News for the Hospitality Executive
August 2, 2011
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 second quarter ended June 30, 2011.
performed well in the second quarter, reflecting continued positive
momentum in the luxury leisure travel market and the solid performance
of our iconic properties as well as our train, cruise and other
assets," said Bob Lovejoy, Chairman and Interim Chief Executive
Officer. "Revenue excluding Real Estate grew by 23% compared to the
prior year period, driven by strong performance in Europe, particularly
our Italian properties. Adjusted EBITDA before Real Estate increased by
28%, compared with the second quarter of last year, and we delivered
our sixth consecutive quarter of RevPAR growth."
we are encouraged by signs of continued recovery in our market -
including favorable booking trends. In addition, we see substantial
potential to grow revenue through disciplined capital expenditure
programs and our marketing and brand-building initiatives, as well as
opportunities to enhance profitability through continued operational
improvement. Orient-Express has a deep team of seasoned operating
professionals implementing the Company's long-term strategy, and we are
keenly focused on profitable growth and building long-term shareholder
Real Estate, was $177.4 million in the second quarter of 2011, up $33.3
million or 23% from the second quarter of 2010.
Revenue from Owned
Hotels for the second quarter was $145.2 million, up $29.0 million or
25% from the second quarter of 2010. On a same store basis, Owned
Hotels RevPAR was up 20% in US dollars and up 14% in local currency.
Trains and Cruises
revenue in the second quarter was $25.3 million compared to $21.9
million in the second quarter of 2010, an increase of 16%.
before Real Estate was $41.1 million, up 28% compared to $32.1 million
in the prior year. The principal variance was in the Italian hotels,
where EBITDA was up $9.0 million from the same period in the prior
year, led by Hotel Cipriani, Venice (up $4.0 million), Grand Hotel
Timeo, Sicily (up $1.9 million) and Hotel Splendido, Portofino (up $1.1
million). Other variances include the Copacabana Palace Hotel, Rio de
Janeiro (up $1.5 million), Reid's Palace, Madeira (up $1.0 million),
Grand Hotel Europe, St Petersburg (up $0.8 million), The Royal Scotsman
(up $0.8 million) and share of earnings from Peru hotels (up $0.6
million), offset by The Westcliff, Johannesburg (down $2.4 million),
Mount Nelson Hotel, Cape Town (down $1.3 million) and share of earnings
from PeruRail (down $2.6 million).
earnings from continuing operations for the second quarter were $7.5
million (adjusted net earnings of $0.07 per common share), compared
with $3.3 million ($0.04 adjusted net earnings per common share) in the
second quarter of 2010. Net earnings for the second quarter were $5.2
million (reported earnings of $0.05 per common share), compared with a
net loss of $0.8 million (reported loss of $0.01 per common share) in
the second quarter of 2010.
During the quarter
the Company announced that Palacio Nazarenas, its sixth hotel in Peru,
is planned to open in early summer 2012. The three year restoration of
this 55 key all suite hotel in a former palace and convent, next door
to the Company's Hotel Monasterio in Cuzco, has been carried out under
the guidance of eight full time archaeologists and the supervision of
Peru's National Institute of Culture, with over 318,000ftcubed of earth
excavated by hand and each stone numbered and recorded. The total cost
of renovation for the hotel, which is owned through the Company's
Peruvian joint venture, is expected to be $14.1 million.
Features of this
high altitude urban retreat will include oxygenated suites crafted by
local artisans, a full service spa offering an indigenous product
range, iPads in every room pre-loaded with insider city guides, a
mobile phone for each room with reception in Cuzco and the surrounding
area, Cuzco's first outdoor heated swimming pool, insightful tours to
Machu Picchu and surrounding cultural sites, and an all day dining
experience showcasing contemporary Andean cuisine.
Napasai, Koh Samui, reopened at the end of the quarter following a
month long closure, during which a crystal clear lagoon and nature
reserve accessible directly from the resort's beach was created under
the supervision of the local marine authority. Dead coral and
underwater rocks were removed, producing a seven acre natural haven for
tropical fish and a diversity of corals which will attract divers and
snorkelers to the resort.
On August 1, the
Company concluded the sale of Hotel de la Cite, Carcassonne. The
property was free of debt and the disposal of this non-core asset
delivers EUR9.0 million ($12.9 million) cash proceeds to the Company,
less any associated fees.
Two of the
Company's hotels recently received significant awards. In June, Conde
Nast Traveler (US) voted Maroma's Kinan Spa the #1 Spa in Mexico and
Central America, with an overall score of 96.6 out of a possible 100,
in its widely-followed annual list of the 250 Best Spas in the United
States, Mexico, Caribbean and Canada. In July, Hotel Caruso took home
the coveted Top Resort in Europe award in Travel + Leisure's (US)
World's Best Awards 2011 readers' survey.
In June, UNESCO
designated as a World Heritage Site the Tramuntana mountain range
around Deia in Mallorca, home to La Residencia. Each World Heritage
site has a cultural or natural significance that, according to UNESCO,
"is so exceptional as to transcend national boundaries and of
importance for present and future generations of humanity."
In the second
quarter, revenue from Owned Hotels was $76.7 million, up $22.1 million
or 40% from $54.6 million in the second quarter of 2010. Second quarter
revenue at the Italian hotels increased by $15.7 million or 54%, led by
strong demand from the UK and US markets. Same store RevPAR was up 36%
from the prior year in US dollars (up 28% in local currency). EBITDA
for the quarter was $28.8 million compared to $17.0 million in the
second quarter of 2010, which represents an $11.8 million increase.
This improvement arose largely from the Italian hotels where the impact
of refurbishments at Hotel Cipriani and the effect of the Biennale art
exhibits in Venice generated EBITDA growth of $4.0 million. Compared
with the second quarter of 2010, the Company's two hotels in Sicily
achieved year on year EBITDA growth of $2.6 million based on a full
quarter of operations in 2011.
Revenue from Owned
Hotels for the quarter was $31.2 million, up 7% from $29.2 million in
the second quarter of 2010, due to rate driven increases in revenue at
La Samanna, Saint Martin and a combination of occupancy and rate driven
growth at Charleston Place, Charleston, offset by a decline at Maroma
Resort & Spa in Mexico, where security concerns continue to impact
market demand generally to the country. Same store RevPAR in the region
increased by 8% in US dollars (up 7% in local currency). EBITDA was
$5.8 million compared to $5.4 million in the second quarter of 2010.
Rest of World:
revenue was $6.2 million, compared to $9.2 million in the second
quarter of 2010. Same store RevPAR was down 43% in US dollars (down 48%
in local currency). EBITDA was a loss of $1.0 million, compared to a
gain of $2.5 million in the second quarter of 2010. The decrease was
largely the result of the football World Cup played in South Africa in
2010, although EBITDA has also been negatively impacted by new
competition in both Cape Town and Johannesburg and a stronger Rand,
resulting in pressure on rates and margins.
by 38% to $21.7 million in the second quarter of 2011, from $15.7
million in the second quarter of 2010. Year on year revenue increased
at Hotel das Cataratas, Iguassu Falls, by $1.5 million or 70% following
the major refurbishment that was completed in November 2010. Year on
year revenue increased at Copacabana Palace by $4.3 million or 37%,
driven by strong ADR and US guest growth. Same store RevPAR in the
region increased by 27% in both US dollars and local currency. EBITDA
was $4.6 million, compared to $3.0 million last year, an increase of
53%. Local inflationary pressures and a stronger Real impacted margins
in the quarter.
Revenue for the
second quarter of 2011 was $9.4 million, an increase of $1.9 million or
25% year over year, reflecting growth at all properties except Napasai,
Koh Samui, where there was a temporary closure for beach works. Same
store RevPAR increased by 26% in US dollars (increase of 29% in local
currency). EBITDA was $1.4 million compared to $0.8 million in the
second quarter of 2010.
and part-ownership interests:
EBITDA for the
second quarter of 2011 was $2.5 million compared to $2.2 million in the
second quarter of 2010. The improvement was largely attributable to the
Company's share of results from Peru hotels, as the second quarter of
2010 was negatively impacted by flooding and landslides in the country.
The quarterly result also included $0.3 million of costs relating to
the Company's initiative to enter the Management Contract business.
Revenue from '21'
Club, New York, in the second quarter of 2011 was $4.1 million compared
to $3.8 million in the same quarter of 2010. EBITDA was a loss of $0.4
million compared to a gain of $0.5 million in the same quarter of 2010
due to a $1.0 million accrual against a contingent liability.
Trains and Cruises:
by $3.4 million to $25.3 million in the second quarter of 2011 from
$21.9 million in the prior year, an increase of 16% year over year.
EBITDA was $6.1 million compared to $6.8 million in the same quarter of
2010 due to a decrease in share of results from PeruRail of $2.6
million. Both revenue and EBITDA from PeruRail in the second quarter of
2010 included insurance income of $2.8 million.
In the second
quarter of 2011, central costs were $8.7 million compared with $5.7
million in the prior year period. The increase was largely due to
litigation settlement gains recognized in the prior year ($1.1 million)
and non-cash stock option costs ($0.6 million) and legal and other
professional service fee increases ($0.4 million) in the current
In the second
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 $1.4 million in the second quarter of 2010.
During the quarter, the Company recognized $1.7 million of revenue from
three units transferred to customers. Cumulatively, at the end of the
quarter, 114 units or 62% of the total had been sold and the legal
title of 104 units had been transferred.
and amortization charge for the second quarter of 2011 was $11.7
million compared with $11.4 million in the second quarter of 2010.
The interest charge
for the second quarter of 2011 was $11.3 million, up from $7.4 million
in the second quarter of 2010 principally due to a $1.7 million
one-time write-off of deferred financing costs on debt repayment,
higher rates on refinanced debt and interest capitalized in the second
quarter of 2010 of $1.9 million.
The tax charge for
the second quarter of 2011 was $10.0 million, compared to a charge of
$7.4 million in the same quarter in the prior year. The second quarter
of 2011 included a deferred tax charge of $1.0 million arising in
respect of fixed asset timing differences following the appreciation of
local currencies against the US dollar, compared to a deferred tax
benefit of $0.3 million in the same quarter in the prior year.
invested $14.9 million during the quarter, including $1.1 million at
Hotel Cipriani, $1.5 million at El Encanto, Santa Barbara, $1.4 million
at the two Sicilian properties, $1.1 million at Hotel Splendido, $1.0
million at La Residencia, Mallorca, and routine capital expenditure at
At June 30, 2011,
the Company had long-term debt (including the current portion and debt
of consolidated variable interest entities) of $703.4 million, working
capital loans of $0.7 million, and cash balances of $128.1 million
(including $15.1 million of restricted cash), giving a total net debt
of $576.0 million compared with total net debt of $610.2 million at the
end of the first quarter of 2011. The decrease in net debt reflects the
$25.5 million proceeds received in April 2011 following the assignment
of the New York hotel project.
available to the Company at June 30, 2011 under short-term lines of
credit were $4.6 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 June 30, 2011,
to $129.6 million.
At June 30, 2011,
approximately 58% of the Company's debt was at fixed interest rates and
42% was at floating interest rates. The weighted average maturity of
the debt was approximately 3.4 years and the weighted average interest
rate (including margin and swaps) was approximately 4.5%.
At June 30, 2011,
excluding revolving credit facilities of $28.0 million which are
available for redrawing, the Company had $48.5 million of debt
repayments due within 12 months. These are expected to be met through a
combination of operational cash flow, refinancing the facilities and
utilizing available cash.
During the quarter,
EUR30.0 million ($43.5 million) of debt secured on La Residencia,
maturing in September 2011, was refinanced with an EUR18.0 million
($26.1 million) facility maturing in 2014.
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.
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 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 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.
Hotels will conduct a conference call on Wednesday, August 3, 2011 at
10.00 hrs EDT (15.00 BST) which is accessible at +1 888 935 4575 (US
toll free) or +44 (0)20 7136 6283 (Standard International). The
conference ID is 9270647. A re-play of the conference call will be
available until 7pm (EDT) Wednesday, August 10, 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
9270647#. A re-play will also be available on the company's website:
Three Months ended
June 30, 2011
earnings from unconsolidated companies of $2,198,000 (2010 -
$4,725,000) and revenue of $176,890,000 (2010 - $166,811,000).
Three Months Ended
June 30, 2011
OPERATING INFORMATION FOR OWNED HOTELS
Six Months ended
June 30, 2011
earnings from unconsolidated companies of $1,433,000 (2010 -
$1,868,000) and revenue of $280,880,000 (2010 - $258,909,000).
Six Months Ended
June 30, 2011
OPERATING INFORMATION FOR OWNED HOTELS
CONSOLIDATED BALANCE SHEETS
Vice President, Chief Financial Officer
Director, Corporate Communications