cost of the right-of-use assets includes amountof the initial measurement of lease liabilities recognised, lease payments made at or
before the commencement date less any lease incentives received, initial direct costs
incurred, and restoration costs.
Right-of-use assets are depreciated using the straight-line method over the shorter of
their estimated useful lives and the lease terms.
When right-of-use assets meet the definition of investment properties, they arepresented in investment properties, and are initially measured at cost and subsequently
measured at fair value, in accordance with the Group’s accounting policy.
Payments associated with short-term lease and leases of low-value assets (i.e. US$5,000
or less) are recognised on a straight-line basis as an expense in profit and loss. Shortterm leases are leases with a lease term of 12 months or less.
Lease liabilities
Lease liabilities are recognised at the commencement of the lease and are measured at
the present value of lease payments to be made over the lease term. Lease payments
include fixed payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, andamounts expected to be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain to be exercised andpayments of penalties for terminating a lease, if the lease term reflects the Group
exercising that option. The variable lease payments that do not depend on an index ora rate are recognised as expense in the period on which the event or condition thattriggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental
borrowing rate at the lease commencement date if the interest rate implicit in the leaseis not readily determinable. After the commencement date, the amount of leaseliabilities is increased by the interest costs on the lease liabilities and decreased by lease
payments made. The carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the in-substance fixed lease
payments or a change in the assessment to purchase the underlying asset.
Interest is included as finance costs and charged to the profit and loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance ofthe liabilities for each period.
Lease liabilities are classified as non-current liabilities unless payments are within 12
months from the balance sheet date.

- more -Page 14
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)(f) Critical accounting estimates and judgements(i) Determination of lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease,
together with any periods covered by an option to extend the lease if it is reasonably
certain to be exercised, or any period covered by an option to terminate the lease, if
it is reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease the assets for additionalterms. The Group applies judgement in evaluating whether it is reasonably certain
to exercise the option to renew. That is, the Group considers all relevant factors thatcreate an economic incentive for it to exercise the renewal. After the commencement
date, the Group reassesses the lease term if there is a significant event or change incircumstances that is within its control and affects its ability to exercise or not toexercise the option to renew.
The assessment of whether the Group is reasonably certain to exercise the options
impacts the lease terms, which significantly affects the amount of lease liabilities andright-of-use assets recognised.
(ii) Determination of discount rates
The Group uses the incremental borrowing rate at the lease commencement date as
the discount rate to measure a lease liability if the interest rate implicit in the leasecannot be readily determinable. The Group applies the incremental borrowing ratewith reference to the rate of interest that the Group would have to pay to borrow,over a similar term as that of the lease, the funds necessary to obtain an asset of asimilar value to the right-of-use asset in the country where it is located.
2.

REVENUESix months ended 30th June
2018
2019
US$m
US$m
By geographical area:
Hong Kong
Other Asia
EuropeAmerica

Revenue from contracts with customers:
Recognised at a point in time
Recognised over time
Revenue from other sources:
Rental income- more -

96.5
53.7
77.6
51.8

118.5
55.5
76.3
57.6

279.6

307.9

104.8
164.8
269.6

109.5
188.0
297.5

10.0

10.4

279.6

307.9

Page 15
3. EBITDA FROM SUBSIDIARIES (EARNINGS BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTISATION)
Six months ended
30th June
2018
2019
US$m
US$m

Year ended
31st
December2018
US$m

By geographical area:
Hong Kong
Other Asia
EuropeAmerica

26.0
18.6
13.0
2.3

34.2
19.1
8.1
9.7

75.4
38.4
34.1
13.4

Underlying EBITDA from subsidiaries

59.9

71.1

161.3

(7.7)

(20.3)(28.6)

7.7

20.3

29.6

(6.5)

-

(2.8)

8.8
(0.4)

-

4.4

1.9

-

2.6

61.8

71.1

163.9

(34.3)(35.3)(69.6)(25.4)
2.1

35.8(23.6)
70.7

Non-trading items (note 7)Fire at Mandarin Oriental Hyde Park, London- repair expenses and write-off of tangible
assets and other incidental expenses- insurance recovery for replacement oftangible assets and other incidental expenses
Closure of The Excelsior, Hong Kong
- other costs
Change in fair value of investment properties
under development
Change in fair value of other investments

EBITDA from subsidiaries
Underlying depreciation and amortisation fromsubsidiaries
Non-trading items (note 7)
Closure of The Excelsior, Hong Kong
- accelerated depreciation and amortisation
Operating profit- more -Page 16
4. SHARE OF RESULTS OF ASSOCIATES AND JOINT VENTURES
Depreciation
andEBITDA amortisation
US$m
US$m

Six months ended
30th June 2019
By geographical area:
Other Asia
EuropeAmerica

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

Operatingprofit/(loss)
US$m

Net
financingcharges
US$m

Tax
US$m

Net
profit/(loss)
US$m

9.1
(2.0)
2.1

(6.1)
(0.2)
(1.3)

3.0
(2.2)
0.8

(0.9)
(1.2)

(1.0)
(0.1)

1.1
(2.2)
(0.5)

9.2

(7.6)

1.6

(2.1)

(1.1)

(1.6)

12.8
(1.5)
1.6

(4.8)
(2.1)
(1.4)

8.0
(3.6)
0.2

(0.7)
(1.1)

(1.5)
-

5.8
(3.6)
(0.9)

12.9

(8.3)

4.6

(1.8)

(1.5)

1.3

5. TAX
Six months ended 30th June
2018
2019
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
EuropeAmerica

(8.7)
3.6

(8.5)
0.1

(5.1)

(8.4)

(2.4)
(0.5)
(1.9)
(0.3)

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

(5.1)

(8.4)

Tax credit relating to cash flow hedges of US$0.4 million (2018: tax charge of
US$0.3 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$1.1 million (2018: US$1.5 million) is
included in share of results of associates and joint ventures (note 4).
- more -Page 17
6. EARNINGS PER SHARE
Basic loss/earnings per share are calculated on loss attributable to shareholders of
US$12.1 million (2018: profit of US$22.2 million) and on the weighted average numberof 1,262.6 million (2018: 1,259.9 million) shares in issue during the period.
Diluted loss/earnings per share are calculated on loss attributable to shareholders of
US$12.1 million (2018: profit of US$22.2 million) and on the weighted average numberof 1,263.2 million (2018: 1,263.2 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
2018
2019
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
share calculation

1,262.6

1,259.9

0.6

3.3

1,263.2

1,263.2

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
2018

2019

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

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

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

(12.1)

22.2(0.96)(0.96)

1.76

1.76

1.76

-

22.8

10.7

1.76

0.85

- more -

0.85

22.2

Page 18
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 investments properties and investments which aremeasured at fair value through profit and loss; gains and losses arising from the sale ofbusinesses, investments and properties; impairment of non-depreciable intangible assets
and other investments; provisions for the closure of businesses; acquisition-related costs inbusiness combinations; and other credits and charges of a non-recurring nature that require
inclusion in order to provide additional insight into underlying business performance.
An analysis of non-trading items after interest, tax and non-controlling interests is set out
below:
Year ended
Six months ended
31st
30th June December
2018
2018
2019
US$m
US$m
US$m
Fire at Mandarin Oriental Hyde Park, London*- repair expenses and write-off of tangible assets
and other incidental expenses- insurance recovery for replacement of tangible
assets and other incidental expenses
Closure of The Excelsior, Hong Kong†- accelerated depreciation and amortisation- other costs
Change in fair value of investment properties
under development (note 8)
Change in fair value of other investments(7.7)(20.3)(28.6)

7.7

20.3

29.6

(25.3)(5.9)-(24.3)
(2.6)

8.8
(0.4)

-

4.4

(22.8)-(21.5)* On 15th April 2019, Mandarin Oriental Hyde Park, London fully re-opened following
the necessary repairs caused by the fire on 6th June 2018. The repair expenses andwrite-off of damaged tangible assets, and other incidental expenses have beenrecognised as non-trading expenses. The Group received interim cash payments
during 2018 and the first half of 2019 from the insurers (note 10). The insurancecompensations for the replacement of tangible assets and other incidental expenses
have been recognised as non-trading income. The insurance compensations for the
reimbursement of operating expenditures and loss of profits of US$31.1 million and
US$11.8 million have been recorded as underlying business performance in 2018 andthe first half of 2019 respectively. The total property damage and business interruption
claims with the Group’s insurers are expected to be concluded in 2019.
†

Following an announcement on 9th October 2018, The Excelsior, Hong Kong closed
on 31st March 2019 and demolition work has commenced ahead of the planned
construction of a commercial building on the site (note 8). An accelerated depreciation
and amortisation charge as a result of the revision of the estimated useful lives of the
non-leasehold land assets of the hotel, together with additional costs in respect of thehotel closure, have been recognised as non-trading expenses in 2018 and the first halfof 2019.
- more -Page 19
8. INVESTMENT PROPERTIES UNDER DEVELOPMENT
Following the closure of The Excelsior, Hong Kong, its use has been changed from ahotel property to a commercial property for redevelopment. The site was revalued andtransferred from a right-of-use asset held at historical depreciated cost to an investment
property under development subject to regular valuation reviews. The revaluation
surplus of US$2.9 billion was recognised to the asset revaluation reserve through othercomprehensive income. Subsequent fair value change of the investment property has
been recognised as a non-trading item in the profit and loss.
9. BORROWINGSThe Group entered into new committed facilities of US$754 million in 2019, comprisinga US$114 million facility in London and a US$640 million facility in Hong Kong. Bothfacilities have a tenor of five-year period and are secured against Mandarin Oriental
Hyde Park, London and Mandarin Oriental, Hong Kong respectively. The new facilities
were used to refinance bank loans due to mature in 2019.
10. INSURANCE RECOVERY RECEIVED FOR PURCHASE OF TANGIBLE ASSETSThe Group received interim insurance payments of US$66.3 million and US$7.8 million
in 2018 and the first half of 2019 respectively, covering both property damage andbusiness interruption caused by the fire at Mandarin Oriental Hyde Park, London on
6th June 2018. Of this US$74.1 million, US$7.8 million was to cover the remedial
capital expenditure of the tangible assets which was recorded under investing activities.
The remaining balance was recorded under operating activities.
11. DIVIDENDS
Six months ended 30th June
2018
2019
US$m
US$m
Final dividend in respect of 2018 of US¢1.50(2017: US¢1.50) per share

18.9

18.9

An interim dividend in respect of 2019 of US¢1.50 (2018: US¢1.50) per share amounting
to a total of US$19.0 million (2018: US$18.9 million) has been declared by the Board andwill be accounted for as an appropriation of revenue reserves in the second half of the year
ending 31st December 2019.
12. CAPITAL COMMITMENTS
Total capital commitments at 30th June 2019 and 31st December 2018 amounted to
US$785.0 million and US$816.5 million respectively.

- more -Page 20
13. FINANCIAL INSTRUMENTS
Financial instruments by category
The fair values of financial assets and financial liabilities, together with carrying amounts at
30th June 2019 and 31st December 2018 are as follows:

Fair value ofhedging
instruments
US$m

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

Other
financialliabilities atamortised
costs
US$m

Total
carrying
amount
US$m

Fair
value
US$m

30th June 2019
Financial assets
measured at fair value
Other investments

-

16.2

-

-

16.2

16.2

Financial assets notmeasured at fair value
Debtors
Bank and cash balances

-

-

51.5
211.1

-

51.5
211.1

51.5
211.1

-

-

262.6

-

262.6

262.6

(1.5)

-

-

-

(1.5)

(1.5)

-

-

-

(546.8)(180.2)(546.8)(180.2)(546.8)(180.2)---(119.7)(119.7)(119.7)---(846.7)(846.7)(846.7)

Financial liabilities
measured at fair value
Derivative financial
instruments
Financial liabilities notmeasured at fair value
Borrowings
Lease liabilities
Trade and other payable
excluding non-financial
liabilities- more -Page 21
13. FINANCIAL INSTRUMENTS (CONTINUED)
Financial instruments by category (continued)

Fair value ofhedging
instruments
US$m

31st December 2018
Financial assets
measured at fair value
Other investments
Derivative financial
instruments

Financial assets notmeasured at fair value
Debtors
Bank and cash balances

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

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

Other
financialliabilities atamortised
costs
US$m

Total
carrying
amount
US$m

Fair
value
US$m

-

15.2

-

-

15.2

15.2

0.9

-

-

-

0.9

0.9

0.9

15.2

-

-

16.1

16.1

-

-

61.2
246.8

-

61.2
246.8

61.2
246.8

-

-

308.0

-

308.0

308.0

-

-

-

(531.5)(167.0)(531.5)(167.0)(531.5)(167.0)---(136.3)(136.3)(136.3)---(834.8)(834.8)(834.8)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 22
13. 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 discounted cash flow by projecting the cash flows from these investments.
There were no changes in valuation techniques during the six months ended 30th June 2019
and the year ended 31st December 2018.
The table below analyses financial instruments carried at fair value at 30th June 2019 and31st December 2018, by the levels in the fair value measurement hierarchy:
Observable
marketcurrenttransactions
US$m

Unobservable
inputs
US$m

Total
US$m

30th June 2019
AssetsOther investments

5.7

10.5

16.2

Liabilities
Derivative financial instruments at fair value- through other comprehensive income

(1.5)

-

(1.5)

6.1

9.1

15.2

0.9

-

0.9

7.0

9.1

16.1

31st December 2018
AssetsOther investments
Derivative financial instruments at fair value- through other comprehensive income

There were no transfers among the two categories during the six months ended
30th June 2019 and the year ended 31st December 2018.

- more -Page 23
13. 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 2019 and the year ended 31st December 2018
are as follows:
Unlisted
investments
US$m
At 1st January 2019
Additions

9.1
1.4

At 30th June 201910.5

At 1st January 2018
Disposals

9.3
(0.2)

At 31st December 2018

9.1

(ii) Financial instruments that are not measured at fair value
The fair values of current debtors, bank and cash balances, current creditors, current
borrowings and current lease liabilities 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.
14. RELATED PARTY TRANSACTIONSIn the normal course of business, the Group undertakes a variety of transactions with certainof its associates and joint ventures.
The most significant of such transactions are management fees of US$7.3 million(2018: US$7.3 million) received from the Group’s six (2018: 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
as appropriate.

- more -Page 24

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 103 and 104 of the Company’s 2018 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
Craig Beattie
Directors- more -Page 25

The interim dividend of US¢1.50 per share will be payable on 17th October 2019 toshareholders on the register of members at the close of business on 23rd August 2019. The
shares will be quoted ex-dividend on 22nd August 2019, and the share registers will beclosed from 26th to 30th August 2019, 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 2019 interim dividend by notifying the United Kingdom transfer agent in writing by
27th September 2019. The Sterling equivalent of dividends declared in United States
Dollars will be calculated by reference to a rate prevailing on 2nd October 2019.
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 23rd August 2019, 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 22nd August 2019.
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 32
hotels and six residences in 23 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$5.8 billion as at 30th June 2019.
Mandarin Oriental’s aim is to be recognised as the world’s best luxury hotel group. This will
be achieved by investing in the Group’s exceptional facilities and its people, and seeking
selective opportunities for expansion around the world, while maximising profitability andlong-term shareholder value. The Group regularly receives recognition and awards foroutstanding service and quality management. The Group is committed to exceeding its guests’
expectations through exceptional levels of hospitality, while maintaining its position as aninnovative 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 26
For further information, please contact:
Mandarin Oriental Hotel Group International Limited
James Riley / Craig Beattie
Sally de Souza(852) 2895 9288
(852) 2895 9167

Brunswick Group Limited
David Ashton(852) 3512 5063

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.