NH Hotel Group confirms financial objectives

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NH Hotel Group confirms financial objectives
Ramón Aragonés, NH Hotel Group
Wed November 13, 2019

Total Group revenues increased 5.7%, to € 1,257 million

NH Hotel Group today presented its results for the first nine months of 2019, which continue to demonstrate the strength of the Group's operating and financial model, and allow us to confirm that the Company is in a position to close the year with the best results in its history .

Ramón Aragonés, CEO of NH Hotel Group, highlighted “the great performance of the urban hotel segment in the main European capitals during the period allows us to confirm the annual objectives set at the beginning of the year and face the near future with a strong financial solvency, due to a low level of indebtedness. ”Likewise, Aragonés has pointed out,“ that the joint plans with Minor Hotels are progressing according to what is established, and proof of this is the recent start of operations by NH Hotel Group of the hotels of Minor Hotels in Portugal and the entry in the middle of the year of the Anantara Hotels, Resorts & Spas brand in Spain and its next arrival in Ireland ”.

The company has increased its total revenues by 5.7% in the first nine months of the year, reaching € 1,257 million. Spain has once again experienced the highest rise in all of Europe, with a comparable revenue increase of 9.5% and good developments in Madrid, Barcelona and secondary cities. The evolution was also positive in Italy (+ 3.8%) and Benelux (+ 1.4%), and a flatter behavior in the countries of Central Europe, due to a calendar of fairs in Germany more favorable in the same period from the previous year.

The improvement has been supported by a 4.5% increase in RevPAR (average income per available room), the main indicator of the evolution of hotel activity. The totality of this increase is due exclusively to the growth of the average price in the period, which reaches € 102.3, with no variation in occupancy, which stands at 71.8%.

The combination of increased revenues and cost control has revitalized the recurring EBITDA (1) of the Group, which during this period increased by 13%, reaching € 209 million (€ 401 million reported including the application of IFRS16 regulations) . This increase represents an increase of € 23 million compared to the same period of the previous year and an increase in the margin of one percentage point.

The lower financial costs and the good evolution of the hotel activity have allowed the recurring net profit to increase by € 25.5 million, to a total of € 70 million (€ 62 million including the impact of IFRS16 regulations). Including non-recurring activity, the total reported net income reaches € 66 million and reflects a reduction of € -27.6 million compared to the previous year, mainly due to the lower contribution of non-recurring activity in 2019 compared to the previous year, which experienced increased asset turnover activity (- € 45 million).

At the end of the third quarter, a low level of net financial debt of the Group is maintained at € -190 million, thanks to the strong cash generation. At the end of September, the cash position was € 268 million, despite assuming investments in Capex worth € 130 million and paying a gross dividend of € 59 million (15 cents per share paid on June 14 with 2018 benefit charge).

The good results obtained in all the items allow the Group to confirm the forecasts set at the beginning of the year to reach in 2019 a recurring EBITDA (1) of € 285 million and a recurring net profit of around € 100 million (in both objectives excluded the impact IFRS16, IAS29 and the positive contribution of Minor Hotels hotels in Portugal).

Revenues in the region grow 5% at real exchange rates up to € 88 million, partly explained by the accounting impact of IAS29 regulations for hyperinflation in Argentina since the third quarter of 2018. By countries: Mexico increases its revenues by 5% at real exchange rate; Argentina reports growth despite including the effects of hyperinflation and the strong devaluation of the currency; Colombia and Chile reduce their income by 7.8% at real exchange rates, affected by the negative evolution of the currency.


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