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HAMILTON, Bermuda,
May 3, 2011 -- - First quarter
total revenue, excluding Real Estate, up 17% to $99.6 million - Revenue from
Owned Hotels up 13% to $88.9 million - Same store RevPAR
up by 6% in local currency, up 8% in US dollars - Adjusted EBITDA
before Real Estate up $1.1 million to $1.9 million Key Events - Received $25.5
million in April 2011 following assignment of purchase and development
contracts for New York hotel project to an experienced development
company - Announced
intended retirement of both Chairman, James B. Hurlock, and Founder,
James B. Sherwood, at June 2011 Annual General Meeting of Shareholders - Announced
expected appointment of Jesse Robert (Bob) Lovejoy as Chairman and two
new independent nominees, Harsha V. Agadi and Philip R. Mengel, for
election to Board of Directors at the 2011 AGM - Completed
refurbishment of a further ten rooms at Hotel Cipriani, Venice, and a
further 16 rooms and suites at Grand Hotel Timeo, Taormina, Sicily Orient-Express
Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owners or
part-owners and managers of 50 luxury hotel, restaurant, tourist train
and river cruise properties operating in 24 countries, today announced
its results for the first quarter ended March 31, 2011. "We are very
pleased with our results for the quarter, which demonstrate the
continued recovery of the luxury travel market, as well as the value of
Orient-Express' iconic assets and the unparalleled experience that we
offer our guests", said Paul White, President and Chief Executive
Officer. "Same store RevPAR overall was up 8% in US dollars. In
addition, revenues in all geographic regions grew, with overall Revenue
before Real Estate up 17%, showing our Company's ability to improve
revenue in all areas, not just rooms. In Brazil and Asia Pacific signs
of growth were stronger, with local currency RevPAR up 10% and 27%
respectively." Business Highlights
Revenue, excluding
Real Estate, was $99.6 million in the first quarter of 2011, up $14.2
million from the first quarter of 2010. Revenue from Owned
Hotels for the first quarter was $88.9 million, up $10.1 million from
the first quarter of 2010. On a same store basis, Owned Hotels RevPAR
was up 6% in local currency and up 8% in US dollars. Trains and Cruises
revenue in the first quarter was $7.5 million compared to $4.9 million
in the first quarter of 2010. Adjusted EBITDA
before Real Estate was $1.9 million compared to $0.8 million in the
prior year. The principal variances from the first quarter of 2010
included the Brazilian hotels (up $1.1 million), share of earnings from
Peru hotels (up $1.0 million), Trains and Cruises (up $1.0 million), La
Samanna, St Martin (up $0.7 million), Reid's Palace, Madeira (up $0.6
million) and Le Manoir aux Quat'Saisons, Oxfordshire (up $0.5 million),
offset by Southern African hotels (down $0.9 million), Grand Hotel
Europe, St Petersburg (down $0.7 million) and Maroma Resort & Spa,
Riviera Maya (down $0.7 million). Adjusted net losses
from continuing operations for the period were $14.4 million (loss of
$0.14 per common share), compared with $18.2 million ($0.21 per common
share) in the first quarter of 2010. Net loss for the period was $14.7
million (loss of $0.14 per common share), compared with a net loss of
$12.8 million (loss of $0.15 per common share) in the first quarter of
2010. In March, the
Company announced an agreement to assign its purchase and development
agreements made with the New York Public Library in regard to the site
of the Donnell branch on West 53rd Street, New York City, to an
affiliate of Tribeca Associates, LLC and Starwood Capital Group Global,
LLC. The assignee has assumed all the terms and obligations of the
original contracts and reimbursed the Company $25.5 million in April. Two of the
Company's Italian hotels reopened for the season during the quarter,
Hotel Cipriani and Grand Hotel Timeo. Ten rooms at Hotel Cipriani were
refurbished over the winter period in Venetian pastel hues, with
Carrara marble bathrooms and Rubelli fabrics and a new 122 square meter
retail space was created within the hotel, housing a Hotel Cipriani
signature boutique and three stylish outlets by Venetian jewellery,
Fortuny silk and traditional Burano lace producers. Grand Hotel Timeo
reopened in March and the nearby Villa Sant'Andrea reopened in April
after the completion of a EUR2.0 million ($2.7 million) second phase of
renovations. At the Grand Hotel Timeo, the pool restaurant terrace has
been extended, five double rooms converted into two junior suites and a
two-bedroom suite with terrace, and 13 rooms in the Villa Flora annexe
refurbished. At Villa Sant'Andrea during the same period, 12 rooms were
reconfigured to create nine suites and junior suites with large
bathrooms, and a heated infinity pool built that is directly accessible
either from the hotel or from its private beach overlooking the Bay of
Mazzaro. Several of the
Company's properties received important recognition during the quarter.
Centurion magazine, published globally for American Express black card
holders, announced their first Readers' Choice survey in March. Hotel
Cipriani was voted Europe's Favorite Family Hotel, whilst La Residence
d'Angkor, Cambodia, was second Favorite Small Boutique Hotel in Asia
Pacific, Hotel Splendido, Portofino, was third Favorite Luxury Resort
in Europe, and Copacabana Palace, Rio de Janeiro, was third Favorite
Spa and Wellness Hotel in the Americas. In addition, the
Sunday Times Travel Magazine (UK) announced their annual readers'
awards this quarter. La Residencia, Mallorca, was voted number one
European Resort Hotel and described by readers as 'timeless' and 'style
personified'. Also in the UK, the Venice Simplon-Orient-Express was
honored as Best Rail Operator at the Globe Travel Awards, voted for by
travel agents across the country. Finally, in April,
the Company announced a slate of eight directors for election to the
Board at the 2011 Annual General Meeting of Shareholders, to be held on
June 9, 2011, including two new independent nominees, Harsha V. Agadi,
48, Chairman and Chief Executive Officer of Friendly Ice Cream
Corporation and Philip R. Mengel, 66, an Operating Partner of Snow
Phipps Group LLC. As previously announced, Chairman James B. Hurlock,
77, and Founder, former Chairman and Director James B. Sherwood, 77,
will retire from the Board at the end of their current terms and will
not stand for re-election at the AGM. Sherwood will become Founder
& Chairman Emeritus. The Board expects that Jesse Robert (Bob)
Lovejoy, 66, a director since 2000, will become Chairman following the
2011 AGM. Regional
Performance Europe: In the first
quarter, revenue from Owned Hotels was $14.7 million, up 13% from $13.0
million in the first quarter of 2010. Year on year revenue at Le Manoir
aux Quat'Saisons increased by $0.9 million or 24% due to increased
publicity following a recent television series and a brief closure for
refurbishment during part of the first quarter of 2010. Same store
local currency RevPAR was up 7% from the prior year (up 8% in US
dollars). EBITDA during a quarter where many of the European properties
are closed for at least part of the period was a loss of $6.9 million
compared to a loss of $7.5 million in the first quarter of 2010. North America: Revenue from Owned
Hotels was $29.2 million, up 7% from $27.3 million in the first quarter
of 2010, due to occupancy and rate driven increases in revenue at La
Samanna and Charleston Place, Charleston, offset by a decline at Maroma
Resort & Spa in Mexico where media reports of drug related violence
have impacted market demand generally to the country. Same store local
currency RevPAR increased by 3%. EBITDA was $5.2 million compared to
$5.4 million in the first quarter of 2010 with strong growth at La
Samanna, offset by a lower result at Maroma Resort & Spa. Rest of World: Southern Africa: First quarter
revenue was $8.8 million, compared to $8.9 million in the first quarter
of 2010. Same store local currency RevPAR was down 10% (down 4% in US
dollars). EBITDA was $1.4 million, compared to $2.3 million in the
first quarter of 2010. EBITDA at the South African properties was
negatively impacted by new competition in both Cape Town and
Johannesburg and a stronger Rand, both resulting in pressure on rates
and margins. South America: Revenue increased
by 22% to $24.4 million in the first quarter of 2011, from $20.0
million in the first quarter of 2010. Year on year revenue increased at
Hotel das Cataratas, Iguassu Falls by $1.8 million or 53% following the
major refurbishment that was completed in November 2010. Year on year
revenue increased at Copacabana Palace by $2.4 million or 16%, driven
by a 19% growth in average rate. Same store RevPAR increased by 11% in
both local currency and US dollars. EBITDA was $7.4 million, compared
to $6.0 million last year, an increase of 23%. Local inflationary
pressures and a stronger Real impacted margins in the quarter. Asia Pacific: Revenue for the
first quarter of 2011 was $11.7 million, an increase of $2.1 million or
22% year over year, with growth seen across all properties. Same store
RevPAR increased by 27% in both local currency and US dollars. EBITDA
of $2.8 million was unchanged from the first quarter of 2010. Hotel management
and part-ownership interests: EBITDA for the
first quarter of 2011 was a loss of $0.2 million compared to an EBITDA
loss of $1.3 million in the first quarter of 2010. The improvement is
largely attributable to the Company's share of results from Peru hotels
as the first quarter of 2010 was negatively impacted by flooding and
landslides in the country. Restaurants: Revenue from '21'
Club, New York, in the first quarter of 2011 was $3.3 million compared
to $3.1 million in the same quarter of 2010, and EBITDA was unchanged
from 2010 at $0.1 million. Trains and Cruises:
Revenue increased
by $2.6 million to $7.5 million in the first quarter of 2011, an
increase of 53% year over year, and EBITDA improved by $0.9 million
from a loss of $1.7 million to a loss of $0.8 million. The share of
results from PeruRail for the first quarter increased by $1.6 million
from 2010 as PeruRail was closed for much of the first quarter in 2010
due to flooding and landslides in the country. Central costs: In the first
quarter of 2011, central costs increased by $0.1 million to $7.7
million compared with $7.6 million in the prior year period. Real Estate: In the first
quarter of 2011, there was an EBITDA loss of $1.1 million from Real
Estate activities, primarily related to Porto Cupecoy, Sint Maarten,
compared with a loss of $1.3 million in the first quarter of 2010.
During the quarter, nine units were sold and the Company recognized
$1.6 million of revenue from five units transferred to customers.
Cumulatively, at the end of the quarter, 112 units or 61% of the total
had been sold and the legal title of 100 units had been transferred. Also during the
quarter, one of the model homes at Keswick Estate, Virginia was sold
for $1.9 million. Gain on disposal: During the quarter,
there was a gain on disposal of $0.6 million, as the assignment of the
agreements for the Company's New York hotel project to a developer
resulted in proceeds net of costs greater than the carrying value of
the asset. Depreciation and
amortization: The depreciation
and amortization charge for the first quarter of 2011 was $11.3 million
compared with $11.1 million in the first quarter of 2010. Interest: The interest charge
for the first quarter of 2011 was $9.3 million up from $6.8 million in
the first quarter of 2010. In the first quarter of 2010 $2.0 million of
interest was capitalized at Porto Cupecoy and in respect of the newly
acquired Sicilian hotels which were closed for refurbishment. Tax: The tax credit for
the first quarter of 2011 was $5.0 million, compared to a charge of
$0.3 million for the same quarter in the prior year. The first quarter
of 2011 had no charge in respect of valuation allowances, compared to a
$2.0 million charge in the prior year quarter, and included an ASC 740
credit concerning uncertain tax positions of $2.1 million compared to
an ASC 740 charge of $0.5 million in the first quarter of 2010. Discontinued
operations: Losses from
discontinued operations in the quarter were $0.8 million. Discontinued
operations in the first quarter of 2011 include Hotel de la Cite,
Carcassonne and Bora Bora Lagoon Resort, French Polynesia. Investment: The Company
invested $13.1 million during the quarter, including $2.0 million at
Hotel Cipriani, $1.4 million at El Encanto, Santa Barbara, $1.7 million
at the two new Sicilian properties and $1.1 million on the Venice
Simplon-Orient-Express. In addition, the Company made payments of a
further $1.5 million to the New York Public Library which were
reimbursed as part of the $25.5 million received in April 2011. Liquidity At March 31, 2011,
the Company had long-term debt (including the current portion and debt
of consolidated variable interest entities) of $741.7 million, and cash
balances of $131.5 million (including $14.3 million of restricted
cash), giving a total net debt of $610.2 million compared with total
net debt of $570.8 million at the end of the fourth quarter of 2010.
The increase in net debt is due to cash used in operations during the
first quarter and to foreign exchange movements impacting the US dollar
value of foreign currency denominated debt. Undrawn amounts
available to the Company at March 31, 2011 under short-term lines of
credit were $10.4 million and undrawn amounts available to the Company
under secured revolving credit facilities were $12.0 million, bringing
total cash availability (excluding restricted cash) at March 31, 2011,
to $139.6 million. At March 31, 2011,
approximately 54% of the Company's debt was at fixed interest rates and
46% was at floating interest rates. The weighted average maturity of
the debt was approximately 3.2 years and the weighted average interest
rate (including margin and swaps) was approximately 4.5%. At March 31, 2011,
excluding revolving credit facilities of $28.0 million which are
available for redrawing, the Company had $114.8 million of debt
repayments due within 12 months which are expected to be met through
refinancing the facilities and utilizing available cash. Outlook "Looking ahead,
through 2011 we expect to benefit from the continued recovery of the
luxury tourism industry, which is evidenced by favorable booking trends
and positive results in the luxury goods sector. In addition, we are
fortunate that our exposure to the Middle East and North Africa region
is minimal given the potential impact of political unrest in those
areas," Paul White said. "With five consecutive quarters of RevPAR
growth behind us, and no immediate signs of this slowing, we remain
optimistic about the year and continue to be keenly focused on our key
targets. In 2011 we will continue to seek to drive EBITDA through
revenue growth and margin improvement and to bring down our net debt to
EBITDA ratio to within our stated target of 4-5x."
1. Gain on disposal
of New York hotel project. 2. Legal costs
incurred in defending the Company's class B common share structure, net
of awards or claims for reimbursement. 3. Non-recurring
costs and purchase transaction costs incurred in relation to Grand
Hotel Timeo and Villa Sant'Andrea. 4. Restructuring
and redundancy costs. 5. Charges on swaps
that did not qualify for hedge accounting. 6. Foreign exchange
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. Management
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. 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, 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 and regional economic
conditions in many parts of the world and weakness in financial
markets, 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. Orient-Express
Hotels will conduct a conference call on Wednesday, May 4, 2011 at
10.00 hrs EDT (15.00 BST) which is accessible at +1-866-239-0753 (US
toll free) or +44-(0)20-7138-0815 (Standard International). The
conference ID is 8704212. A re-play of the conference call will be
available until 7pm (EDT) Wednesday, May 11, 2011 and can be accessed
by calling +1-866-932-5017 (US toll free) or +44-(0)20-7111-1244
(Standard International) and entering replay access number 8704212#. A
re-play will also be available on the company's website:
http://www.orient-expressinvestorinfo.com.
(1) Comprises loss
from unconsolidated companies of $765,000 (2010 - $2,857,000) and
revenue of $103,907,000 (2010 - $91,987,000).
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| Contact: Martin O'Grady
Vice President, Chief Financial Officer Tel: +44-20-7921-4038 E: [email protected] Vicky Legg Director, Corporate Communications Tel: +44-20-7921-4067 E: [email protected]
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