MCK 2022 Interim Results

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Condensed Interim Income Statement
FOR THE SIX MONTHS ENDED 30 JUNE 2022Restated*
UnauditedUnaudited
6 months6 months
DOLLARS IN THOUSANDSNOTEto 30/06/22to 30/06/21
Revenue83,656 98,360
Cost of sales(32,015) (46,938)
Gross profit51,641 51,422
Other income
2 (c)- 15,870
Administrative expenses(10,628) (10,440)
Other operating expenses(8,839) (9,435)
Operating profit before finance income32,174 47,417
Finance income1,283 819
Finance costs(1,407) (688)
Net finance income(124) 131
Profit before income tax32,050 47,548
Income tax expense(9,113) (8,826)
Profit for the period22,937 38,722
Profit for the period attributable to:
Equity holders of the parent15,403 31,344
Non-controlling interests7,534 7,378
Profit for the period 22,937 38,722
Basic earnings per share (cents)
49.74c24.47c
Diluted earnings per share (cents)
49.74c24.47c
*The comparative information is restated due to change in accounting policy in 2021 (Note 10).
The attached notes form part of, and are to be read in conjunction with, these financial statements.
Page 1

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Condensed Interim Statement of Comprehensive Income
FOR THE SIX MONTHS ENDED 30 JUNE 2022Restated*
UnauditedUnaudited
6 months6 months
DOLLARS IN THOUSANDSNoteto 30/06/22to 30/06/21
Profit for the period22,937 38,722
Items that are or may be reclassified to profit or loss
Foreign exchange translation movements2,656 380
- Tax (expense)/credit on foreign exchange(15) -
2,641 380
Total comprehensive income for the period25,578 39,102
Total comprehensive income for the period attributable to:
Equity holders of the parent18,044 31,725
Non-controlling interests7,534 7,377
Total comprehensive income for the period25,578 39,102
DETAILS OF SPECIFIC RECEIPTS/OUTLAYS, REVENUE/EXPENSES
Classified under:
Administrative expenses
Audit fees(160) (157)
Other operating expenses
Depreciation of Property, Plant & Equipment(3,383) (3,674)
Depreciation of Investment Property(98) (25)
Depreciation of Right-Of-Use Assets (532) (596)
Leasing and rental expenses(342) (81)
Finance income
Interest income1,250 819
Foreign exchange gain- -
Finance costs
Interest expense(1) (92)
Interest expense on lease liability(1,395) (481)
Foreign exchange loss(1) (100)
*The comparative information is restated due to change in accounting policy in 2021 (Note 10).
The attached notes form part of, and are to be read in conjunction with, these financial statements.
Page 2

Millennium & Copthorne Hotels New Zealand Limited a
nd Subsidiaries
Condensed Interim Statement of Changes in Equity
FOR THE SIX MONTHS ENDED 30 JUNE 2022
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Share
Revaluation
Exchange
Accumulated
Treasury
Unaudite
d
Non-controlling
Total
DOLLARS IN THOUSANDS
NOTE
Capital
Reserves
Reserves
Losses
Stock
Total
Interests
Equ
ity
Balance at 1 January 2021
383,266

267,222

(1,699)

94,884

(26)

743,647

99,352

842,999

Prior year adjustment -effect of change of accounti
ng policy
10
-

(267,222)

-

(1,755)

-

(268,977)

(4,040)

(273,017)

Adjusted Openning Balance
383,266

-

(1,699)

93,129

(26)

474,670

95,312

569,982

Fair value movement of assets held for sale
-

-

-

-

-

-

-

-

Movement in exchange translation reserve
-

-

380

-

-

380

-

380

Income and expense recognised directly in equityProfit for the period
-

-

-

31,344

-

31,344

7,378

38,722

Total comprehensive income for the period
-

-

380

31,344

-

31,724

7,378

39,102

Transactions with owners, recorded directly in equi
ty :
Dividends paid to:Equity holders of the parent
5
-

-

-

-

-

-

-

-

Non-controlling interests
-

-

-

-

-

-

(3,753)

(3,753)

-

-

-

(204)

-

(204)

1,539

1,335

Balance at 30 June 2021
383,266

-

(1,319)

124,269

(26)

506,190

100,476

606,666

Balance at 1 January 2022
383,266

0

(2,025)

132,974

(26)

514,189

103,610

617,799

Movement in exchange translation reserve
-

-

2,641

-

-

2,641

-

2,641

Income and expense recognised directly in equity
-

-

2,641

-

-

2,641

-

2,641

Profit for the period
-

-

-

15,403

-

15,403

7,534

22,937

Total comprehensive income for the period
-

-

2,641

15,403

-

18,044

7,534

25,578

Transactions with owners, recorded directly in equi
ty :
Dividends paid to:
Equity holders of the parent
5
-

-

-

(5,537)

-

(5,537)

-

(5,537)

Non-controlling interests
-

-

-

-

-

-

(3,705)

(3,705)

-

-

-

26

-

26

1,349

1,375

Balance at 30 June 2022
383,266

0

616

142,866

(26)

526,722

108,788

635,510

The attached notes form part of, and are to be read
in conjunction with, these financial statements.
Attibutable to Equity Holders of the Group
Movement of non-controlling interests without a cha
nge in control
Movement of non-controlling interests without a cha
nge in control
Page 3

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Condensed Interim Statement of Financial Position
AS AT 30 JUNE 2022UnauditedAudited
as atas at
DOLLARS IN THOUSANDSNOTE30/06/2231/12/21
SHAREHOLDERS' EQUITY
Issued capital
3383,266 383,266
Reserves143,482 130,949
Treasury stock3(26) (26)
Non-controlling interests108,788 103,610
Total equity635,510 617,799
Represented by:
NON CURRENT ASSETS
Property, plant and equipment252,533 245,782
Development properties 213,670 188,508
Investment Properties33,084 23,332
Investment in associates2 2
Total non-current assets499,289 457,624
CURRENT ASSETS
Cash and cash equivalents22,963 58,143
Short term bank deposits158,870 121,496
Trade and other receivables6,904 15,434
Trade receivables due from related parties
6526 -
Inventories1,222 1,272
Development properties10,241 26,827
Total current assets200,726 223,172
Total assets700,015 680,796
NON CURRENT LIABILITIES
Lease Liabilities20,456 15,858
Provision for deferred taxation9,245 9,298
Total non-current liabilities29,701 25,156
CURRENT LIABILITIES
Interest-bearing loans and borrowings- 1,000
Trade and other payables25,856 30,001
Trade payables due to related parties
63,144 3,977
Lease Liabilities2,709 457
Income tax payable3,095 2,406
Total current liabilities34,804 37,841
Total liabilities64,505 62,997
Net assets635,510 617,799
Net Asset Backing before Distributions (cents per share)
The attached notes form part of, and are to be read in conjunction with, these financial statements.
Page 4

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Condensed Interim Statement of Cash Flows
FOR THE SIX MONTHS ENDED 30 JUNE 2022UnauditedUnaudited
6 months6 months
DOLLARS IN THOUSANDSNOTEto 30/06/22to 30/06/21
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided from:
Receipts from customers92,411 99,614
Interest received1,058 1,020
93,469 100,634
Cash was applied to:
Payments to suppliers and employees(41,175) (35,616)
Purchase of development land(19,380) -
Interest paid(1) (101)
Income tax paid(8,518) (9,855)
(69,074) (45,572)
Net cash inflow from operating activities24,395 55,062
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided from/(applied to):
Purchase of property, plant and equipment(3,565) (1,169)
Purchase of investment property(9,850) (5,101)
Proceed from the sale of asset held for sale- 17,000
(Investments in) / Withdrawals from short term bank deposits(37,374) 45,826
Net cash (outflow)/inflow from investing activities(50,789) 56,556
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided from/(applied to):
Repayment of borrowings(1,000) (35,000)
Principal repayment of lease liability(1,647) (700)
Dividends paid to shareholders of Millennium & Copthorne
Hotels New Zealand Ltd
5(5,537) -
Dividends paid to non-controlling interests (3,705) (3,753)
Net cash outflow from financing activities(11,889) (39,453)
Net (decrease)/increase in cash and cash equivalents(38,283) 72,165
Add opening cash and cash equivalents58,143 76,544
Exchange rate adjustment3,103 1,468
Closing cash and cash equivalents22,963 150,177
The attached notes form part of, and are to be read in conjunction with, these financial statements.
Page 5

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Condensed Interim Statement of Cash Flows
FOR THE SIX MONTHS ENDED 30 JUNE 2022Restated*
UnauditedUnaudited
6 months6 months
DOLLARS IN THOUSANDSNOTEto 30/06/22to 30/06/21
RECONCILIATION OF NET PROFIT FOR THE PERIOD
TO CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the period22,937 38,722
Adjusted for non cash items:
(Gain)/Loss on Sale of Fixed Assets2 1
(Gain)/Loss on Sale of Asset Held For Sale
2 (c)- (15,870)
Foreign Exchange (Gain)/ Loss(1) 100
Depreciation of Property, Plant & Equipment3,383 3,674
Depreciation of Right-Of-Use Assets 532 596
Depreciation of Investment Property98 25
Income tax expense / (credit)9,113 8,826
Adjustments for movements in working capital:
Decrease in receivables8,532 1,455
Decrease in inventories50 161
(Increase)/Decrease in development properties(7,635) 23,771
Increase/(Decrease) in payables(2,738) 4,240
Increase/(Decrease) in related parties(1,359) (682)
Cash generated from operations32,914 65,019
Interest paid(1) (101)
Income tax paid(8,518) (9,856)
Net cash inflow from operating activities24,39555,062
Reconciliation of movement of liabilities to cash flows arising
from financing activities
As at 01 January1,000 38,000
Repayment of borrowings(1,000) (35,000)
Financing cash flows(1,000) (35,000)
As at 30 June03,000
*The comparative information is restated due to change in accounting policy in 2021 (Note 10).
The attached notes form part of, and are to be read in conjunction with, these financial statements.
Page 6

Page 7

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Notes to the Condensed Interim Financial Statements
for the six months ended 30 June 2022 (unaudited)

1. Significant accounting policies

Millennium & Copthorne Hotels New Zealand Limited is a company domiciled in New Zealand, registered under
the Companies Act 1993 and listed on the New Zealand Stock Exchange. Millennium & Copthorne Hotels New
Zealand Limited (the “Company”) is a Financial Markets Conduct Reporting Entity in terms of Financial Markets
Conduct Act 2013 and the Financial Reporting Act 2013. The condensed interim financial statements of the
Company for the six months ended 30 June 2022 comprise the Company and its subsidiaries (together referred
to as the “Group”). The registered office is located at level 13, 280 Centre, 280 Queen Street, Auckland, New
Zealand.

The principal activities of the Group are ownership and operation of hotels in New Zealand; residential
development and sale of land in New Zealand; and development and sale of residential units in Australia.

The condensed interim financial statements were authorised for issuance on 10 August 2022.

(a) Statement of compliance

The condensed interim financial statements have been prepared in accordance with New Zealand Generally
Accepted Accounting Practice (NZ GAAP). They comply with NZ IAS 34 Interim Financial Reporting. The
condensed interim financial statements do not include all of the information required for full annual financial
statements.

The accounting policies and methods of computation applied by the Group in these condensed interim financial
statements are the same as those applied by the Group in its financial statements for the year ended 31 December
2021.

(b) Change in accounting policies

The Group changed its accounting policy in respect of the measurement of land and buildings in 2021. See note
10 for further details.


2. Segment reporting

Segment information is presented in the condensed interim financial statements in respect of the Group’s reporting
segments. Operating segments are the primary basis of segment reporting. The Group has determined that its
chief operating decision maker is the Board of Directors on the basis that it is this group which determines the
allocation of resources to segments and assesses their performance.

Inter-segment pricing is determined on an arm’s length basis. Segment results include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected
to be used for more than one period.

Operating segments
The Group consisted of the following main operating segments:
• Hotel operations, comprising income from the ownership and management of hotels.
• Residential land development, comprising the development and sale of residential land sections.
• Investment property, comprising rental income from the ownership and leasing of retail shops and industrial
properties.
• Residential and commercial property development, comprising the development and sale of residential
apartments.

Geographical segments
The Group operates in the following main geographic segments:
• New Zealand
• Australia
Segment revenue is based on the geographical location of the asset. The Group has no major customer
representing greater than 10% of the Group’s total revenue.

Page 8

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Notes to the Condensed Interim Financial Statements
for the six months ended 30 June 2022 (unaudited)

2. Segment reporting - continued

(a) Operating Segments
Hotel Operations
Residential Land
Development
Investment
Property
Residential
Property
Development Group
Dollars in thousands
6 months
to
30/06/22
6 months
to
30/06/21*
6
months
to
30/06/22
6
months
to
30/06/21
6
months
to
30/06/22
6
months
to
30/06/21
6
months
to
30/06/22
6
months
to
30/06/21
6
months
to
30/06/22
6 months
to
30/06/21*
External revenue 27,260 31,069 47,730 61,255 84 16 8,582 6,020 83,656 98,360
Other Income – Note 2(c) - 15,870 - - - - - - - 15,870
Earnings before interest,
depreciation
& amortisation 876 21,125 31,414 28,525 (14) 10 3,911 2,052 36,187 51,712
Finance income 482 327 513 324 - - 288 168 1,283 819
Finance expense (1,404) (686) (2) (2) - - (1) - (1,407) (688)
Depreciation and
amortisation (3,378) (3,669) (1) (1) (98) (25) (4) (4) (3,481) (3,699)
Depreciation of Right-of-use
assets (521) (583) (7) (7) - - (4) (6) (532) (596)
Profit before income tax (3,945) 16,514 31,917 28,839 (112) (15) 4,190 2,210 32,050 47,548
Income tax expense 1,049 (93) (8,937) (8,075) 31 4 (1,256) (662) (9,113) (8,826)
Profit after income tax (2,896) 16,421 22,980 20,764 (81) (11) 2,934 1,548 22,937 38,722

Cash & cash equivalents
and short term bank
deposits 50,451 56,211 75,076 132,450 - - 56,306 37,185 181,833 225,846
Other segment assets 257,403 250,067 198,586 143,850 33,084 8,401 29,107 38,588 518,180 440,906
Investment in associates - - 2 2 - - - - 2 2
Total assets 307,854 306,278 273,664 276,302 33,084 8,401 85,413 75,773 700,015 666,754



Segment liabilities (48,440) (41,067) (1,804) (5,028) - - (1,923) (1,889) (52,167) (47,984)
Tax liabilities (6,824) (8,297) (4,352) (3,807) - - (1,162) - (12,338) (12,104)
Total liabilities (55,264) (49,364) (6,156) (8,835) - - (3,085) (1,889) (64,505) (60,088)



Property, plant and
equipment expenditure 10,625 1,163 - 2 - - 40 3 10,665 1,168
Investment property
expenditure - - - - 9,850 5,101 - - 9,850 5,101
Residential land
development expenditure - - 5,996 9,141 - - - - 5,996 9,141
Purchase of land for
residential land development
- - 19,380 - - - - - 19,380 -


*The comparative information is restated due to change in accounting policy in 2021 (Note 10).

Page 9

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Notes to the Condensed Interim Financial Statements
for the six months ended 30 June 2022 (unaudited)

2. Segment reporting - continued

(b) Geographic Segments New Zealand Australia Group
Dollars in thousands
6 months
to 30/06/22
6 months to
30/06/21*
6 months
to
30/06/22
6
months
to
30/06/21
6 months
to
30/06/22
6 months to
30/06/21*
External revenue 75,074 92,340 8,582 6,020 83,656 98,360
Other Income – Note 2(c) - 15,870 - - - 15,870
Earnings before interest, depreciation
& amortisation 32,285 49,668 3,902 2,044 36,187 51,712
Finance income 995 651 288 168 1,283 819
Finance expense (1,406) (688) (1) - (1,407) (688)
Depreciation and amortisation (3,477) (3,695) (4) (4) (3,481) (3,699)
Depreciation of Right-of-use assets (528) (590) (4) (6) (532) (596)
Profit before income tax 27,869 45,346 4,181 2,202 32,050 47,548
Income tax expense (7,860) (8,166) (1,253) (660) (9,113) (8,826)
Profit after income tax 20,009 37,180 2,928 1,542 22,937 38,722

Cash & cash equivalents and short term bank
deposits 125,527 188,665 56,306 37,181 181,833 225,846
Segment assets 489,073 402,375 29,107 38,531 518,180 440,906
Investment in associates 2 2 - - 2 2
Total assets 614,602 591,042 85,413 75,712 700,015 666,754

Segment liabilities (50,244) (46,135) (1,923) (1,849) (52,167) (47,984)
Tax liabilities (11,176) (12,104) (1,162) - (12,338) (12,104)
Total liabilities (61,420) (58,239) (3,085) (1,849) (64,505) (60,088)

Property, plant and equipment expenditure 10,625 1,165 40 3 10,665 1,168
Investment property expenditure 9,850 5,101 - - 9,850 5,101
Residential land development expenditure 5,996 9,141 - - 5,996 9,141
Purchase of land for residential land
development 19,380 - - - 19,380 -

*The comparative information is restated due to change in accounting policy in 2021 (Note 10).



2 (c) Other income
Other income comprised the gain on sale of assets classified as held for sale (Note 10b).

Page 10

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Notes to the Condensed Interim Financial Statements
for the six months ended 30 June 2022 (unaudited)


3. Share capital


Ordinary shares Redeemable preference shares
Shares $ 000s Shares $ 000s
Total shares issued – fully paid

Balance at 30 June 2021 105,578,290 350,048 52,739,543 33,218
Balance at 30 June 2022 105,578,290 350,048 52,739,543 33,218


Ordinary shares repurchased and
held as treasury stock



Balance at 30 June 2021 (99,547) (26) - -
Balance at 30 June 2022 (99,547) (26) - -


Shares issued – fully paid

Balance at 30 June 2021 105,478,743 350,022 52,739,543 33,218
Balance at 30 June 2022 105,478,743 350,022 52,739,543 33,218



At 30 June 2022, the authorised share capital consisted of 105,578,290 ordinary shares (2021: 105,578,290 ordinary
shares) with no par value and 52,739,543 redeemable preference shares (2021: 52,739,543) with no par value.




4. Earnings per share

The basic earnings per share of 9.74 cents (30 June 2021*: 24.47 cents) is based on the profit attributable to ordinary
shareholders of $15.40 million (30 June 2021
*: $31.34 million) and weighted average number of ordinary shares and
redeemable preference shares outstanding during the period ended 30 June 2022 of 158,218,286 (30 June 2021:
158,218,286).

The redeemable preference shares are included in the computation of earnings per share as they rank equally with
ordinary shares in respect of distributions made by the Company except any distribution in the case of liquidation.

The calculation of diluted earnings per share of 9.74 cents (30 June 2021*: 24.47 cents) is the same as basic earnings
per share.


*The comparative information is restated due to change in accounting policy in 2021 (Note 10).

5. Dividends

The following dividends were paid during the interim periods:


Group
Dollars In Thousands
Unaudited
30/06/22
Unaudited
30/06/21


Ordinary dividend: 3.5 cents per qualifying share (2021: Nil cents) 5,537 -
Supplementary dividend: 0.617647 cents per qualifying share (2021: Nil
cents)

112

-

5,649 -

Page 11

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Notes to the Condensed Interim Financial Statements
for the six months ended 30 June 2022 (unaudited)


6. Related party transactions

Millennium & Copthorne Hotels New Zealand Limited is a 75.78% (2021: 75.78%) (economic interests from both
ordinary and preference shares) owned subsidiary of CDL Hotels Holdings New Zealand Limited which is a wholly
owned subsidiary of Millennium & Copthorne Hotels Ltd in the United Kingdom. The ultimate parent company is Hong
Leong Investment Holdings Pte Limited in Singapore.


At balance date there were related party advances owing from/(owing to) the following related companies:


Group
Dollars In Thousands
Nature of balance Unaudited
30/06/22
Audited
31/12/21
Trade payables and receivables due to
related parties

Millennium & Copthorne Hotels Limited Recharge of
expenses
(3,144) (2,863)

Millennium & Copthorne International
Limited
Recharge of
expenses
& provision of
management and
marketing support



33



67

CDL Hotels Holdings New Zealand Limited Recharge of
expenses
157 96

CDLH (BVI) One Limited Rent payment 336 (1,277)

(2,618) (3,977)

No debts with related parties were written off or forgiven during the period. No interest was charged on these payables
during 2022 and 2021. There are no set repayment terms.


7. Capital commitments

As at 30 June 2022, the Group has entered into contractual commitments for capital expenditure and development
expenditure.


Group
Dollars In Thousands
Unaudited
30/06/2022
Unaudited
30/06/2021
Capital expenditure on property, plant and equipment 1,559 1,076
Development expenditure 15,451 12,888
Capital expenditure on investment properties 3,100 24,675
Land purchases - 56,258

20,110 94,897

As at 30 June 2022, the Group had entered into contractual commitments for development expenditure, and
construction of investment properties. Contractual agreements for the purchase of land are subject to a satisfactory
outcome of the Group's due diligence process, board approval, and OIO approval. Development expenditure
represents amounts contracted and forecast to be incurred in the remainder of 2022 in accordance with the Group’s
development programme.

8. Changes in contingent liabilities and contingent assets since last annual balance sheet date

The Group’s subsidiaries, CDL Investments New Zealand Limited and subsidiary, have been named as respondents
in a judicial review proceeding which was brought by the Applicant, Winton Property Investments Limited, in relation
to a decision of the Overseas Investment Office relating to the Group’s acquisition of land in Havelock North. The
Applicant was seeking, inter alia, an order setting aside the decision of the Overseas Investment Office in respect of
the approval and/or a declaration that Ministers erred at law in making their decision to grant consent. The
proceedings, which were advised to the market in 21 July 2021, were heard in February 2022 and a decision in
favour of the respondents was handed down at the end of March 2022. The Applicant has now filed a notice of
appeal and a hearing has been set down for May 2023 at this stage. The Group will continue to vigorously defend its
position and still considers the likelihood of the applicant being successful as low. It is not possible to determine what
the financial effect would be, if any, should the application be successful.

Page 12

Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Notes to the Condensed Interim Financial Statements
for the six months ended 30 June 2022 (unaudited)


9. COVID-19 employer support

The Group has applied for and received $189,796 in respect of COVID-19 Short-term Absence Payment and Leave
Support Scheme for employees who were self-isolating and were unable to work from home. In the previous period,
the Group received $350 in respect of COVID-19 Short-term Absence payment for an employee.

The employer support payments were applied as a deduction against payroll costs in personnel expenses in
accordance with NZ IAS 20. The personnel expenses are included in cost of sales, administration expenses and other
expenses in the income statement.





Personnel expenses



Group
Dollars In Thousands

Unaudited
6 months to
30/06/22
Unaudited
6 months to
30/06/21
Wages and salaries
14,169 13,567
COVID-19 employer support
(150) -
Employee related expenses and benefits
908 673
Contributions to defined contribution plans
198 252
Increase/(decrease) in liability for long-service leave
(3) (73)
15,12
15,1215,12
15,122
22
2

14
1414
14,
,,
,419
419419
419






10
1010
10. Change in accounting policy



The Group changed its accounting policy in respect of the measurement of land and buildings in 2021. Since the
conversion to NZ IFRS in 2005, the Group have been recording land and buildings at fair value while the immediate
parent and the group worldwide have been carrying land and buildings at cost. The Directors consider the
measurement of hotel land and buildings at cost provides a more reliable, relevant, and consistent measure of the
underlying performance of the Group for the following reasons:
• The costs of running the hotels are more relevant to users than the fair value of the buildings as there is no intention
to sell;
• The key assumptions in the fair value measurement are highly sensitive which makes this a volatile measurement.
This is exacerbated by current market conditions, including the COVID pandemic, and is already subject to
significant judgment; and
• The cost method aligns with the treatment generally applied by similar entities in the market, and hence provides a
more comparable information to users.

The restatement to cost for land and building took effect from 1 January 2005 and the comparatives are restated to
reflect the changes.

The following tables summarise the impacts on the Group’s condensed interim financial statements.

10(a) Condensed Interim Statement of Financial Position as at 30 June 2021







Impact of change in
Impact of change inImpact of change in
Impact of change in

account
accountaccount
accounting
inging
ing

policy
policypolicy
policy




DOLLARS IN THOUSANDS
DOLLARS IN THOUSANDSDOLLARS IN THOUSANDS
DOLLARS IN THOUSANDS




As previously
As previously As previously
As previously
reported
reportedreported
reported

Adjustments
AdjustmentsAdjustments
Adjustments

As Restated
As Restated As Restated
As Restated







SHAREHOLDERS’ EQUITY
SHAREHOLDERS’ EQUITYSHAREHOLDERS’ EQUITY
SHAREHOLDERS’ EQUITY
Reserves 385,925 (262,974) 122,951
Non-controlling interests 104,499 (4,024) 100,475
Others 383,240 - 383,240
Total equity
Total equity Total equity
Total equity



8
88
87
77
73
33
3,
,,
,664
664664
664

(2
(2(2
(266
6666
66,
,,
,998
998998
998)
))
)

606
606606
606,
,,
,666
666666
666







Property, plant and equipment 562,338 (317,571) 244,767
Others 421,987 - 421,987
Total assets
Total assetsTotal assets
Total assets



98
9898
984
44
4,
,,
,325
325325
325

(3
(3(3
(317
1717
17,
,,
,571
571571
571)
))
)

66
6666
666
66
6,
,,
,754
754754
754





Provision for deferred taxation 59,845 (50,573) 9,272
Others

50,816 - 50,816


Total liabilities
Total liabilitiesTotal liabilities
Total liabilities



1
11
110
1010
10,
,,
,661
661661
661

(50
(50(50
(50,
,,
,573
573573
573)
))
)

60
6060
60,
,,
,088
088088
088

Page 13




Millennium & Copthorne Hotels New Zealand Limited and Subsidiaries
Notes to the Condensed Interim Financial Statements
for the six months ended 30 June 2022 (unaudited)



10
1010
10. Change in accounting policy (continued)


10(b) Condensed Interim Income Statement and Other Comprehensive Income for the period ended 30 June 2021







Impact o
Impact oImpact o
Impact of change in
f change inf change in
f change in

account
accountaccount
accounting
inging
ing

policy
policypolicy
policy




DOLLARS IN
DOLLARS IN DOLLARS IN
DOLLARS IN THOUSANDS
THOUSANDSTHOUSANDS
THOUSANDS

NOTE
NOTENOTE
NOTE


As previously
As previously As previously
As previously
reported
reportedreported
reported

Adjustments
AdjustmentsAdjustments
Adjustments

As Restated
As Restated As Restated
As Restated







Other income 2( c ) 10,292 5,578 15,870
Administrative expenses (11,051) 611 (10,440)
Income tax expense (8,655) (171) (8,826)
Others 42,118 - 42,118
Profit for the year
Profit for the yearProfit for the year
Profit for the year





32
3232
32,
,,
,704
704704
704

6
66
6,
,,
,018
018018
018

38
3838
38,
,,
,722
722722
722




Basic earnings per share (cents) 16.02 8.45 24.47
Diluted earnings per share (cents)



16.02 8.45 24.47










Owners of the parent 25,722 6,002 31,724
Non-controlling interests 7,362 16 7,378
Total
TotalTotal
Total

comprehensive income
comprehensive incomecomprehensive income
comprehensive income 33,084
33,08433,084
33,084

6,018
6,0186,018
6,018

39,102
39,10239,102
39,102

---

*The 2021 comparative figures are restated due to the fact that during 2021, MCK changed its accounting policy
relating to the measurement of land and buildings from revaluation to historical cost. Refer to Note 10 of the Financial
Statements for further information.



SHAREHOLDER UPDATE TO 30 JUNE 2022


Dear MCK Shareholders,

We trust that our update for the half year just gone finds you and yours in good health. We are conscious that the
pandemic has not gone away and while it continues to find ways to affect our businesses, we hope that it has not had
the same effect on you.


Operational highlights:

The first half of 2022 has seen a lot of activity and change at MCK. Of note:

--We reopened our Greymouth hotel, which we rebranded from Kingsgate to Copthorne, in March 2022 after twelve
months of intense work. The hotel now has a new restaurant and bar area and 53 refurbished guest rooms.

--In June, we welcomed our new Managing Director Stuart Harrison to his new role with us and a few weeks ago at the
start of July we farewelled Mr. BK Chiu and thanked him for his seventeen years of service to MCK and the wider
group.

--Our managed isolation operations at Grand Millennium Auckland and M Social Auckland came to an end during the
first half of the year and both hotels have now fully reopened for business after a short period of refurbishment.

--Three apartment sales at the Zenith Residences (Sydney) were also recorded.


Results summary

MCK as a group made an unaudited profit before tax and non-controlling interests of $32.05 million for the six month
period ended 30 June 2022 (2021*: $47.55 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 three apartments at the Zenith Residences in Sydney settled during the first six months also contributed
to this result.

MCK has therefore recorded a profit after income tax and non-controlling interests of $15.40 million (2021*: $31.34
million) on group revenue for the period of $83.66 million (2021: $98.36 million). Our earnings per share for the period
decreased to 9.74 cents per share (2021*: 24.47 cps) with the prior year reflecting the impact of a one-off gain of $15.87
million (10.03 cents per share) on disposal from the sale of land in May 2021 (described as other income). MCK’s Net
Tangible Assets per share as at 30 June 2022 was $3.33 per share (2021*: $3.20 per share).


New Zealand Hotel Operations

MCK’s hotel operations saw revenue down year on year at $27.26 million (2021: $31.07 million). These results
reflected the continued government mandated COVID restrictions on travel and gatherings seen between January
through to April this year which had a severe effect on conference bookings in particular as well as domestic travel.

Occupancy for the first half of 2022 was 38.3% (2021: 40.5%) which was proportionate to the location and business
mix of the respective hotels. Domestic and corporate travel locations of Auckland, Palmerston North, Wellington and
Dunedin saw higher levels of occupancy whilst leisure and conference locations such as the Bay of Islands, Rotorua
and Queenstown were severely impacted during the period. Once the restrictions on gatherings and travel were lifted,
we did see a small increase in business in May and June but our customers and the public at large have remained
cautious. The border restrictions have continued to be an impact on the sourcing and availability of employees to fill
available roles. Notably this impacts on the hotels’ ability to be able to sell and service all rooms in a timely manner.

This has resulted in the hotel operations making a pretax loss of $3.95 million (2021*: $0.64 million profit excluding
the one-off item from other income) for the period ended 30 June 2022. EBITDA for the same period excluding the
one-off item from other income was $0.88 million (2021: $5.25 million).

We reiterate what we have said for some time - hotel operations in New Zealand are still challenging. While we do
expect occupancy to steadily increase through to the end of the year barring any change to the current COVID settings,
ongoing staff and skill shortages will continue to act as a hand brake on increasing available inventory as we need to
maintain a balance between how many rooms we can sell and how many rooms we can service. The competition for
skilled labour will remain intense for the foreseeable future.

*The 2021 comparative figures are restated due to the fact that during 2021, MCK changed its accounting policy
relating to the measurement of land and buildings from revaluation to historical cost. Refer to Note 10 of the Financial
Statements for further information.

We have continued with our programme of refurbishment and improvements. In addition to completing the work done
at Copthorne Hotel Greymouth we are also working through refurbishments at Millennium Hotel Queenstown and
Millennium Hotel Rotorua.

The renewal of our lease for the Copthorne Hotel & Resort Bay of Islands for a further term was also completed in this
period and we are working through the scoping of appropriate refurbishment and improvements to the hotel so as to
enhance its 4 star rating. We have also recently announced the renewal of our management lease at Grand Millennium
Auckland and will be working through details with the owners for the further improvement and refurbishment of this
property. Both of these properties are critical to our recovery path and we are pleased to maintain our long-standing
relationship with both of these hotels.


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

CDL recorded a solid result in the first half of 2022 with an unaudited operating profit after tax for the six months ended
30 June 2022 of $22.90 million (2021: $20.75 million). While market conditions have changed considerably over the
last six months, CDL currently remains on track to meet its 2022 target level of sales and revenue having recorded
sales in Auckland and Canterbury.

Australia update:

We recorded three sales comprising two single bedroom apartments and a three bedroom plus studio apartment at the
Zenith Residences, Sydney in the first half of this year.
We continue to be focused on selling down the apartments we continue to hold and we are looking at adjusting our
marketing strategy to increase sales during this year.

Outlook:

We have seen dramatic changes to global economic conditions over the last six months which we could not have
predicted a year ago much less at the start of this year. Ongoing cost pressures and inflation around the world have
and will affect the travel and accommodation sectors globally for the rest of this year and therefore the prospect of an
accelerated recovery path is now very unlikely. Staffing shortages, due to illness or purely through lack of available
employees throughout the workforce in New Zealand, are also having a strong impact. MCK is not immune to those
issues and its hotel operations will continue to be under pressure to find a way back to profitability for at least the next
twelve months on the assumption that there is no return to gathering restrictions before the end of the year.

All that said, we are determined to ensure that we use the current period to our advantage. We believe that we should
continue to reinvest in our properties over the coming months and years to ensure that they are able to perform at their
best when the markets do recover and international travel in particular starts to become more regular again.

The changes to the senior management teams at MCK and CDI come at an opportune time. We will continue to
optimise our operations and position ourselves so that we will be “first in, best dressed” and we will continue to look at
different strategies and potential opportunities going forward.

We therefore still expect 2022 to be a profitable year. That profit will again be driven by our property development
subsidiaries and they will continue to ensure that we remain in the black despite the volatile market conditions.
However, as I said at the beginning, the pandemic and its effects are still with us. There may be more storm clouds
ahead but we are prepared for them should they come.

As always, we remain grateful to our shareholders and stakeholders. Thank you for your support and ongoing loyalty.
We appreciate and value the positive and helpful comments we receive from everyone who stays with us and we look
forward to your next stay very soon.





Colin Sim
Chairman
10 August 2022

---

Name of issuer
Reporting Period
Previous Reporting Period
Currency
Amount (000s)
Revenue from continuing operations$83,656
Total Revenue$83,656
Net profit/(loss) from continuing operations $15,403
Total net profit/(loss) $15,403
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$3.20
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
No Interim has been declared
Results for announcement to the market
Millennium & Copthorne Hotels New Zealand Limited
6 months to 30 June 2022
6 months to 30 June 2021
NZD
Percentage change
(14.95%)
(14.95%)
(50.86%)
(50.86%)
Interim Dividend
10 August 2022
Not applicable
Not applicable
Not applicable
Current period
$3.33
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

---

*The 2021 comparative figures are restated due to the fact that during 2021, MCK changed its accounting policy
relating to the measurement of land and buildings from revaluation to historical cost. Refer to Note 10 of the Financial
Statements for further information.

10 August 2022



VOLATILE MARKETS AFFECT MCK’S 2022 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 2022.

MCK Chairman & Independent Director Colin Sim said that MCK’s results reflected the volatile trading
environment.

“The global events of the last six months have impacted on our recovery path and the ongoing effects of
the pandemic continue to make our business very challenging. Add to that a labour shortage and cost
price inflation and our results for the first half of this year were always going to reflect all of that”, he said.

Mr. Sim did note that the first half of 2022 had been a busy time for MCK.

“We reopened our rebranded Copthorne Hotel Greymouth after twelve months of refurbishment work and
we are progressing well with our works at Millennium Hotel Queenstown. We also renewed our leases at
Copthorne Hotel & Resort Bay of Islands and at Grand Millennium Auckland. Each of these hotels is
critical to our recovery journey”, he said.

Mr. Sim said that the board remained optimistic about the remainder of the year.

“The start of this year has had the government assistance of one hotel fully occupied as an MIQ facility
and some significant development property sales via our ownership in CDLI and KIN. For the hotel
operations over the balance of this year the prospect of the recovery path is dependent on resolving
staffing shortages with the lack of available employees affecting all employers across New Zealand.
Unless there is a return to gathering and travel restrictions, we are reasonably optimistic about the last
quarter of this year and the first quarter of next year”.

“The good news is that our forward bookings for that period are solid and with travel clearly picking up
and flight capacity to New Zealand expected to meet demand, we are hopeful that this improvement will
be reflected in the full year results”, said Mr. Sim.

“Even if there is a return to some restrictions, we expect MCK will be profitable in 2022 and our profit will
be driven by our property development operations once again. As a group, we are determined to stay
firmly in the black despite the storm clouds ahead. We are under no illusions that the pandemic will
continue to have a negative effect on our operations and therefore our profitability but we will be doing
everything we can to deliver the best possible results that we can to our shareholders”, he said.

Summary of results:
• Average hotel occupancy across the Group 38.3% (2021: 40.5%)
• Group revenue $83.66 million (2021: $98.36 million)
• Profit before income tax and non-controlling interests $32.05 million (2021*: $47.55 million)
• Profit after tax and non-controlling interests $15.40 million (2021*: $31.34 million)

ENDS

Issued by Millennium & Copthorne Hotels New Zealand Ltd

Any inquiries please contact:
Stuart Harrison, Managing Director (09) 353 5001
Millennium & Copthorne Hotels New Zealand Ltd