Meliá doubles profits in the first quarter (Spain)
Gabriel Escarrer, Vice Chairman and CEO of Meliá Hotels International : “The results validate our strategy in recent years and our successful transition to a more internationally business model focused on the management of hotels for third parties. For our company, it is an enormous satisfaction to record progress in all business divisions and regions, and to be able to face the recovery from the crisis in a strong position and ready to make the most of all opportunities”. |
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Meliá doubles profits in the first quarter (Spain)
Gabriel Escarrer, Vice Chairman and CEO of Meliá Hotels International : “The results validate our strategy in recent years and our successful transition to a more internationally business model focused on the management of hotels for third parties. For our company, it is an enormous satisfaction to record progress in all business divisions and regions, and to be able to face the recovery from the crisis in a strong position and ready to make the most of all opportunities”. |
Category: Europe - Spain - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2014-05-21
The first quarter of 2014 has confirmed the positive trends in underlying EBITDA that Meliá Hotels International had been seeing since last year, and may prove to be a real turning point in the behaviour of Spanish domestic demand if it continues in future quarters. With impressive numbers which include net profits which are double the amount of the previous year, or a 10% increase in RevPAR, the company hotel confirms it has entered a new stage of growth and increased profitability Meliá earned 8.2 million euros between January and March 2014 , representing an increase of 99 % over the same period in 2013.
Revenues reached 316 million euros, up 12% on the previous year, and EBITDA not including capital gains from asset sales increased by 22%, leading to a significant improvement in profitability and an increase in hotel EBITDA margins of 136 basis points.
The evolution of the global business, with improvements in all regions, is consistent with the positive trends in international tourism, and particularly in Spain, where the exceptional progress seen in the resort hotels thanks to international demand now combines with an upturn after several years of negative numbers in domestic demand for Spanish city hotels, dependent on domestic, private and business consumption.
Meliá Hotels International attributes a large part of the results to the growth in its most important sales channel, melia.com, where on-the-books reservations are 40% ahead of the same period last year, and which points towards around +25% growth for the full year, and also the decision of the Company to purchase the remaining 50% of the Gran Meliá Palacio de Isora, an asset which is currently achieving record results, as it will be amongst the major contributors to the Company’s Ebitda, and the first in Spain.
Among the challenges, Meliá explains how its net debt rose by 84 m€ in the first quarter 2014; 1) the consolidation in accounts of the “Colón Verona”, the Company that owns the Gran Meliá Colón (Seville) according to the IFRS10 accounting standard, meant the addition of 29 million in debt, and 2) the continued devaluation of the Venezuelan Bolivar that had an impact of 20 million euros, added to the coincidence of the 3rd Quarter with the months in which cash generation is structurally lower. Company is committed to reducing its debt during the year via asset rotation, ( with a 100-120 m€ goal) by the possible conversion of the Convertible Bond – 200 m€- by December 2014, and of course, also via a better business performance.
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