HAMILTON, Bermuda, March 5, 2003 - Orient-Express
Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owner-operator
of 41 luxury hotels, tourist train and river cruise properties in 17 countries,
today announced its results for the quarter and year ended December 31,
2002. For the quarter, net earnings were $4.2 million ($0.14 per
common share) compared with $3 million ($0.10 per common share) for the
fourth quarter of 2001. Revenue was up 25% quarter to quarter, from
$59 million to $73 million.
For the year ended December 31, 2002 net earnings were $25.3 million
($0.82 per common share) compared with $29.9 million ($0.97 per common
share) in the year ended December 31, 2001. Revenue for 2002 was
up 11% from 2001, from $261 million to $289 million.
Mr.
James B. Sherwood, Chairman, said that fourth quarter earnings were in
line with "street expectations". He indicated that the luxury hotel
industry was adversely impacted in early 2002 by the September 11, 2001
terrorist attacks and towards the end of the year by the Iraqi situation.
Poor weather in Europe in the summer, mediocre stock market performance
in the U.S. and U.K., a weak economy in Germany and strengthening of the
Euro against the U.S. dollar were other temporary factors which prevented
the company from achieving improved results.
"The company made three excellent acquisitions in 2002, European tourist
trains had an outstanding year and South African hotels achieved greatly
improved results. Major works at the Copacabana Palace Hotel and
the Inn at Perry Cabin contributed to a combined reduction in EBITDA at
these properties but these works are now complete and we expect improved
results there in 2003."
"The company has traditionally insured its properties centrally and
was faced with an unusually large increase in insurance costs at mid-year,
causing such costs to rise in the second half of the year by $1 million
over the prior year period. The company's insurance coverage has
now been changed entirely, from a centralized system to a regional one,
effective January, 2003, at a savings of $2 million p.a."
"We are still left with a situation where a proportion of international
travel will be deterred as long as the uncertainties over Iraq persist.
Clearly, this will adversely impact results in the early months of 2003.
Our main earnings period is May through October so we hope Iraq will be
behind us before it starts".
"The company continues actively to negotiate the acquisition of additional
properties and hopes to make an announcement in this respect before long,"
he concluded.
Simon Sherwood, President, said that same store RevPAR was up 6% in
the fourth quarter of 2002 compared with the year earlier period.
For the year as a whole, RevPAR was down 2%. The progression of RevPAR
change in 2002 was down 12% in the first quarter, down 8% in the second
quarter, up 5% in the third quarter and up 6% in the fourth quarter.
Same store RevPAR in dollar terms was $148 in the fourth quarter of
2002 compared with $140 in the year earlier period. For the year
2002 RevPAR in dollars was $166 vs. $170 in the prior year.
He said that while works are proceeding satisfactorily at La Cabana
in Buenos Aires, and a "soft opening" is now planned for August. Unemployment
in Argentina is rapidly declining, the peso has strengthened, exports have
risen and tourist arrivals have increased.
He said that Southern Africa, South and Central America were perceived
as "safe" travel destinations of exceptional good value and the company
has a strong position in these markets.
Orient-Express Hotels avoids the use of a chain brand. Thus, none of
its properties are branded �Orient-Express� (except the train). Management
believes that discriminating travellers will choose an individual property
of fame in priority to a chain brand. In the few locations where the company
competes with deluxe brand chains (Venice, Lisbon and Rio de Janeiro are
examples) it achieves up to 40% higher average rates than the chain-brand
hotels. |
The fourth quarter and full year's 2002 results can be summarized as
follows:
Owned European hotels. For the quarter, EBITDA was $1.7
million compared with $1 million in the year earlier period. For
the year EBITDA was $29.2 million compared with $26.9 million in 2001.
The main adverse deviations were the Hotel Cipriani which suffered a loss
of U.S. visitors and the Lapa Palace in Lisbon which had less business
traveller arrivals. The La Residencia and Le Manoir acquisitions
accounted for the improvement in European EBITDA.
Owned North American hotels. EBITDA for the quarter was
$2.4 million vs. $3 million and for the year EBITDA was $11.1 million
vs. $14.6 million. La Samanna was badly affected by September 11th
which was just in advance of its peak season. The Inn at Perry Cabin
was closed for a large part of the year and New Orleans had a soft market
which impacted results of the Windsor Court.
Owned Southern Africa hotels. EBITDA for the quarter was
$1.9 million vs. $1.3 million while EBITDA for the year was $4.3 million
vs. $3.2 million. Both the Mount Nelson in Cape Town and the Westcliff
in Johannesburg showed marked improvement while Orient-Express Safaris
in Botswana were down due to less arrivals from the U.S.
Owned South American hotels. EBITDA for the quarter was
$1.3 million vs. $2.1 million and for the year was $7.1 million vs.
$8.3 million. The reduction was due to devaluation of the Brazilian
Real and a large part of the Copacabana Palace Hotel's room stock being
off line for refurbishment. The Brazilian elections depressed business
travel.
Owned South Pacific hotels. EBITDA for the quarter was
$0.3 million vs. $0.4 million and for the year was $1.3 million vs.
$3.3 million. Forest fires in Sydney and major refurbishment at Lilianfels
in the Blue Mountains west of Sydney caused a significant decline in results.
Management and part ownership interests. EBITDA for the
quarter was $3.5 million vs. $2.8 million and for the year was $12.4 million
vs. $10.9 million. Charleston Place largely accounted for the improvement.
Restaurants. EBITDA for the quarter was $2.1 million vs.
$1.9 million and for the year was $3.8 million vs. $4 million. The
small decline was due to the company's 50% interest in the Petit Blanc
4 restaurant chain in the U.K. which was only acquired in early 2002.
Steps have been taken to turn this business around in the current year.
Tourist trains and river cruising. EBITDA for the quarter
was $2.9 million vs. $1.4 million and for the year was $8.3 million vs.
$7.3 million. The Venice Simplon-Orient-Express accounted for the
increase.
Simon Sherwood concluded his remarks by saying that the company's recent
investments in its properties should permit significant profitability increase
when combined with savings such as lower insurance costs. The company
has budgeted higher profits in 2003 over 2002 but he said Iraq and terrorist
fears were unpredictable factors which could alter results.
ORIENT-EXPRESS HOTELS LTD
Three Months ended December 31, 2002
SUMMARY OF OPERATING RESULTS
Three months ended
December 31
$'000
2002 2001
Revenue
Owned hotels
- Europe
18,954 12,071
- North America
15,873 14,111
- Rest of World
15,328 13,835
Hotel management & part ownership
interests
3,531 2,829
Restaurants
6,390 6,045
Trains & Cruises
13,374 9,905
Total revenue
73,450 58,796
Operating Profits
Owned hotels
- Europe
1,724
967
- North America
2,372 3,043
- Rest of World
3,503 3,829
Hotel management & part ownership
interests
3,525 2,829
Restaurants
2,142 1,929
Trains & Cruises
2,845 1,421
Central overheads
(2,452) (2,120)
EBITDA
13,659 11,898
Depreciation & Amortization
(5,191) (4,115)
Interest
(3,669) (4,015)
Earnings before Tax
4,799 3,768
Tax
(622) (726)
Net earnings on common shares
4,177 3,042
Earnings per common share
0.14 0.10
Number of shares - millions
30.80 30.80
ORIENT-EXPRESS HOTELS LTD
Three Months Ended December 31, 2002
SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS
Three months ended
December 31
2002 2001
Average Daily Rate (in dollars)
Europe
359
264
North America
324
304
Rest of World
195
185
Worldwide
276
241
Rooms Sold (thousands)
Europe
29
28
North America
30
29
Rest of World
47
44
Worldwide
106
101
RevPar (in dollars)
Europe
182
152
North America
210
209
Rest of World
103
97
Worldwide
152
140
Change %
Same Store RevPAR
Dollar Local
(in dollars)
Currency
Europe
170
152 12%
-5%
North America
205
209 -2%
-2%
Rest of World
105
97 8%
5%
Worldwide
148
140 6%
0%
ORIENT-EXPRESS HOTELS LTD
Twelve Months ended December 31, 2002
SUMMARY OF OPERATING RESULTS
Twelve months ended
December 31
$'000
2002 2001
Revenue
Owned hotels
- Europe
99,939 79,841
- North America
58,801 59,240
- Rest of World
54,725 52,655
Hotel management & part ownership interests 12,414
10,893
Restaurants
18,115 17,833
Trains & Cruises
45,308 40,886
Total revenue
289,302 261,348
Operating Profits
Owned hotels
- Europe
29,170 26,885
- North America
11,149 14,594
- Rest of World
12,696 14,866
Hotel management & part ownership
interests
12,408 10,893
Restaurants
3,779 4,005
Trains & Cruises
8,348 7,326
Central overheads
(10,509) (9,475)
EBITDA
67,041 69,094
Depreciation & Amortization
(19,546) (16,356)
Interest
(18,351) (18,658)
Earnings before Tax
29,144 34,080
Tax
(3,850) (4,230)
Net earnings on common shares
25,294 29,850
Earnings per common share
0.82 0.97
Number of shares - millions
30.80 30.90
ORIENT-EXPRESS HOTELS LTD
Twelve Months Ended December 31, 2002
SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS
Twelve months ended
December 31
2002
2001
Average Daily Rate (in dollars)
Europe
376
337
North America
314
314
Rest of World
186
192
Worldwide
286
276
Rooms Sold (thousands)
Europe
157
153
North America
118
121
Rest of World
176
164
Worldwide
451
438
RevPar (in dollars)
Europe
242
239
North America
206
217
Rest of World
96
102
Worldwide
168
173
Change %
Same Store RevPAR
Dollars Local
(in dollars)
Currency
Europe
234
236 -1%
-6%
North America
207
218 -5%
-5%
Rest of World
96
98 -3%
0%
Worldwide
166
170 -2%
-4%
ORIENT-EXPRESS HOTELS LTD
CONSOLIDATED AND CONDENSED BALANCE SHEETS
December 31 December 31
$'000
2002 2001
Assets
Cash
37,860 57,863
Accounts receivable
55,324 45,420
Inventories
22,838 17,463
Total current assets
116,022 120,746
Real estate and other fixed assets, net
757,402 598,080
book value
Investments
85,159 79,430
Intangible assets
29,529 29,529
Other assets
10,420 8,466
998,532 836,251
Liabilities and Shareholders' Equity
Working capital facilities
23,800 7,038
Accounts payable
20,271 19,526
Accrued liabilities
46,831 38,594
Deferred revenue
15,107 10,513
Current portion of long-term debt and
37,243 55,695
capital leases
Total current liabilities
143,252 131,366
Long-term debt and obligations under
421,773 307,176
capital leases
Deferred income taxes
3,330 3,875
Minority interest
3,695 1,247
Shareholders' equity
426,482 392,587
998,532 836,251
This news release contains, in addition to historical information, forward
looking statements that involve risks and uncertainties. These include
statements regarding earnings growth, investment plans and similar matters
that are not historical facts.
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