Castle Group expansion hurts quarterly earnings
The Honolulu-based holding company for Castle Resorts & Hotels said net income plunged 92.7 percent in the third quarter but that revenue continued to climb as it expanded its property contract portfolio.
Castle Group Inc.
said over the past six months it has rapidly expanded its property contract portfolio to include the Ocean Resort Hotel Waikiki, the Maile Sky Court in Honolulu, the Hotel Santa Fe on Guam, and both the Kata Gardens and Katamanda Villas in Phuket, Thailand.
Net income fell to $15,323, or 0 cents a share, versus $208,858, or 2 cents a share, a year ago due to Castle investing in resources necessary to service additional contracts that began this quarter and will continue through 2008.
Revenue rose 9.5 percent to $6 million compared with $5.5 million a year ago. Revenue from properties rose 8.5 percent to $4.9 million from $4.5 million while management and service revenue grew 13.3 percent $1 million from $918,897.
"The considerable growth in revenues for the quarter and the year to date reflect the significant growth in the number and scope of property management and services contracts the company has recently secured," Castle Group Chief Financial Officer Howard Mendelsohn said.
Revenue for the first nine months rose 6.2 percent to $16.7 million from $15.8 million. The company had a net loss during that period of $134,357, or 1 cent a share, compared with net income of $418,480, or 4 cents a share, a year earlier.
Mendelsohn said that over the last several months that Castle has adopted a strategic plan to further expand in Hawaii, Micronesia, New Zealand and Thailand, as well as in other regions throughout the Pacific and Asia.
"One of our most exciting growth targets is Thailand, which is one of the fastest-growing large market tourist destinations in the Pacific," Castle Chairman and Chief Executive Rick Wall said.