Thu | Jan 18, 2018

Courtyard does nearly $1b of business in year one

Published:Friday | March 10, 2017 | 12:00 AMSteven Jackson
The Courtyard Marriott Hotel in New Kingston.
Stephen Phillibert, CFO of PanJam Investment Limited.

The Courtyard by Marriott hotel in New Kingston racked up nearly $1 billion in revenues, in its first year of operation, and provided a small boost to PanJam Investment's bottom line.

PanJam, which is in the business of real estate and investments, built the hotel as a joint-venture project with Costa Rican partners, through Caribe Hospitality Jamaica Limited. That associated company earned $83 million in net profit at year end December 2016, which wiped out a $25.8 million loss a year earlier. Revenues generated by the hotel totalled $997 million.

"We are pleased with the performance, which did exceed budgetary expectations," said PanJam chief financial officer Stephen Phillibert via email.

PanJam holds a 32 per cent stake in the venture. The 129-room hotel opened its doors officially on December 1, 2015. It also holds other hotel developments in downtown Kingston, Canada and the United States. It categorises these investments as Downing Street Fund II, V and VII.

Fund II made net profit of $18.3 million, while Fund V made a loss of $903,000 for 2016. Both are based in Canada. As for Fund VII, which is yet to report revenues, PanJam contributed capital expenditure of $390 million to that project.

The property conglomerate also continues upgrades to the former Oceana Hotel on the Kingston waterfront, which it acquired in 2014 from the Urban Development Corporation.

Overall, PanJam increased its annual net profit by a third to $4.35 billion, from $3.25 billion in 2015.

"It is in fact the fifth straight year of record profit," Phillibert said.

Revenue from operations, at $1.7 billion, dipped slightly from $1.8 billion a year earlier. Core property revenue also declined to $1.38 billion from $1.48 billion due, in part, to vacancies and depreciation of the local currency. However, net profit is up due to a $3.6-billion infusion from its share of returns from associated companies, up 14 per cent from $3.2 billion the year prior.

The returns came mostly from its investments in other companies - mainly its near one-third interest in Sagicor Group Jamaica which generated revenues of $59.7 billion and pretax profit of $14 billion in 2016 - but PanJam also booked a gain of $851 million from disposals of its interest in Mavis Bank Coffee Factory and Hardware & Lumber Limited.

PanJam's other investments include a 20 per cent stake in Chukka Caribbean Adventures Limited, a 25 per cent stake in Walkerswood and Busha Browne's spices through New Castle Company Limited, and a 50 per cent interest in Kingchurch Property Holdings Limited, through which the former Oceana Hotel is being redeveloped.

Last year, PanJam hired a consultant to guide the company in deciding a name for the hotel. But to date, "no decision has been taken" as yet as to branding, Phillibert said.