| HAMILTON, Bermuda, February 25, 2008 -
Fourth Quarter 2007 highlights
-
Fourth quarter total revenues of $151.2 million, up 12% over prior year
-
Fourth quarter net earnings from continuing operations of $10.2 million,
up 53% over prior year
-
EPS from continuing operations of $0.24. Adjusted EPS of $0.25
-
World-wide same store RevPAR up 10% in local currency, 14% in U.S. dollars
-
Completed acquisition of land to develop a new '21' hotel in New York
-
Completed takeover of Hotel das Cataratas, Iguacu Falls, Brazil
Full-Year highlights
-
Full-year total revenues of $599.6 million, up 21% over prior year
-
Full-year net earnings from continuing operations of $50.3 million, up
37% over prior year
-
EPS from continuing operations of $1.19. Adjusted EPS of $1.25
-
Full-year EBITDA of $154.1 million up 13%, adjusted EBITDA up 19% over
prior year
-
World-wide same store RevPAR up 11% in local currency, 15% in U.S. dollars
-
Accelerated acquisitions of The Royal Scotsman and Afloat in France businesses
in Europe
-
Acquired land to build a hotel in Buzios, Brazil
Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com),
owners or part-owners and managers of 51 luxury hotels, restaurants, tourist
trains and river cruise properties operating in 25 countries, today announced
its results for the fourth quarter and full year ended December 31, 2007.
For the fourth quarter, Orient-Express realized a GAAP net loss of $4.9
million (loss of $0.12 per common share) on revenue of $151.2 million compared
with net earnings of $6.7 million ($0.16 per common share) on revenue of
$135.2 million in the prior year period. Adjusted net earnings from continuing
operations which exclude certain items, including an impairment charge
related to a strategic review of Bora Bora Lagoon Resort, were $10.4 million
($0.25 per common share) for the quarter, compared to adjusted net earnings
from continuing operations of $9.2 million ($0.22 per common share) the
previous year. Revenue was up 12% over the fourth quarter of 2006.
For the year ended December 31, 2007 net earnings were $33.6 million
($0.79 per common share) compared with net earnings of $39.8 million ($0.98
per common share) in 2006. Revenue increased 21% from $497.1 million in
2006 to $599.6 million in 2007. Same store RevPAR increased 15% (11% in
local currency) and EBITDA rose 13% from $136.7 million to $154.1 million.
Adjusted net earnings from continuing operations were $53.0 million ($1.25
per common share) compared to adjusted net earnings from continuing operations
of $41.4 million ($1.02 per common share) in 2006. Adjusted EBITDA was
$155.2 million, an increase of 19% over 2006.
Adjusted EBITDA for the quarter was $31.0 million compared with $32.9
million for the same period in 2006. The 2007 results were impacted by
the unforeseen conflict in Burma which resulted in EBITDA $1.9 million
lower than for the same period in 2006. Additionally, the 2006 EBITDA included
asset sales of $1.1 million and insurance credits of $2.7 million.
"We are extremely pleased to see that the luxury market continues to
show strength, as reflected in Orient-Express' year-end and fourth quarter
results," said Orient-Express Hotels President and CEO, Paul White. "We
believe that there will continue to be numerous opportunities for growth
through acquisitions of properties, as well as through strategic organic
expansion into key geographic markets."
Business Highlights
Orient-Express continues to show strong progress in its existing pipeline
of new properties, including those in Santa Barbara, California; New York;
Brazil; Bali; and Peru, with properties progressing well within their schedules.
The most imminent opening is of Las Casitas del Colca, the luxury 20-room
lodge in Peru's Colca Canyon, which is scheduled to open on time in April
2008.
In Brazil, the company is reviewing some exciting contemporary designs
for its planned boutique hotel and villa development in Buzios. Work is
scheduled to begin shortly on the renovation of the first 100 rooms at
Hotel das Cataratas at Iguacu Falls, of which the company took over management
in October 2007.
In 2007, the company opened the purpose built spas at The Inn at Perry
Cabin in St Michaels, Maryland and at the Copacabana Palace in Rio de Janeiro,
Brazil. The Copacabana Palace will be the site of a 'destination bar' which
is scheduled to open in the second half of 2008. Next month, the Librisa
Spa at the Mount Nelson Hotel in Cape Town, South Africa, will be opening.
All of these projects reflect Orient-Express' commitment to continue to
focus on revenue growth across property types and regions.
The company also made significant investments in existing room stock
and property enhancement last year and this will continue into the first
quarter of 2008. These investments include the opening of eight new suites
at La Residencia, Majorca; the establishment of the Windsor Court Club
Floors comprising 59 rooms and suites over four floors at the hotel in
New Orleans; the renovation of Casa Limon and the new restaurant Andanza
at Casa de Sierra Nevada in San Miguel de Allende, Mexico; the second phase
renovation of room stock at the Grand Hotel Europe in St Petersburg, Russia;
renovation of 12 rooms in the 48-room Governor's Residence in Rangoon,
Burma; and the creation of four new suites and junior suites at Hotel Cipriani
in Venice, Italy. The company expects all of these projects to bring additional
guests and revenue to the various properties in both the short and longer
term.
The company's Real Estate developments in St. Martin continue to move
ahead on plan, with one of the seven villas being built at La Samanna scheduled
to be ready for occupation in the third quarter. The Cupecoy Yacht Club
development is progressing well, with construction forecasts showing completion
on time and within budget. The company is now beginning the process of
letting retail, restaurant and marina space.
Following a strategic review of the company's assets, it has been decided
to initiate a sale of Bora Bora Lagoon Resort. Net earnings reflect an
impairment charge to bring the property to current fair market value. This
impairment charge and the net earnings of the operation for 2007 and 2006
are shown in discontinued operations net of tax. The amount included in
discontinued operations, net of tax, was a loss of $16.6 million for the
year 2007 and a gain of $3.1 million in 2006.
"As we described to our shareholders in our November investor day meeting,
we have conducted strategic reviews of all our assets and set out specific
plans for enhancing or divesting them based on their fit within our long-term
objectives," continued Paul White. "While our prime focus is on increasing
returns on core properties and other assets, as well as select acquisitions,
we will give consideration to disposing of properties which do not fit
our plans or otherwise merit further investment. Bora Bora is the most
recent example of that process."
Regional Performance
In the quarter overall, same store RevPAR growth was up 14% in U.S.
dollars (10% in local currency), while for the year, same store RevPAR
increased 15% in U.S. dollars (11% in local currency). These increases
were driven entirely by rate with Europe showing the strongest RevPAR growth
in the fourth quarter of 21% in U.S. dollars (12% in local currency), compared
with the Rest of World RevPAR growth of 15% in U.S. dollars (12% in local
currency) while the North America region was flat.
Europe: For the fourth quarter, revenues were up 28% from $34.2 million
in 2006 to $43.7 million in 2007. EBITDA increased $1.4 million or 46%
to $4.6 million. The Italian hotels were substantially closed in the fourth
quarter. All other properties in the region showed solid revenue growth
with the Hotel de la Cite, Carcassonne, France; The Grand Hotel Europe,
St Petersburg, Russia; and La Residencia, Majorca performing significantly
ahead of their respective 2006 results. For the year, EBITDA grew 35%,
or $18.3 million to $71.0 million. Every European property contributed
to this growth, underpinned by same store RevPAR growth of 17% in U.S.
dollars (10% in local currency).
North America: EBITDA of owned hotels was $2.9 million in the fourth
quarter, down $2.7 million on the 2006 result of $5.6 million. The 2006
results included business interruption insurance proceeds of $2.7 million
for Maroma Resort and Spa in Mexico. For the year, EBITDA decreased $6.4
million to $13.2 million, due primarily to the performance of the Windsor
Court hotel in New Orleans.
Southern Africa: EBITDA in South Africa grew $0.5 million to $5.0 million
in the fourth quarter, primarily due to better earnings at the Mount Nelson
Hotel. Orient-Express Safaris also experienced another strong quarter in
this region, with EBITDA growing 97% to $0.6 million. For the full year,
EBITDA grew 28% to $13.5 million, with all five properties showing growth.
South America: Revenues at the South American properties grew 40% to
$17.3 million in the fourth quarter, which included $2.0 million from Cataratas,
which recorded a loss at the EBITDA level. Net of that loss, EBITDA declined
$0.6 million to $4.7 million for the quarter. For the year, EBITDA was
$14.0 million, down $1.1 million on the same period in 2006. The shortfall
was a combination of the impact of the strong Brazilian Real on earnings
in Brazil and the impact of the Cataratas acquisition.
Asia Pacific: EBITDA for the region was flat compared to 2006. The conflicts
in Burma were reflected in a poor quarter for The Governor's Residence
which offset good growth for the Observatory Hotel. EBITDA for the year
was $2.1 million ahead of 2006. Every hotel in the region showed growth
with the exception of The Governor's Residence.
Hotel management and part-ownership interests: Fourth quarter EBITDA
was $6.4 million compared with $5.6 million in the year earlier period.
Hotel Ritz Madrid and the hotels in Peru were largely responsible for these
gains. For the full year, EBITDA grew 20% to $23.8 million. Half of this
growth was derived from the performance of the Hotel Ritz, Madrid.
Restaurants: EBITDA was $2.6 million compared with $4.1 million in the
same quarter last year. The 2006 result included a gain on sale of assets
of $1.1 million. For the year as a whole, the combination of the asset
sales and the absence of earnings from Harry's Bar in the first half of
the year, when compared to 2006, saw EBITDA contract by $2.0 million to
$4.6 million.
Tourist trains and river cruises: This sector of the business had an
exceptional year, with a fourth quarter EBITDA of $6.1 million, compared
to $5.8 million in the prior year period. Improvements from all areas of
the portfolio were partially offset by the impact of the crisis in Burma
on the Road to Mandalay. For the full year, EBITDA grew 39% to $25.5 million,
this growth being underpinned by the excellent performance of all of the
train products.
Real Estate: In the fourth quarter, Cupecoy Yacht Club recorded an EBITDA
of $1.6 million, compared to a loss of $0.1 million in the same period
in 2006. In the fourth quarter of 2006, the company sold the sample villa
at St. Martin and there were 4 lot sales at Keswick. There were no lot
sales recorded in the fourth quarter of 2007. Full year EBITDA was $4.1
million, up 17% on 2006. This was primarily due to the Cupecoy Yacht Club.
Tax: The company's reported tax rate for the full year was 29%, inclusive
of FIN 48 credits of $7.1 million. This led to the company recording a
tax credit of $0.4 million in the fourth quarter.
The appointment of Martin O'Grady as Chief Financial Officer in March
2008, which was announced in late 2007, completes the realignment of the
Orient-Express' senior management team.
The company noted that it expects business fundamentals to remain consistent
with expectations, and that 2008 full year guidance on both RevPAR and
EBITDA remain unchanged.
Reconciliation and Adjustments
$'000 - except per share
Three months
Twelve months
amounts
ended
ended
December 31
December 31
2007 2006
2007 2006
EBITDA
30,489 32,019 154,128
136,677
Adjusted items:
Management restructuring and
related charges (1)
501 -
3,352 -
Insurance related gain (2)
- -
(2,312) -
UK pension closure costs (3)
- 841
- 841
Gain on asset sales (4)
- -
- (6,619)
Adjusted EBITDA
30,990 32,860 155,168
130,899
US GAAP reported net earnings
(4,933) 6,657
33,642 39,767
Discontinued operations net
of tax
15,156 39
16,621 (3,102)
Net earnings from continuing
operations
10,223 6,696
50,263 36,665
Adjusted items:
Management restructuring and
501 -
3,352 -
related charges (1)
Insurance related gain (2)
- -
(1,664) -
UK pension closure costs (3)
- 841
- 841
Gain on asset sales (net of
tax) (4)
- -
- (3,294)
Forex loss/(gain) net of tax
(5)
(306) (366)
1,096 3,281
Write-off of deferred finance
costs (6)
- 1,671
- 3,546
Depreciation write-off on El
Encanto (7)
- 401
- 401
Adjusted net earnings from
continuing operations
10,418 9,243
53,047 41,440
Reported EPS
(0.12) 0.16
0.79 0.98
Reported EPS from continuing
operations
0.24 0.16
1.19 0.90
Adjusted EPS
0.25 0.22
1.25 1.02
Number of shares (millions)
42.5 42.2
42.4 40.7
1. The company incurred costs in 2007 relating to the
restructuring of senior management made up principally of executive recruitment
fees and additional director, legal and other advisory fees.
2. In 2007, the company recorded a gain on the settlement
of insurance proceeds received for hurricane-damaged assets at Maroma Resort
and Spa.
3. These costs were incurred in 2006 when the company
closed its UK defined benefit pension plan to future benefit accrual.
4. In June 2006, the company sold at a gain its 49% investment
in Harry's Bar in London.
5. Foreign exchange, net of tax, is a non-cash item arising
on the translation of certain assets and liabilities denominated in currencies
other than the reporting currency of the entity concerned.
6. Deferred finance costs were written off in 2006 when
the related indebtedness was refinanced.
7. In 2006, El Encanto closed for extensive renovation
and certain fixtures and fittings were written off.
Management evaluates the operating performance of the
company's segments on the basis of segment net earnings before interest,
foreign currency, tax (including tax on unconsolidated companies), depreciation
and amortization (EBITDA), and believes that EBITDA is a useful measure
of operating performance, for example to help determine the ability to
incur capital expenditure or service indebtedness, because it is not affected
by non-operating factors such as leverage and the historic cost of assets.
EBITDA is also a financial performance measure commonly used in the hotel
and leisure industry, although the company's EBITDA may not be comparable
in all instances to that disclosed by other companies. EBITDA does not
represent net cash provided by operating, investing and financing activities
under U.S. generally accepted accounting principles (U.S. GAAP), is not
necessarily indicative of cash available to fund all cash flow needs, and
should not be considered as an alternative to earnings from operations
or net earnings under U.S. GAAP for purposes of evaluating operating performance.
Adjusted net earnings, adjusted net earnings from continuing
operations, and adjusted E.P.S. are non-GAAP financial measures and do
not have any standardized meanings prescribed by U.S. GAAP. They are, therefore,
unlikely to be comparable to similar measures presented by other companies,
which may be calculated differently, and should not be considered as an
alternative to net earnings, cash flow from operating activities or any
other measure of performance prescribed by U.S. GAAP. Management considers
adjusted net earnings, adjusted net earnings from continuing operations,
and adjusted E.P.S. to be meaningful indicators of operations and uses
them as measures to assess operating performance because, when comparing
current period performance with prior periods and with budgets, management
does so after having adjusted for non-recurring items, foreign exchange
(a non-cash item) and significant disposals of assets or investments, which
could otherwise have a material effect on the comparability of the company's
core operations. Adjusted net earnings, adjusted net earnings from continuing
operations, and adjusted E.P.S. are also used by investors, analysts and
lenders as measures of financial performance because, as adjusted in the
foregoing manner, the measures provide a consistent basis on which the
performance of the company can be assessed.
This news release and related oral presentations by management
contain, in addition to historical information, forward-looking statements
that involve risks and uncertainties. These include statements regarding
earnings outlook, investment plans and similar matters that are not historical
facts. These statements are based on management's current expectations
and are subject to a number of uncertainties and risks that could cause
actual results to differ materially from those described in the forward-looking
statements. Factors that may cause a difference include, but are not limited
to, those mentioned in the news release, unknown effects on the travel
and leisure markets of terrorist activity and any police or military response,
varying customer demand and competitive considerations, failure to realize
hotel bookings and reservations and planned property development sales
as actual revenue, inability to sustain price increases or to reduce costs,
fluctuations in interest rates and currency values, uncertainty of negotiating
and completing proposed capital expenditures and acquisitions, adequate
sources of capital and acceptability of finance terms, possible loss or
amendment of planning permits and delays in construction schedules for
expansion or development projects, delays in reopening properties closed
for repair or refurbishment and possible cost overruns, shifting patterns
of tourism and business travel and seasonality of demand, adverse local
weather conditions, changing global and regional economic conditions, and
legislative, regulatory and political developments. Further information
regarding these and other factors is included in the filings by the company
with the U.S. Securities and Exchange Commission.
Orient-Express Hotels will conduct a conference call on
Tuesday, 26 February, 2008 at 10.00 hrs ET (15.00 GMT) which is accessible
at +1-866-966-9439 (US toll free) or +44(0)1452-555-566 (Standard International
access). The conference ID is 30317904. A re-play of the conference call
will be available until 5.00pm (ET) Tuesday, 4 March, 2008 and can be accessed
by calling +1-866-247-4222 (US toll free) or +44(0)1452-550-000 (Standard
International) and entering replay access number 30317904. A re-play will
also be available on the company's website: http://www.orient-expressinvestorinfo.com.
Orient-Express Hotels Ltd
Three Months ended December 31, 2007
Summary of Operating Results
(Unaudited)
Three months ended
December 31
$'000 - except per share amount
2007 2006
Revenue and earnings from unconsolidated
companies
Owned hotels
- Europe
43,680 34,219
- North America
22,379 22,599
- Rest of World
41,790 33,589
Hotel management & part ownership
interests 6,407
5,567
Restaurants
8,261 8,194
Trains & Cruises
23,724 19,469
Real Estate
4,988 11,606
Total (1)
151,229 135,243
Analysis of earnings
Owned hotels
- Europe
4,556 3,123
- North America
2,859 5,614
- Rest of World
11,900 12,357
Hotel management & part ownership
interests 6,407
5,567
Restaurants
2,645 4,069
Trains & Cruises
6,066 5,787
Real Estate
1,443 2,758
Central overheads
(5,387) (7,256)
EBITDA
30,489 32,019
Depreciation & amortization
(10,471) (9,085)
Interest
(11,359) (11,998)
Foreign exchange
1,138 938
Earnings before tax
9,797 11,874
Tax
426 (5,178)
Net earnings from continuing operations
10,223 6,696
Discontinued operations
(15,156) (39)
Net earnings on common shares
(4,933) 6,657
Earnings per common share
(0.12) 0.16
Number of shares - millions
42.46 42.16
(1) Comprises earnings from unconsolidated companies of
$5,315,000 (2006 - $4,469,000) and revenue of $145,913,000 (2006 - $130,774,000).
Orient-Express Hotels Ltd
Three Months Ended December 31, 2007
Summary of Operating Information for Owned Hotels
Three months ended
December 31
2007 2006
Average Daily Rate
(in U.S. dollars)
Europe
577 478
North America
387 348
Rest of World
323 267
Worldwide
408 340
Rooms Available (000's)
Europe
78 72
North America
56 54
Rest of World
106 106
Worldwide
240 232
Rooms Sold (000's)
Europe
38 36
North America
34 35
Rest of World
68 71
Worldwide
140 142
RevPAR (in U.S. dollars)
Europe
283 236
North America
239 223
Rest of World
207 180
Worldwide
239 208
Change %
Same Store RevPAR
Dollar Local
(in U.S. dollars)
currency
Europe
241 199
21% 12%
North America
215 216
0% 0%
Rest of World
207 180
15% 12%
Worldwide
219 192
14% 10%
Orient-Express Hotels Ltd
Twelve Months ended December 31, 2007
Summary of Operating Results
(Unaudited)
Twelve months ended
December 31
$'000 - except per share amount
2007 2006
Revenue and earnings from unconsolidated
companies
Owned hotels
- Europe
228,522 180,365
- North America
85,411 85,492
- Rest of World
128,771 101,979
Hotel management & part ownership
interests 23,840
19,932
Restaurants
22,638 22,821
Trains & Cruises
90,522 70,342
Real Estate
19,908 16,144
Total (1)
599,612 497,075
Analysis of earnings
Owned hotels
- Europe
71,033 52,708
- North America
13,238 19,652
- Rest of World
35,611 31,615
Hotel management & part ownership
interest 23,840
19,932
Restaurants
4,564 6,530
Trains & Cruises
25,481 18,316
Real Estate
4,121 3,514
Central overheads
(26,072) (22,209)
Gain on sale of investment
- 6,619
Gain on disposal of fixed assets
2,312 -
EBITDA
154,128 136,677
Depreciation & amortization
(38,947) (34,503)
Interest
(45,436) (44,367)
Foreign exchange
917 (4,610)
Earnings before tax
70,662 53,197
Tax
(20,399) (16,532)
Net earnings from continuing operations
50,263 36,665
Discontinued operations
(16,621) 3,102
Net earnings on common shares
33,642 39,767
Earnings per common share
0.79 0.98
Number of shares - millions
42.39 40.69
(1) Comprises earnings from unconsolidated companies of
$21,197,000 (2006 - $17,711,000) and revenue of $578,415,000 (2006 - $479,364,000)
Orient-Express Hotels Ltd
Twelve Months Ended December 31, 2007
Summary of Operating Information for Owned Hotels
Twelve months ended
December 31
2007 2006
Average Daily Rate
(in U.S. dollars)
Europe
686 584
North America
371 325
Rest of World
272 256
Worldwide
428 380
Rooms Available (000's)
Europe
325 298
North America
222 212
Rest of World
408 354
Worldwide
955 864
Rooms Sold (000's)
Europe
187 175
North America
141 148
Rest of World
259 222
Worldwide
587 545
RevPAR (in U.S. dollars)
Europe
396 342
North America
236 227
Rest of World
173 161
Worldwide
263 240
Change %
Same Store RevPAR
Dollar Local
(in U.S. dollars)
currency
Europe
419 357
17% 10%
North America
283 272
4% 4%
Rest of World
189 165
15% 14%
Worldwide
284 248
15% 11%
Orient-Expess Hotels Ltd
Consolidated and Condensed Balance Sheets
(Unaudited)
December 31 December 31
$'000
2007 2006
Assets
Cash
94,365 77,896
Accounts receivable
62,847 71,694
Due from related parties
30,406 19,939
Prepaid expenses
16,115 9,485
Inventories
45,756 34,618
Other assets held for sale
38,807 60,854
Real estate assets
57,157 35,821
Total current assets
345,453 310,307
Property, plant & equipment, net
book value 1,273,956
1,134,811
Investments
147,539 130,042
Goodwill
133,497 117,760
Other intangible assets
21,660 20,149
Other assets
50,722 38,594
1,972,827 1,751,663
Liabilities and Shareholders' Equity
Working capital facilities
64,419 45,107
Accounts payable
30,132 25,017
Due to related parties
- 1,249
Accrued liabilities
62,246 54,285
Deferred revenue
35,545 25,448
Other liabilities held for sale
5,619 4,377
Current portion of long-term debt
and capital 127,795
83,397
leases
Total current liabilities
325,756 238,880
Long-term debt and obligations under
capital 658,615
586,300
leases
Deferred income taxes
119,112 106,598
Other liabilities
34,669 11,007
Minority interest
1,754 1,882
Shareholders' equity
832,921 806,996
1,972,827 1,751,663 |
|
