MCK 2021 Interim Results

SHAREHOLDER UPDATE TO 30 JUNE 2021


Dear MCK Shareholders,

Although it is over a year since the last major national lockdowns which affected all of us, the memory of what happened
in 2020 is still fresh and while we are working towards our path to recovery, many of the same things which affected
us last year are things we still have to deal with.

The latest change in Alert Levels for Greater Wellington in June saw over nine hundred room nights cancelled across
our network, over half of which were for the Copthorne Hotel Wellington Oriental Bay, and while the financial impact of
those cancellations was not material to our overall financial performance, it served as a reminder to us that COVID-19
continues to have a significant impact on our employees and our revenue across the country.

The good news is that the work we have put in over the last twelve months to right-size and stabilize our hotels is
working. Although occupancy levels continue to be similar in 2021 to last year, we are seeing some growth in the
domestic corporate and conferences markets as confidence returns to both market sectors and forward bookings for
events are being made. Assuming that there are no major alert level changes, we believe this trend will continue in
the second half of the year and into 2022.

The eight week suspension of the Trans-Tasman Travel Bubble announced recently confirms that we cannot depend
on the Travel Bubble to be a totally reliable source of business. Our domestic markets remain our primary market and
for that reason, our promotions remain focused on New Zealand travelers as we encourage them to visit regions they
have either not explored before or have not been to in a while.

It is clear that international long-haul travel is very unlikely until some time in 2022 and we have based our planning on
that basis. We continue to liaise with our international clients and agents ahead of the time when border restrictions
will be eased.

To our shareholders and stakeholders, we would like to thank you again for the support and positive comments and
feedback you have provided to our employees and about our hotels not only in 2021 but indeed over the past twelve
months. We love hearing from you and we are very grateful for the positivity as we slowly build back to where we were
before.


Results summary

MCK as a group made an unaudited profit before tax and non-controlling interests of $41.36 million for the six month
period ended 30 June 2020 (2020: $26.26 million). The main contributors to these results were sales of residential
sections from our majority-owned subsidiary CDL Investments New Zealand Limited which continues to trade strongly
and the sale of the Copthorne Hotel Christchurch Central land in May 2021. Four apartment sales at the Zenith
Residences in Sydney settled during the last six months also contributed to this result.

MCK has therefore recorded a profit after income tax and non-controlling interests of
$25.34 million (2020: $34.09
million) on group revenue for the period of $98.36 million (2020: $84.74 million). Our earnings per share for the period
decreasing to 16.02 cents per share (2020: 21.55 cps) reflecting the impact of last year’s one-off tax credit from the
Government’s COVID-19 Business Continuity Package. MCK’s Net Tangible Assets per share as at 30 June 2021
which was $4.86 per share (2020: $4.44 per share).


New Zealand Hotel Operations

For the first half of this year, MCK’s hotel operations made a pretax profit of $33,000 (2020: $3.69 million) excluding
the one-off item from other income. EBITDA for the same period excluding the one-off item from other income was
$5.25 million (2020: $8.58 million). These results reflects the lack of two months pre-COVID summer trading seen in
2020, the impact of not having the wage subsidy or other Government support in this period and continued reliance
on the domestic markets for business.

While the result might appear to be marginal, we believe that it is actually satisfactory given the operational levels of
occupancy seen during this period
(2021: 40.5%; 2020: 42.7%) and also takes into the account the impact of the short
lockdown in February in Auckland and the change of alert levels across New Zealand in February and in Wellington in
June. Good occupancies in our regional hotels are being seen but these positive signs need to be balanced with
reduced occupancies in the main centres and increased competition in resort locations.

Hotel operations and management in New Zealand will continue to be challenging for the foreseeable future. Staff and
skill shortages are the biggest issues facing the industry as a whole currently and how to bridge the capacity and skills
gap is a priority for MCK and other operators.

MCK continues to adopt a cautious and conservative approach to its use of resources and expenditure. Financially,
we remain sound with sufficient reserves and balance sheet strength to see out a change in trading conditions should
they occur.

As we announced in April, MCK issued injunction proceedings against the Waitangi National Trust Board in relation to
the renewal of its ground lease for the Copthorne Hotel & Resort Bay of Islands. Matters relating to the renewal are
still being discussed between the parties through their lawyers and it is hoped that matters can be resolved without the
need to proceed to arbitration.

Grand Millennium Auckland and M Social Auckland both continue to undertake managed isolation facility business and
are likely to do so for the remainder of this year. All staff working at both hotels have been fully vaccinated and the
deadline to comply set by the Government was met. We continue to have a positive working relationship with the
Ministry of Business, Innovation and Employment which is the lead government agency for managed isolation and
returnee feedback about their managed isolation stay is for the most part very positive.

Refurbishment work on the public areas and one level of guest rooms commenced at Millennium Hotel Queenstown
and will be completed at the end of Q4 as part of the staged refurbishment of the hotel. A partial reopening of the hotel
was made on 22
nd
July. Work will also commence shortly at Millennium Hotel Rotorua on a selected section of the
hotel. Kingsgate Hotel Greymouth was closed in April ahead of extensive demolition and refurbishment works which
will see the hotel rebranded to Copthorne standard when it reopens in Q4 2021.


CDL Investments New Zealand Limited (‘CDL’) update:

CDL has continued to trade positively in 2021 and recorded an unaudited operating profit after tax for the six months
ended 30 June 2021 of $20.75 million (2020: $13.74 million). Sales in Auckland, Hamilton and Canterbury were
recorded and CDL is on track better its 2020 results which will in turn bolster MCK’s results as well.


Australia update:

We recorded four sales of apartments at the Zenith Residences, Sydney in the first half of the year. We are aiming to
sell additional apartments in the second half of the year and we are currently reviewing our sales strategy as buyers
are showing renewed interest in inner city apartments.


Outlook:

As we said at the start of this update, there are positive signs as confidence returns to the markets and we have reasons
to be optimistic should the current trading environment continue. At our annual meeting of shareholders, we stated
that our focus was on positioning our operations to ensure that we can take advantage of market growth wherever it
arises and whenever it appears. Shareholders can take heart that we are confident that we will be able to achieve this
aim through the projects and other initiatives we are undertaking this year.

However, the Alert Level Changes we have seen already in Auckland and Wellington so far could well be repeated
before the end of the year. While we hope that this will not be the case, the impact of any significant change or even
lockdown could well have a material bearing on any forecast revenue or profit. While we remain confident that MCK
still has sufficient resources to endure a period where trading is not possible at some or all of its New Zealand hotels,
we have factored in the potential effects of such an event or events. We think this is a prudent approach to adopt until
such time as New Zealand’s international borders can be safely reopened and travel to and from New Zealand can
resume to pre-pandemic levels which will not be until some time in 2022 at the earliest.

We are therefore understandably cautious about making statements about the second half of this year and about what
we are forecasting for our year-end results presently. There remains a high degree of uncertainty due to the pandemic
and the Board will be monitoring MCK’s trading patterns, revenue and profitability very closely during the coming
months and will look to provide clearer guidance towards the end of the calendar year.

In the meantime, we look forward to welcoming everyone to our hotels across the country whether it is for leisure or
business. You can be assured of a warm welcome and the very best hospitality we have to offer wherever you choose
to go.


Colin Sim BK Chiu
Chairman Managing Director
2 August 2021

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Name of issuer
Reporting Period
Previous Reporting Period
Currency
Amount (000s)
Revenue from continuing operations$98,360
Total Revenue$98,360
Net profit/(loss) from continuing operations $25,342
Total net profit/(loss) $25,342
Amount per Quoted Equity Security
Imputed amount per Quoted Equity Security
Record Date
Dividend Payment Date
Prior comparable period
Net tangible assets per Quoted Equity Security$4.44
A brief explanation of any of the figures above
necessary to enable the figures to be understood
Name of person authorised to make this
announcement
Contact person for this announcement
Contact phone number
Contact email address
Date of release through MAP
02-Aug-21
Not applicable
Not applicable
Not applicable
Current period
$4.86
Refer to Chairman’s Statement and Media Release
Authority for this announcement
Takeshi Ito – Company Secretary
Takeshi Ito – Company Secretary
+64 9 353 5005
takeshi.ito@millenniumhotels.com
No Interim has been declared
Results for announcement to the market
Millennium & Copthorne Hotels New Zealand Limited
6 months to 30 June 2021
6 months to 30 June 2020
NZD
Percentage change
16.07%
16.07%
(25.66%)
(25.66%)
Interim Dividend

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2 August 2021



STRONG PROPERTY MARKETS BOOST MCK’S 2021 INTERIM RESULTS

New Zealand hotel owner / operator, Millennium & Copthorne Hotels New Zealand Limited (NZX:MCK),
today announced its (unaudited) results for the six months to 30 June 2021:

MCK Chairman & Independent Director Colin Sim said that MCK’s results continue to be helped by its
majority-owned subsidiary CDL Investments New Zealand Limited and property sales at its Zenith
Residences in Sydney.

MCK’s Managing Director Mr. BK Chiu said that MCK’s New Zealand Hotel Operations traded
“satisfactorily under the circumstances”.

“But the reality continues to be that hotel operations in New Zealand will still be difficult in the short to
medium term for everyone. Our difference is that we know our operations well, we manage our cash flow
and we will maintain our strong balance sheet. All of these elements will allow MCK to chart a strong path
to eventual recovery”, he said.

MCK also noted that its planned refurbishment works in Queenstown and Rotorua were progressing and
had been expanded earlier in the year.

“The projects we are undertaking at Millennium Hotel Queenstown and Millennium Hotel Rotorua are vital
to meeting guest needs and client demand and will lead MCK in our forthcoming recovery”, said Mr. Chiu.

Looking at the second half of 2021, MCK said that it was aiming for an overall result which was an
improvement on the previous year.

“CDL Investments is well on track to better its 2020 performance and we are also looking at more sales
at the Zenith Residences in Sydney which will all ensure that MCK as a group remains profitable”, said
Mr. Chiu.

“We have also assumed one or two changes of alert levels or mini-lockdowns in our planning before the
end of the year and we believe our targets are still achievable even if such an event or events were to
happen”, he said.


Summary of results:
• Average hotel occupancy across the Group 40.5% (2020: 42.7%)
• Group revenue $98.36 million (2020: $84.74 million)
• Profit before income tax and non-controlling interests $41.36 million (2020: $26.26 million)
• Profit after tax and non-controlling interests $25.34 million (2020: $34.09 million)

ENDS

Issued by Millennium & Copthorne Hotels New Zealand Ltd

Any inquiries please contact:
B K Chiu, Managing Director
Millennium & Copthorne Hotels New Zealand Ltd
(09) 353 5058