Financials

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Income Statement

Balance Sheet

Click here to view 1Q 2008 Results
Click here to view FY 2007 Results

Review of Performance

A) Revenue

B) Profitability

Business Segments Review

i) Hotel Investment segment
Hotel Investment revenue increased by S$11.6 million or 18% from S$65.4 million in 1Q07 to S$77.0 million in 1Q08. This increase was mainly due to strong performance from Laguna Phuket resorts, higher revenue contribution from Banyan Tree Bangkok after completion of its refurbishment in 2007 and higher revenue contribution from Angsana Velavaru where the rebranding and renovated rooms were able to command higher room rates. In addition, there were additional revenue from the newly opened Banyan Tree Madivaru (opened in May 2007) and Angsana Riads Morocco (opened in December 2007).

Laguna Phuket resorts recorded revenue of S$49.2 million for 1Q08, a S$6.5 million or 15% increase in revenue against last year largely attributed to higher occupancies and average room rates. Maldives resorts reported a combined revenue of S$15.3 million, S$2.3 million or 18% increase against last year mainly due to contribution from the rebranded Angsana Velavaru and the newly opened Banyan Tree Madivaru. Banyan Tree Lijiang and Banyan Tree Ringha recorded a combine revenue of S$2.0 million, an increase of S$0.7 million. Angsana Riads Morocco, the first property in North Africa, contributed a maiden S$0.5 million in revenue in the current quarter.

EBITDA increased by S$5.6 million or 20% from S$28.3 million in 1Q07 to S$34.0 million in 1Q08, in line with the higher revenue.

ii) Hotel Management segment
Hotel management revenue decreased by S$0.1 million or 5% from S$3.1 million in 1Q07 to S$3.0 million in 1Q08 mainly due to lower club management fees partially offset by higher hotel management fees from Banyan Tree Seychelles due to additional 6 two-bedroom double pool villas being added to the hotel inventory in 2Q07 and management fees from Banyan Tree Bahrain which opened in April 2007.

Loss before interest, tax, depreciation and amortisation ("LBITDA") in 1Q08 was S$0.5 million compared with an EBITDA of S$0.04 million in 1Q07. If we were to include management fees of those resorts which we have a majority interest and therefore were eliminated on consolidation which amounted to S$4.8 million in 1Q08 and S$4.1 million in 1Q07, EBITDA would be S$4.3 million in 1Q08, S$0.2 million higher than 1Q07.

iii) Spa segment
Spa revenue increased by S$1.2 million or 20% from S$6.0 million in 1Q07 to S$7.2 million in 1Q08 mainly due to higher revenue from spa outlets in Thailand, China, Egypt and Dubai.

EBITDA however, decreased by S$0.6 million or 36% from S$1.7 million for 1Q07 to S$1.1 million in 1Q08 mainly due to loss on disposal of fixed asset following the closure of a spa outlet in Sydney, Australia.

iv) Property Sales segment
Property sales revenue was higher by S$3.4 million or 18% from S$19.3 million in 1Q07 to S$22.7 million in 1Q08. This was mainly due to sales and revenue recognition of Laguna Village Villas, Townhomes phase 2 and Bungalows phase 3 & 4. The increase was partially offset by lower sales of holiday vacation club memberships at Phuket and Bangkok branches.

As a result of the higher revenue, EBITDA increased by S$0.8 million or 12% from S$6.7 million in 1Q07 to S$7.5 million in 1Q08.

(v) Hotel Residences Sales segment
Hotel Residences revenue increased by S$11.7 million or 351% from S$3.3 million in 1Q07 to S$15.0 million in 1Q08 mainly due to sales and revenue recognition of 26 units of Dusit Villas, 6 units of Banyan Tree Lijiang Villas/Townhouses and 2 units of Banyan Tree Bangkok Suites.

EBITDA increased by S$6.0 million or 357% from S$1.7 million in 1Q07 to S$7.7 million in 1Q08 in line with the higher revenue.

vi) Gallery Sales segment
Revenue from Gallery Sales increased by 25% from S$2.4 million in 1Q07 to S$3.0 million in 1Q08 but EBITDA decreased by S$0.1 million or 24% from S$0.6 million in 1Q07 to S$0.5 million in 1Q08 mainly due to higher traveling and other expenses incurred to set up new Point-of-Sales system in various outlets.

vii) Design Fees and Others segment
Design fees and Others segment revenue decreased by S$0.8 million or 14% from S$5.4 million in 1Q07 to S$4.6 million in 1Q08 mainly due to lower fees billed for projects in this quarter based on certain design milestones and partially offset by higher revenue from golf operations.

Loss before interest, tax, depreciation and amortisation ("LBITDA") in 1Q08 was S$2.5 million compared with an EBITDA of S$1.3 million in 1Q07 mainly due to lower revenue as mentioned above and increased headcounts and operating expenses to support the expansion growth in this segment.

viii) Head Office
Head office expenses increased by S$0.7 million from S$3.8 million in 1Q07 to S$4.5 million in 1Q08. This was mainly attributable to increased headcounts and higher business development expenses, as the group continues its global expansion.

ix) Other Operating Income (net)
Other Operating Income (net) increased by S$6.8 million from S$0.1 million in 1Q07 to S$6.9 million in 1Q08 mainly attributed to interim compensation fees in relation to Tsunami.

Commentary

1Q08 results have been in line with our expectation. Although we are in a period of uncertainty in the world economy and global financial markets, there has so far been no material negative impact on our hotel operations. Barring unforeseen circumstances, we therefore remain cautiously optimistic on the performance of the Group in the next few quarters.

Real Estate Development fund

Banyan Tree Indochina Hospitality Fund

In January 2008, Banyan Tree set up its first US$400 million Indochina Hospitality Fund to finance resort development in Hue, Vietnam. The first closing of US$100 million took place in February and the second round of capital raising is now underway. The final closing is expected to take place before the end of the year. Based on initial road show carried out in the Middle East recently, there continues to be investor interest in the Indochina Fund.

Hotel Operations

In general, hotel bookings for the traditional soft second quarter remain reasonably healthy.

The rebranded Angsana Velavaru (79 keys) which completed its final phase of renovation of its land villas in December 2007, achieved strong occupancy in the 1st quarter and is expected to contribute positively in 2008.

We expect to see full year contribution of 6 (40 keys) Angsana Riads Collection in Morocco which was officially launched in December 2007.

In second half of 2008, Dusit Laguna Phuket will have an additional 28 two bedroom pool villas added to its existing inventory.

Hotel Residences/ Property Sales

The response to our sales of properties during the first quarter of 2008 has been positive.

For Hotel Residences/Property Sales, we sold a further 43 units totaling S$67.4 million in 1Q08 as compared to 30 units totaling S$28.0 million in 1Q07. We have a total of S$107.4 million unrecognised revenue as at 1Q08 as compared to S$55.2 million as at 1Q07 and will be progressively recognizing revenue on percentage of completion basis as construction progresses in 2008.

Management, Spa and Design Income

The outlook is positive with strong pipeline of new management contracts coming on-stream in the next few years. We will see maiden contribution from Banyan Tree Sanya (Hainan) (61 villas) and Angsana Hotel & Suites Dubai (UAE) (417 keys) which are expected to open in the next two quarters.

Also in the next few quarters, we expect to launch an estimated 11 spas under our management.

New Projects

We have in the pipeline close to 50 resorts slated to be opened in the next four years which we have already announced in previous quarters. In recent months, we have also signed the following contracts:

• Banyan Tree Macau, 238 suites and 13 villas and is expected to open in 2010.
• Banyan Tree Tianjin, China, 220 villas and is expected to open in 2011.
• Angsana St Lucia is currently in design stage. Number of keys and opening date have yet to be determined.