Orient-Express Hotels Announces Third Quarter and Nine Months Results
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Orient-Express Hotels Announces Third Quarter and Nine Months Results
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Category: Worldwide
This is a press release selected by our editorial committee and published online for free on 2005-11-03
Contact: Paul White
Orient-Express Hotels Ltd
Tel: +44 20 7805 5038
Pippa Isbell
Orient-Express Hotels Ltd.
Tel: +44 20 7805 5065
Fax: +44 20 7805 5938
Email: pippa.isbell@orient-express.com
ORIENT-EXPRESS HOTELS ANNOUNCES THIRD QUARTER AND NINE MONTHS
RESULTS. THIRD QUARTER NET EARNINGS UP 70% OVER PRIOR YEAR.
Hamilton, Bermuda, November 2, 2005. Orient-Express Hotels Ltd.
(NYSE: OEH, www.orient-express.com), owners of 49 deluxe hotel,
restaurant, tourist train and river cruise properties in 25
countries, today announced its results for the third quarter and
nine months ended September 30, 2005.
For the quarter net earnings were $19.5 million ($0.50 per common
share) on revenue of $132.4 million, an increase of 70% over net
earnings of $11.5 million ($0.34 per common share) in the year
earlier period. Earnings per common share were up 47% and revenue
was up 29% over the third quarter of 2004.
Net earnings for the nine months were $36.4 million ($0.96 per
common share) on revenue of $345.2 million, an increase of 84%
over net earnings of $19.8 million ($0.58 per common share) in the
year earlier period. Earnings per common share were up 66% and
revenue was up 26% over the first nine months of 2004.
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Mr. James B. Sherwood, Chairman, said that hotel earnings both in
Europe and North America had shown substantial improvement over
the prior year’s third quarter. Indeed, all other regions also
reported improved hotel results, although less pronounced than for
Europe and North America. Tourist trains, restaurants and
management fees all registered gains as well.
“This year’s hurricane season in the Gulf of Mexico has impacted
our Windsor Court Hotel in New Orleans and the Maroma Resort & Spa
on the Riviera Maya in Mexico. The Windsor Court has now reopened
and President Bush and his entourage were among the first guests.
Maroma was closed for construction works when hurricane Wilma hit
so no guest nights were lost. We are fully covered by property
damage and business interruption insurance for the consequences of
the hurricanes, subject to a deductible of $500,000 per event.
The Windsor Court had 50 rooms (out of 330) damaged as a result of
glass breakage and related water damage and Maroma had 15 of its
65 rooms damaged. We expect Maroma to reopen in January. The
impact of the hurricanes on our third quarter earnings was 2 cents
per common share. The fourth quarter earnings impact is estimated
to be about 5 to 6 cents per share. Under U.S. GAAP some
insurance receipts are only reported when payment is confirmed by
the insurers. In event such confirmation is delayed (which we do
not currently expect) we would have to credit the income in the
quarter in which it is received.”
“While these hurricanes are a challenge we feel confident that
both New Orleans and the Riviera Maya will quickly recover. A
major part of the room stock in New Orleans in the coming months
will be occupied by business visitors engaged in the citywide
recovery program,” he said.
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“At this time, the company’s outlook for 2006 is very positive
with same store bookings up 16% over the prior year,” he
concluded.
Mr. Simon M.C. Sherwood, President, said that the average daily
room rate of owned hotels in U.S. dollars increased 3% to $427
from $414 in the third quarter of 2004. Same store RevPAR in U.S.
dollars was up 11% to $284 compared with the year earlier period.
EBITDA margin for the quarter was up 5% to 30%.
He reviewed performance by region as follows:
Europe. EBITDA of owned hotels was $26.9 million compared with
$19.6 million in the year earlier period. The Grand Hotel Europe
in St. Petersburg acquired last February was the largest
contributor, with the newly opened Hotel Caruso Belvedere in
Ravello, Italy adding $0.5 million. Only the Lapa Palace in
Lisbon underperformed relative to the 2004 period.
North America. EBITDA for the quarter of owned hotels was $3.6
million compared with $0.4 million in the year earlier period.
Keswick Hall in Charlottesville, Virginia reported the largest
gain, followed by El Encanto in Santa Barbara, California and the
Windsor Court in New Orleans. Only Maroma underperformed relative
to the prior year as a result of it being closed for construction
works.
Southern Africa. EBITDA of owned hotels was $1.3 million compared
with $0.6 million in the prior year period. Much of the increase
was due to improved results from Orient-Express Safaris in
Botswana.
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South America. EBITDA of owned hotels was $1.4 million, a modest
increase on $1.3 million in the prior year period.
South Pacific. EBITDA of owned hotels was $1.5 million compared
with $1.1 million in the prior year period. Both Lilianfels in
Katoomba, Australia and the Bora Bora Lagoon Resort registered
gains.
Hotel management and part-ownership. EBITDA was $3.9 million
compared with $2.9 million in the prior year period. Charleston
Place in Charleston, South Carolina and the Monasterio Hotel and
Machu Picchu Sanctuary Lodge in Peru all registered significant
gains.
Restaurants. EBITDA loss was $0.2 million compared with a loss of
$0.4 million in the prior year period. The loss largely arises
from the summer closing of ‘21’ Club in New York City, a recurring
seasonal event.
Tourist trains and river cruises. EBITDA for the quarter was $6
million compared with $4.6 million in the prior year period.
Peruvian railway operations were the largest component of this
improvement. Although a landslide closed the Cuzco-Machu Picchu
line for a few days, it was possible to operate trains to the
landslide area from both ends of the line and the passengers
crossed the landslide area on foot.
Financial costs were up $3.1 million to $7.8 million, primarily
due to the Grand Hotel Europe, St. Petersburg, El Encanto in Santa
Barbara and Hotel Caruso Belvedere in Ravello acquisitions and
taxes were $1.1 million higher. Depreciation was $1.4 million
higher due to the larger asset base.
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Simon Sherwood said “Our property development projects in Saint
Martin continue to progress well and we recently received a casino
permit on the Dutch side of our property as part of the second
phase of our Cupecoy Village development. We have not yet
finalized our plans for this parcel of land which is at the
Dutch/French border, an attractive location because casinos are
not permitted on the French side of the island.”
“La Samanna in St. Martin has registered the best performance this
year since we acquired the property in 1996, with EBITDA in the
nine months up over 50% compared to last year. This bodes well
for the success of our real estate developments on our land next
to the hotel,” he concluded.
***
Management believes that EBITDA (net earnings adjusted for interest, tax, depreciation
and amortization) 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,
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. generally accepted accounting principles for purposes of evaluating operating
performance.
This news release contains, 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, realization of
bookings and reservations as actual revenue, inability to sustain price increases or to
reduce costs, fluctuations in interest rates and currency values, adequate sources of
capital and acceptability of finance terms, possible loss or amendment of planning
permits and delays in construction schedules for expansion 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, uncertainty of recovering on insurance claims for property damage and lost
earnings, 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 and Sea Containers Ltd. with the U.S. Securities
and Exchange Commission.
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***
Orient-Express Hotels will conduct a conference call tomorrow,
November 3, 2005 at 11.00 AM (EST) which is accessible at 212-231-
2242. A re-play of the conference call will be available until
5.00 PM (EST) Friday, November 11, 2005 and can be accessed by
calling 800-633-8284 (International dial-in #:1-402-977-9140) and
entering reservation number 21265603. A re-play will also be
available on the company’s website: www.orient-express.com.
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ORIENT-EXPRESS HOTELS LTD
Three Months ended September 30, 2005
SUMMARY OF OPERATING RESULTS
Three months ended
September 30
$’000 – except per share amount 2005 2004
REVENUE AND EARNINGS
FROM UNCONSOLIDATED COMPANIES
Owned hotels
- Europe 62,993 46,912
- North America 19,541 13,973
- Rest of World 21,725 18,009
Hotel management & part ownership interests 3,880 2,887
Restaurants 3,425 3,057
Trains & Cruises 20,859 18,130
Total (1) 132,423 102,968
Analysis of earnings:
Owned hotels
- Europe 26,878 19,644
- North America 3,627 367
- Rest of World 4,185 3,052
Hotel management & part ownership interests 3,880 2,887
Restaurants (165) (436)
Trains & Cruises 5,967 4,560
Central overheads (4,856) (4,142)
EBITDA 39,516 25,932
Depreciation & Amortization (8,598) (7,182)
Interest (7,819) (4,751)
Earnings before Tax 23,099 13,999
Tax (3,616) (2,504)
Net earnings on common shares 19,483 11,495
Earnings per common share
0.50
0.34
Number of shares – millions
39.34
34.25
(1) Comprises earnings from unconsolidated companies of $4,690,000 (2004: $2,943,000) and revenue
of $127,733,000 (2004: $100,025,000).
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ORIENT-EXPRESS HOTELS LTD
Three Months Ended September 30, 2005
SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS
Three months ended
September 30
2005 2004
Average Daily Rate
(in U.S. dollars)
Europe 625 740
North America 278 260
Rest of World 262 235
Worldwide 427 414
Rooms Sold (thousands)
Europe 61 39
North America 30 31
Rest of World 47 43
Worldwide 138 113
RevPar (in U.S. dollars)
Europe 417 477
North America 183 156
Rest of World 148 122
Worldwide 267 240
Change %
Same Store RevPAR
(in U.S. dollars)
Dollar Local
Currency
Europe 506 477 6% 5%
North America 206 178 16% 16%
Rest of World 148 122 21% 22%
Worldwide 284 256 11% 10%
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ORIENT-EXPRESS HOTELS LTD
Nine Months ended September 30, 2005
SUMMARY OF OPERATING RESULTS
Nine months ended
September 30
$’000 – except per share amount 2005 2004
Revenue and earnings
from unconsolidated companies
Owned hotels
- Europe 134,468 96,046
- North America 66,473 53,434
- Rest of World 67,155 55,512
Hotel management & part ownership interests 12,494 10,571
Restaurants 14,571 13,195
Trains & Cruises 50,001 44,508
Total (1) 345,162 273,266
Analysis of earnings
Owned hotels
- Europe 44,836 29,452
- North America 15,121 9,382
- Rest of World 14,223 11,141
Hotel management & part ownership interests 12,494 10,571
Restaurants 2,485 1,534
Trains & Cruises 11,025 8,901
Central overheads (14,007) (11,556)
EBITDA 86,177 59,425
Depreciation & Amortization (25,048) (21,151)
Interest (17,549) (14,607)
Earnings before Tax 43,580 23,667
Tax (7,197) (3,867)
Net earnings on common shares 36,383 19,800
Earnings per common share
0.96
0.58
Number of shares – millions
37.82
34.25
(1) Comprises earnings from unconsolidated companies of $10,688,000 (2004: $8,871,000) and
revenue of $334,474,000 (2004: $264,395,000).
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ORIENT-EXPRESS HOTELS LTD
Nine Months Ended September 30, 2005
SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS
Nine months
ended
September 30
2005 2004
Average Daily Rate
(in U.S. dollars)
Europe 565 645
North America 330 321
Rest of World 270 235
Worldwide 392 373
Rooms Sold (thousands)
Europe 140 88
North America 112 104
Rest of World 142 134
Worldwide 394 326
RevPar (in U.S. dollars)
Europe 343 370
North America 224 210
Rest of World 155 127
Worldwide 240 217
Change %
Same Store RevPAR
(in U.S. dollars)
Dollars Local
Currency
Europe 409 376 9% 6%
North America 245 225 9% 9%
Rest of World 155 128 21% 18%
Worldwide 249 223 12% 10%
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ORIENT-EXPESS HOTELS LTD
CONSOLIDATED AND CONDENSED BALANCE SHEETS
(UNAUDITED)
$’000
September 30
2005
December 31
2004
Assets
Cash $ 54,070 $ 85,610
Accounts receivable 48,788 34,984
Due from related parties 17,929 14,718
Prepaid expenses and other 14,760 11,914
Inventories 31,317 28,965
Total current assets 166,864 176,191
Property plant & equipment, net book value 1,022,989 916,811
Investments 126,716 123,599
Goodwill 64,136 29,529
Other assets 22,677 19,461
$ 1,403,382 $ 1,265,591
Liabilities and Shareholders' Equity
Working capital facilities $ 38,936 $ 42,920
Accounts payable 24,724 23,839
Due to related parties 6,669 5,453
Accrued liabilities 59,205 37,288
Deferred revenue 22,078 20,493
Current portion of long-term debt and capital leases 57,799 46,245
Total current liabilities 209,411 176,238
Long-term debt and obligations under capital leases 495,969 537,461
Deferred income taxes 16,496 2,710
Minority interest 4,574 4,192
Shareholders' equity 676,932 544,990
$ 1,403,382 $ 1,265,591
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