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UPDATE 2-Millennium & Copthorne Q3 lifted by currency effect

Published 11/06/2008, 03:18 AM
Updated 11/06/2008, 03:20 AM

* Q3 pretax profit up 4.2 percent

* Q3 RevPAR up 4 percent on constant currency basis

* RevPAR down 3 percent in first 4 weeks of October

* Strategy to mitigate decline in Q4 profitability

(Adds further detail)

LONDON, Nov 6 (Reuters) - Hotelier Millennium & Copthorne reported a 4.2 percent increase in third-quarter pretax profit on Thursday as the favourable impact of currency movements offset worsening economic conditions.

M&C, which operates over 100 upmarket hotels around the world, said pretax profit for the three months to Sept. 30 increased by 4.2 percent to 30 million pounds ($47.54 million), benefiting from a 900,000 pound currency boost.

The group said revenue per available room (RevPAR), the hotel industry's main measurement of performance, grew by 4 percent during the quarter on a constant currency basis.

M&C said it had managed to achieve both revenue and earnings growth during a "turbulent quarter".

"We have been vigilant in controlling costs and have taken steps to react to changing market conditions," said Chairman Kwek Leng Beng.

He added that the group's plans for cash conservation and profit protection should "serve to mitigate any potential decline in the group's profitability in the fourth quarter of 2008 and beyond".

The group said RevPAR had declined by 3 percent year-on-year in October, partly as a result of strong growth in the same period last year.

M&C also said it has a strong balance sheet and low gearing, giving it the ability to "react quickly to any market opportunities".

Singapore-based City Developments, which is part owned by property tycoon Kwek Leng Beng, owns 53.5 percent of M&C.

Shares in M&C have underperformed the FTSE All Share Travel & Leisure Index by 22 percent over the last twelve months on fears over the deteriorating trading environment. (Reporting by Matthew Scuffham, editing by Will Waterman and Chris Wickham)

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