The Board of Directors of Kerzner International has approved a share repurchase program authorizing the company to purchase up to two million of its ordinary shares, the company said in a release.
As of last Thursday, the company had 36.3 million shares outstanding, according to the release.
The company said the repurchases will be made at management’s discretion from time to time in the open market through block trades or otherwise.
It also said that depending on market conditions and other factors, share repurchases may be commenced or suspended at any time or from time to time without prior written notice.
But the company in its release did not explain why it took such action.
Omar Palacios, vice president of Investor Relations, however, explained in an interview with The Bahama Journal from his Florida office that, “It’s a move that really puts us in a position as many of our peer companies that have repurchase programs in place at the current time.
“What it means is that the company would have the opportunity to repurchase shares from time to time in the sector. It does not mean that it has committed to purchase any amount. What it does signify is the company, if it believes an opportunity exists, would attempt to buy back shares, but I would not go as far as to say that we will bluntly go out and buy a significant amount of shares.
“It´s two million shares on a total of 36 million shares outstanding. The plan would be to do this over an extended period of time. What´s happened is the gaming, lodging and leisure industries have been very strong sectors and there´s an expectation of growth going forward and many companies believe it´s a good chance to buy stock in those companies ahead of time before they realize their full growth potentially, so effectively in many respects it´s a positive signal for growth over the long term.”
Kerzner International´s announcement regarding its share repurchase program came days after the company reported financial results for the second quarter of 2005.
The company reported net income in the quarter of $10.5 million compared to net income of $30.1 million in the same period last year, resulting in diluted net income per share of $0.28 compared to diluted net income per share of $0.94 in the same period last year.
Adjusted net income in the quarter was $37.0 million compared to $29.7 million in the same period last year. Adjusted net income per share in the quarter was $0.98 compared to $0.92 in the same period last year. Adjusted earnings per share primarily excludes $25.0 million, or approximately $0.67 per share, attributable to an impairment charge against the Company’s subordinated notes receivable from the entity that owns the One&Only Maldives at Reethi Rah Island.
Adjusted net income also excludes $1.4 million of pre-opening expenses, most of which is associated with the opening of Marina Village at Atlantis. Adjusted net income includes a $4.8 million, or $0.13 per share, provision that the Company has taken to reflect a new claim from a supplier with respect to a period covering the last five years.
Kerzner operates the Atlantis Resort on Paradise Island and is developing a similar property in Dubai. The company also developed and receives certain income from Mohegan Sun in Uncasville, Connecticut.
By: Candia Dames, The Bahama Journal
