Meliá obtains a net Profit of € 96.8Mn
During the first nine months of 2019, the evolution of the chain business was affected by the situation of some countries
Meliá Hotels International today presented its results for the first nine months of the year, which clearly reflect the complex environment of the industry, subject to various geopolitical tensions (as is the case around Brexit, Cuba or the regrowth of instability in Catalonia) and that nevertheless maintains a remarkable strength against these circumstances, also reflected in the evolution of Meliá's business. The Company thus managed to “buffer” the significant fall of RevPAR (-32%) in the third quarter in the Dominican Republic and keep global revenues stable, which barely fell by -0.3%, successfully resisting the Group's Spanish resorts. competitive pressure from Turkey and North Africa, registering a slight fall in RevPAR (-1%) despite the relative slowdown in the Canary Islands, the most affected of Spanish destinations.
The Company entered € 1,388 Mn until September, similar to the same period of 2018 if we exclude capital gains, and its EBITDA without capital gains was reduced by -3.7%. The Net Profit was 96.8 million, 23.7% lower than the one obtained in the first 9 months of 2018, also accusing the lower generation of capital gains, and above all, the worst evolution of some destinations, such as the Dominican Republic , due to the circumstances already reviewed. With three hotels among the top 10 in Punta Cana according to TripAdvisor, Meliá is positioned as the best company in a destination of very high potential, which after clarifying the falsely encouraged doubts about its reputation, will initiate an intense repositioning campaign to regain its leadership in the Caribbean.
Meliá's financial results improved 8.7% compared to the same period of 2018, with net debt at € 655.7 million, (+ € 48.2 million since December). The Company recently announced a Stock Buyback program that, with a maximum of 60 million euros, will allow it to acquire a maximum of 8,500,000 shares (representing 3.70% of the share capital). The Company thus demonstrates its confidence in the medium-term prospects of its business, which, despite the specific effects at various points in the world geography, maintains a situation of strength and fundamental strengths.
Gabriel Escarrer, Executive Vice President and CEO: “During the first nine months of 2019, the evolution of the Meliá Hotels International business was affected by the situation of some destination countries, mainly the Dominican Republic, which has suffered an amplified disinformation campaign by sensationalist means in North America, which especially impacted the Groups segment, and which has finally been discredited by the US government. Outstanding performance in the third quarter of the main European cities such as Milan, London or Paris, and of the Spanish cities, (+ 9.2% RevPAR) which, together with the resistance shown by the Spanish Mediterranean destinations in the third quarter ( -1% RevPAR despite the competition from Turkey and North Africa, concentrated in the Canary Islands) contributed to neutralize the business slowdown on the other side of the Atlantic.
Both in the face of geopolitical situations, as well as in the face of a crisis like the bankruptcy of Thomas Cook, our Company once again demonstrates the advantages provided by its diversified and sustained business model in its own strong channel such as melia.com, which continued growing globally until September , (+ 1.7%) and already represents more than 30% of the Group's sales. Undoubtedly, the digital transformation we are driving must help us consolidate our leadership in the Mediterranean, the Caribbean and, increasingly, in Southeast Asia, through profitable and sustainable growth. "
For the Executive Vice President and CEO of the Group, “the sharp fall experienced in recent months by the price of its share is due to an over-reaction of the market to some signs of a decline in the tourism industry, which are temporary and non-structural, if we look at their causes and the sustained growth of demand and investment in the sector, as well as the strength of the US economy, the main market for Caribbean destinations where Meliá is a leading actor. "