News for the Hospitality Executive
February 23, 2012 --
- Fourth quarter total revenue, excluding real estate, up 10% to $135.9
Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owners or
part-owners and managers of 49 luxury hotel, restaurant, tourist train
and river cruise properties operating in 24 countries, today announced
its results for the fourth quarter ended December 31, 2011.
"The fourth quarter
provided a solid close to a year of good financial and operating
progress for Orient-Express. In 2011, many of our properties achieved
their all time best annual results," said Bob Lovejoy, Chairman and
Interim Chief Executive Officer. "In the fourth quarter we continued to
grow our top line, with total revenue before real estate increasing 10%
compared to the fourth quarter of 2010. The fourth quarter also marked
the eighth straight quarter of growth in revenue and adjusted EBITDA
(both excluding real estate), which increased by 10% and 31%,
respectively, over the same quarter of the previous year.
"During the course
of 2011, we continued to strengthen our balance sheet and were pleased
to achieve by the end of the year our interim goal of a net debt to
adjusted EBITDA (excluding real estate) ratio of less than 5 times.
Since the end of the quarter, this strengthening has continued through
our program of selected disposal of non-core properties. In January
2012, we completed the sale of Keswick Hall, Virginia, for $22.0
million and we repaid $10.0 million of associated debt.
"As we look ahead
to 2012, we are encouraged by our booking patterns, which indicate
continued healthy demand in the luxury travel sector. Total revenue
from owned hotels achieved and on the books for 2012 is currently about
8% above the comparable total at the same time last year."
Fourth Quarter 2011
real estate, was $135.9 million in the fourth quarter of 2011, up $12.2
million or 10% from the fourth quarter of 2010.
Revenue from owned
hotels for the fourth quarter was $107.6 million, up $8.5 million or 9%
from the fourth quarter of 2010. On a same store basis, owned hotels
RevPAR was up 11% in US dollars and up 15% in local currency.
cruises revenue in the fourth quarter was $20.6 million compared to
$17.7 million in the fourth quarter of 2010, an increase of 16%.
before real estate was $21.2 million for the fourth quarter, up 31%
compared to $16.1 million in the prior year. The principal increases
were at Charleston Place, South Carolina (up $1.4 million compared to
the same period in the prior year), Copacabana Palace Hotel, Rio de
Janeiro (up $1.2 million) and share of earnings from Peru hotels (up
$1.3 million). Other notable improvements included La Residencia,
Mallorca (up $0.7 million), share of earnings from PeruRail (up $0.8
million), Reid's Palace, Madeira (up $0.6 million), Hotel das
Cataratas, Iguassu (up $0.6 million), and the Road to Mandalay cruise
ship, Irrawaddy River, Myanmar (Burma) (up $0.6 million).
Adjusted net loss
from continuing operations for the fourth quarter was $9.1 million
($0.09 per common share), compared with a loss of $15.3 million ($0.16
per common share) in the fourth quarter of 2010. Net loss attributable
to Orient-Express Hotels Ltd, after tax-effected impairments of $18.6
million ($0.18 per common share), for the fourth quarter was $28.1
million ($0.27 per common share), compared with a net loss of $26.5
million ($0.27 per common share) in the fourth quarter of 2010.
In December 2011,
following the assignment of purchase and development agreements in
April 2011 relating to the proposed New York hotel project, the Company
completed the sale of excess development rights of '21' Club to the new
developer, recording a gain of $16.0 million. From the gross proceeds,
associated debt of the '21' Club of $4.5 million was repaid.
On January 23,
2012, the Company concluded the sale of Keswick Hall, including the
adjoining golf course and development land, for gross proceeds of $22.0
million and repaid associated debt of $10.0 million. Additionally, the
Company signed a definitive agreement during the fourth quarter of 2011
for the sale of Bora Bora Lagoon Resort for $3.0 million. This
transaction is expected to complete during 2012.
During the quarter,
the Company completed the refurbishment of 26 rooms and suites on the
fifth floor of the main building of the Copacabana Palace Hotel, as
well as its Cipriani restaurant. The renovated restaurant now includes
a chef's table inside the kitchen, providing an intimate dining
experience for six guests. Starting in June 2012, during the hotel's
traditional low season, a further 121 rooms and suites in the hotel's
main building will be renovated and the lobby area enlarged well in
advance of the 2014 football World Cup and 2016 Olympic Games to be
held in Brazil.
Also during the
quarter, 46 keys at La Samanna, St. Martin, were completely refurbished
and reopened in advance of the Caribbean high season. The Company plans
to refurbish the main public areas of La Samanna in the third quarter
of 2012. Additionally, work began in November to upgrade the historic
wing of The Inn at Perry Cabin, Maryland, with 39 rooms scheduled for
refurbishment by the end of the first quarter of 2012.
The Company has
made two recent executive appointments: Ali Kasikci has been appointed
Regional Managing Director for North America, Mexico and the Caribbean
and will oversee six properties in the current portfolio and the
renovation and reopening of El Encanto, Santa Barbara, California, and
Richard M. Levine, Chief Legal Officer, will lead international legal
and regulatory matters. Ali was previously General Manager of the
Montage Beverley Hills and the Peninsula Beverley Hills. Richard joins
the Company from Kerzner International Holdings Limited where he was
Executive Vice President, General Counsel, working with the
One&Only and Atlantis brands.
In the fourth
quarter, revenue from owned hotels was $32.8 million, up $3.1 million
or 10% from $29.7 million in the fourth quarter of 2010. Revenue growth
at the Italian properties was led by Hotel Cipriani, Venice, where
revenue increased by $2.0 million or 46% compared to the same quarter
in 2010. Year on year revenue at Reid's Palace increased by $1.0
million or 31%. Same store RevPAR in Europe was up 11% from the prior
year in US dollars (up 18% in local currency) driven by an improvement
in occupancy to 49% from 40% in the same period in the prior year.
EBITDA for the
quarter was $1.6 million compared to an EBITDA loss of $0.3 million in
the fourth quarter of 2010. A number of properties contributed to this
improvement with year on year EBITDA growth of $0.7 million at La
Residencia and $0.6 million at Reid's Palace due to increased group
business and stronger demand from the UK, respectively. Additionally,
the Company's two hotels in Sicily and Hotel Cipriani achieved year on
year EBITDA growth of $0.9 million and $0.5 million, respectively.
Revenue from owned
hotels for the quarter was $26.7 million, up 7% from $25.0 million in
the fourth quarter of 2010. This was largely due to strong group and
transient business at Charleston Place driving revenue growth in the
quarter of $1.6 million or 12%. Same store RevPAR in the region
increased by 9% in both US dollars and local currency largely due to a
7% growth in average daily rate ("ADR") over the fourth quarter of
2010. After adjusting for $3.2 million of non-cash fixed asset
write-offs related to the refurbishment at La Samanna and $1.2 million
for settlement of a VAT claim in Mexico, North American EBITDA was $5.7
million compared to $3.3 million in the fourth quarter of 2010, with
the growth largely attributable to Charleston Place.
Rest of World:
revenue was $8.9 million, compared to $9.8 million in the fourth
quarter of 2010. Same store RevPAR was down 1% in US dollars (up 20% in
local currency). EBITDA was up by $0.6 million or 43% to $2.0 million,
compared to $1.4 million in the fourth quarter of 2010, as cost savings
and a pick-up in group business offset the rate pressure from new
by 13% to $27.2 million in the fourth quarter of 2011, from $24.1
million in the fourth quarter of 2010. Same store RevPAR in the region
increased by 17% in both US dollars and local currency as a result of
an 8% increase in ADR and a five percentage point increase in occupancy
compared to the fourth quarter of 2010. EBITDA for the quarter was $7.7
million, compared to $6.0 million in the fourth quarter of last year. A
record year at Copacabana Palace Hotel delivered strong revenue and
EBITDA growth of $2.1 million or 12% and $1.2 million or 20%,
respectively, driven by record occupancy and ADR with strong demand
from US travelers. Year on year revenue and EBITDA at Hotel das
Cataratas increased by $1.1 million and $0.6 million, respectively,
following the major refurbishment completed in November 2010.
Revenue for the
fourth quarter of 2011 was $12.0 million, an increase of $1.4 million
or 14% year over year. Same store RevPAR increased by 26% in both US
dollars and local currency due to a 18% increase in ADR and a four
percentage point increase in occupancy compared to the fourth quarter
of 2010. EBITDA was $3.4 million compared to $2.5 million in the fourth
quarter of 2010 with growth in all properties. The Company's Asian
portfolio performed particularly well, with EBITDA growth of 43%
compared to the same quarter of 2010, demonstrating the strong position
of the properties and the continued buoyancy of luxury travel interest
in the region.
& part-ownership interests:
EBITDA for the
fourth quarter of 2011 was $1.6 million compared to $0.4 million in the
fourth quarter of 2010. The improvement was largely attributable to the
Company's share of results from its Peruvian hotels, which have fully
recovered from the flooding and landslides in the country in 2010. The
quarterly result also included $0.3 million of costs relating to the
Company's investment in the management contract business.
Revenue from '21'
Club in the fourth quarter of 2011 was $6.4 million compared to $6.5
million in the same quarter of 2010. EBITDA was $2.0 million compared
to $2.2 million in the same quarter of 2010.
by $2.9 million or 16% to $20.6 million in the fourth quarter of 2011
from $17.7 million in the prior year, reflecting increases in all
businesses. EBITDA was $6.7 million compared to $5.4 million in the
same quarter of 2010, largely due to a $0.8 million increase in share
of results from PeruRail, reflecting a full recovery from the 2010
floods and landslides, and a $0.6 million increase from the Road to
Mandalay, as Myanmar further opens to the international traveler.
In the fourth
quarter of 2011, central costs were $10.4 million compared with $5.6
million in the prior year period. This increase is attributable to a
$2.7 million increase in compensation costs, largely due to bonus
accruals related to exceeding the Company's budget, a $0.7 million
increase in premises costs following the relocation of the London
office, a $0.4 million increase in stock option expenses and a credit
in the fourth quarter of 2010 of $0.5 million for recovery of Cipriani
In the fourth
quarter of 2011, there was an EBITDA loss of $2.0 million from real
estate activities, primarily related to Porto Cupecoy, Sint Maarten,
compared with a loss of $0.4 million in the fourth quarter of 2010.
Cumulatively, at the end of the quarter, 111 condominium units or 60%
of the total had been sold.
recorded a total pre-tax impairment charge for the quarter of $18.9
million. This included fixed asset and goodwill impairments of $7.9
million at Maroma Resort & Spa, Riviera Maya, $5.9 million at Casa
de Sierra Nevada, Mexico, $2.8 million at La Residencia, $1.7 million
at the Company's two South African properties and $0.6 million from the
Company's share of the impairment in its joint venture interest at Las
Casitas del Colca, Peru.
Gain on disposal:
recorded a pre-tax gain on disposal of $16.0 million from the sale of
excess development rights of '21' Club to the developer of the site
behind the restaurant. From the gross proceeds the Company repaid $4.5
million of associated debt.
and amortization charge for the fourth quarter of 2011 was $11.9
million compared with $11.2 million in the fourth quarter of 2010.
The interest charge
for the fourth quarter of 2011 was $7.7 million, down $4.0 million from
$11.7 million in the prior year quarter. The interest charge for the
fourth quarter of 2010 included swap termination costs of $1.9 million
and a $1.3 million write-off of deferred financing costs with no
comparative charge in the fourth quarter of 2011. Additionally, in the
fourth quarter of 2011, $0.9 million of interest was capitalized in
relation to the development of El Encanto.
The tax charge from
continuing operations for the fourth quarter of 2011 was $15.2 million,
compared to a charge of $9.8 million in the same quarter in the prior
year. The 2011 fourth quarter tax charge included $7.4 million in
respect of the gain on disposal of excess development rights of '21'
Club with no corresponding charge in the prior year's quarter.
invested a total of $16.9 million during the quarter, which included
$3.7 million for the ongoing restoration of El Encanto, $4.2 million at
La Samanna and $1.3 million at Copacabana Palace Hotel for the planned
refurbishment of rooms and public areas, $0.8 million at Grand Hotel
Europe, St Petersburg for refurbishment of the main bar and conference
areas, and the balance for routine capital expenditures.
At December 31,
2011, the Company had long-term debt (including the current portion and
debt of consolidated variable interest entities) of $634.4 million and
cash balances of $103.3 million (including $13.2 million of restricted
cash), resulting in total net debt of $531.1 million compared with
total net debt of $529.9 million at the end of the third quarter of
2011. The ratio of net debt to adjusted EBITDA (before real estate) was
4.8 times compared to 6.7 times at December 31, 2010.
available to the Company at December 31, 2011 under short-term lines of
credit were $4.4 million, bringing total cash availability (excluding
restricted cash) at December 31, 2011, to $94.5 million.
At December 31,
2011, approximately 53% of the Company's debt was at fixed interest
rates and 47% was at floating interest rates. The weighted average
maturity of the debt was approximately 3.6 years and the weighted
average interest rate (including margin and swaps) was approximately
4.3%. The Company had $78.8 million of debt repayments due within 12
months including $10.0 million of debt related to Keswick Hall which
has been repaid during the first quarter of 2012. These amounts are
expected to be met through a combination of operating cash flow,
refinancing of the facilities and utilization of available cash.
reported in the Company's second and third quarter 2011 earnings news
releases, the Company's balance sheet as at December 31, 2010 has been
restated to correct an understatement of non-current deferred income
tax liabilities. The prior period increase to non-current deferred tax
liabilities of $6.0 million (and a corresponding decrease to retained
earnings) does not affect the Company's net losses or losses per share
for the year ended December 31, 2010.
* * * * * * * *
Net debt / adjusted
evaluates the operating performance of the Company's segments on the
basis of segment net earnings before interest, foreign exchange, 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 historical
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 US generally accepted
accounting principles (US 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 US
GAAP for purposes of evaluating operating performance.
Adjusted EBITDA and
adjusted net earnings of the Company are non-GAAP financial measures
and do not have any standardized meanings prescribed by US 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
US GAAP. Management considers adjusted EBITDA and adjusted net earnings
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), disposals of assets or investments, and certain other
items (some of which may be recurring) which management does not
consider indicative of ongoing operations or which could otherwise have
a material effect on the comparability of the Company's operations.
Adjusted EBITDA and adjusted net earnings 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.
principal activities of the Company relate to its hotels, restaurants,
tourist trains and cruises, management considers the revenue from these
activities to be a better measure of performance than total revenue
which includes real estate sales from past developments of for-sale
residences adjoining some of the Company's hotels, currently a small
part of the Company's overall business.
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, debt reduction and debt refinancings, asset sales 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 and oral presentations, 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, rising fuel costs adversely
impacting customer travel and the Company's operating costs,
fluctuations in interest rates and currency values, uncertainty of
negotiating and completing proposed asset sales, debt refinancings,
capital expenditures and acquisitions, inability to reduce funded debt
as planned or to agree bank loan agreement waivers or amendments,
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 or regional economic conditions and weakness in financial
markets which may adversely affect demand, legislative, regulatory and
political developments, and possible new challenges to the Company's
corporate governance structure. Further information regarding these and
other factors is included in the filings by the Company with the U.S.
Securities and Exchange Commission.
Hotels will conduct a conference call on Friday, February 24, 2012 at
10.00 hrs EST (15.00 GMT) which is accessible at +1 877 249 9037 [
tel:%2B1%20877%20280%202342 ] (US toll free) or +44 (0)20 7784 1036 [
tel:%2B44%20%280%2920%203427%201918 ] (Standard International). The
conference ID is 9772741. A re-play of the conference call will be
available until 7pm (EST) Friday, March 2, 2012 and can be accessed by
calling +1 866 932 5017 [tel:%2B1%20866%20932%205017 ] (US toll free)
or +44 (0)20 7111 1244 [tel:%2B44%20%280%2920%207111%201244 ] (Standard
International) and entering replay access number 9772741#. A re-play
will also be available on the company's website:
requiring further information should contact Vicky Legg, Director of
Corporate Communications on +44 (0)20 3117 1380 or
Three Months ended
December 31, 2011
earnings from unconsolidated companies of $1,980,000 (2010 - $963,000)
and revenue of $134,585,000 (2010 - $130,609,000).
Three Months Ended
December 31, 2011
OPERATING INFORMATION FOR OWNED HOTELS
Twelve Months ended
December 31, 2011
earnings from unconsolidated companies of $6,627,000 (2010 -
$4,486,000) and revenue of $588,559,000 (2010 - $561,142,000).
Twelve Months Ended
December 31, 2011
OPERATING INFORMATION FOR OWNED HOTELS
CONSOLIDATED BALANCE SHEETS
Vice President, Chief Financial Officer
Director of Investor Relations