- On a constant currency basis:
- Same store revenue per available room (“RevPAR”) up 9% over the prior-year quarter
- Total revenue up $8.1 million or 9% over the prior-year quarter
- Total adjusted EBITDA up $5.2 million over the prior-year quarter
- Using actual dollars:
- Same store RevPAR down 1% from the prior-year quarter
- Total revenue of $99.1 million, consistent with the prior-year quarter
- Total adjusted EBITDA of $7.9 million, up $3.6 million or 84% over the prior-year quarter
- Reported net losses attributable to Belmond Ltd. of $1.6 million, a $7.9 million improvement over the prior-year quarter
HAMILTON, Bermuda – Belmond Ltd. (NYSE:BEL) (the “Company”), owners, part-owners or managers of 46 luxury hotel, restaurant, tourist train and river cruise properties operating in 23 countries, today announced its results for the first quarter ended March 31, 2016.
Roeland Vos, president and chief executive officer, remarked: “We started 2016 with solid year-over-year growth. Our first quarter constant currency RevPAR growth exceeded our guidance, and our total adjusted EBITDA was more than double our result for the prior-year quarter on a constant currency basis. While the first quarter is seasonally our lowest revenue quarter, we are encouraged by the strong start, which I believe sets the tone for our full year performance.
"In addition to driving strong near-term results, we have remained focused on executing against our long-term strategic plan. We continued to re-invest in our portfolio during the quarter, focusing on projects with attractive forecasted returns that we expect will improve performance and drive greater value from our existing assets. We also maintained our focus on expanding our global footprint through our investment in Belmond Grand Hibernian, which will allow us to bring our luxury train operating expertise to Ireland starting with the train's scheduled inaugural journey in August. I am pleased with the progress we have made at this early juncture in 2016 and expect to gain more traction as we continue to execute on our strategic plan.
"Looking forward, we continue to forecast healthy year-over-year growth for the full year 2016. Although we currently see potential challenges for select parts of our portfolio in the second quarter, we expect that this temporary softness will be more than offset by a strong third quarter. We anticipate that our third quarter growth will come largely from increased demand for our European hotels during their peak summer months as well as the benefit of the Summer Olympic Games on Belmond Copacabana Palace in Rio de Janeiro, Brazil. For the full year 2016, we are maintaining our guidance for same store, constant currency RevPAR growth of between 3% and 7%."
First Quarter 2016 Operating Results
Total revenue for the first quarter of 2016 of $99.1 million tracked at the same level as total revenue for the first quarter of 2015. In constant currency, total revenue for the first quarter of 2016 increased $8.1 million or 9% over the first quarter of 2015.
Same store RevPAR for owned hotels for the first quarter of 2016 increased 9% over the prior-year quarter on a constant currency basis as a result of a 5% increase in average daily rate ("ADR") and a 3 percentage point increase in occupancy.
Total adjusted EBITDA for the first quarter of 2016 was $7.9 million, a $3.6 million or 84% increase over total adjusted EBITDA of $4.3 million for the first quarter of 2015. In constant currency, total adjusted EBITDA for the first quarter of 2016 increased $5.2 million.
Adjusted net losses from continuing operations for the first quarter of 2016 were $3.2 million ($0.03 loss per common share), a $2.9 million or 48% improvement over adjusted net losses from continuing operations of $6.1 million ($0.06 loss per common share) for the first quarter of 2015.
Reported net losses attributable to Belmond Ltd. for the first quarter of 2016 were $1.6 million ($0.02 loss per common share), a $7.9 million improvement over reported net losses attributable to Belmond Ltd. of $9.5 million ($0.09 loss per common share) for the first quarter of 2015.
Recent Company Highlights
- Further expands Italian room product offering with addition of four new junior suites in Sicily — On May 1, 2016, Belmond Villa Sant'Andrea, Taormina launched four new junior suites. Constructed from relocated back-of-house space, these new luxury junior suites provide the ultimate sea views and increase the resort's key count by 6% — from 65 to 69.
- Receives prestigious award for two North American properties — In February 2016, Belmond Maroma Resort & Spa, Riviera Maya, Mexico received the Forbes Travel Guide five-star rating for the first time. At the same time, Belmond El Encanto, Santa Barbara, California retained five stars for the third year running. The annual list by Forbes is considered one the most highly regarded ratings lists in the world, recognizing the best in hotels, restaurants and spas.
First Quarter 2016 Business Unit Results
Owned hotels:
Europe:
For the first quarter of 2016, revenue from owned hotels was $13.4 million, an increase of $1.5 million or 13% from $11.9 million for the first quarter of 2015. In constant currency, revenue for the region for the first quarter of 2016 increased $2.3 million or 21% over the prior-year quarter primarily due to revenue growth of $1.0 million or 31% at Belmond Reid's Palace, Madeira, Portugal largely due to increased demand for the destination, which translated into a 13 percentage point occupancy increase. Additionally, revenue at Belmond Hotel Cipriani, Venice, Italy was up $0.5 million or 72% primarily due to Easter occurring in the first quarter of 2016 versus the second quarter of 2015, which contributed to a 58% year-over-year RevPAR increase driven nearly equally by occupancy and ADR.
In constant currency, same store RevPAR for owned hotels in the region increased 30% over the prior-year quarter due to a 13% increase in ADR and a 6 percentage point increase in occupancy.
Adjusted EBITDA for the region for the quarter was a loss of $5.6 million, an improvement of $1.2 million or 18% over an adjusted EBITDA loss of $6.8 million for the first quarter of 2015. In constant currency, adjusted EBITDA for the region for the first quarter of 2016 improved $1.1 million or 17% over the prior-year quarter mainly due to adjusted EBITDA growth of $0.7 million at Belmond Reid's Palace and $0.6 million or 29% at Belmond Hotel Cipriani.
North America:
Revenue from owned hotels for the first quarter of 2016 was $39.6 million, down $1.4 million or 3% from $41.0 million for the first quarter of 2015. This decrease was largely the result of a $0.7 million or 16% year-over-year revenue decline at Belmond El Encanto primarily due to a large hotel buyout in the prior-year quarter that did not reoccur in the first quarter of 2016, and a $0.7 million or 12% revenue decrease at Belmond Maroma Resort & Spa largely due to increased local competition and the re-opening of renovated hotels in the Los Cabos resort area on Mexico's Baja Peninsula in the second half of 2015.
In constant currency, same store RevPAR for owned hotels in the region was down 3% from the prior-year quarter due to a 2% decrease in ADR and occupancy that was consistent with the prior-year quarter.
Adjusted EBITDA for the region for the quarter was $10.1 million, a decrease of $0.7 million or 6% from $10.8 million for the first quarter of 2015. The year-over-year decline for the quarter was primarily the result of a $0.5 million adjusted EBITDA decrease at Belmond El Encanto.
Rest of world:
Revenue from owned hotels for the first quarter of 2016 was $35.3 million, a decrease of $1.5 million or 4% from $36.8 million for the first quarter of 2015 primarily due to year-over-year currency depreciation. In constant currency, revenue for the first quarter of 2016 increased $5.4 million or 18% over the prior-year quarter principally as a result of revenue growth of $2.0 million or 20% at Belmond Copacabana Palace; $1.6 million or 36% at Belmond Hotel das Cataratas, Iguassu Falls, Brazil; $0.8 million or 16% at Belmond Mount Nelson Hotel, Cape Town, South Africa; and $0.4 million at Belmond Safaris, Botswana. Year-over-year revenue growth was mainly driven by 21% RevPAR growth at Belmond Copacabana Palace due to increases in both occupancy and ADR; 35% RevPAR growth at Belmond Hotel das Cataratas largely due to an uplift in ADR as a result of certain business contracted in U.S. dollars; and 14% RevPAR growth at Belmond Mount Nelson Hotel partially due to ADR growth that the hotel was able to achieve as a result of investments the Company made over the past several years in the renovation of the hotel's room product. Belmond Eagle Island Lodge, one of the Company's three safari lodges in Botswana, was operational in the first quarter of 2016 following a complete renovation that required a planned closure from January to November 2015.
In constant currency, same store RevPAR for owned hotels in the region was up 16% over the prior-year quarter due to an 11% increase in ADR and a 3 percentage point increase in occupancy.
Adjusted EBITDA for the region for the quarter of $11.5 million increased $0.1 million or 1% over adjusted EBITDA of $11.4 million for the prior-year quarter. In constant currency, adjusted EBITDA for the region increased $2.2 million or 24% over the prior-year quarter largely due to adjusted EBITDA growth of $0.7 million or 89% at Belmond Hotel das Cataratas, $0.6 million or 18% at Belmond Copacabana Palace and $0.5 million or 23% at Belmond Mount Nelson Hotel.
Part-owned / managed hotels:
Adjusted EBITDA for the first quarter of 2016 of $0.4 million increased $0.7 million over an adjusted EBITDA loss of $0.3 million for the first quarter of 2015. Adjusted EBITDA for the prior-year quarter included a loss of $0.5 million for Hotel Ritz Madrid, which the Company and its joint venture partner sold in May 2015.
Owned trains & cruises:
Revenue for the first quarter of 2016 was $6.4 million, down $1.2 million or 16% from $7.6 million for the first quarter of 2015. In constant currency, revenue decreased $1.0 million or 13% primarily as a result of a $0.9 million or 32% revenue decline for Belmond Road to Mandalay, one of the Company's two river cruise ships in Myanmar, largely as a result of increased competition.
Adjusted EBITDA for the quarter was a loss of $2.8 million, a $0.5 million or 22% decline from an adjusted EBITDA loss of $2.3 million for the first quarter of 2015. In constant currency, adjusted EBITDA declined $0.7 million or 35% largely due to a $0.9 million or 70% decrease in adjusted EBITDA for Belmond Road to Mandalay.
Part-owned / managed trains:
Adjusted EBITDA for the first quarter of 2016 of $3.7 million increased $1.8 million or 95% over adjusted EBITDA of $1.9 million for the first quarter of 2015 as a result of a $1.9 million increase in EBITDA recognized for the Company’s PeruRail joint venture largely as a result of the joint venture commencing transport of copper concentrate from the Las Bambas mine, which began production at the end of 2015.
Central costs:
For the first quarter of 2016, adjusted central overheads of $6.6 million were $0.6 million or 8% lower than adjusted central overheads of $7.2 million for the prior-year quarter primarily due to payroll savings related to a weaker British pound than in the prior-year quarter and other cost savings.
The Company also incurred $1.7 million of adjusted non-cash share-based compensation expense for the current-year quarter, a $0.2 million or 11% reduction in expense from the $1.9 million adjusted non-cash share-based compensation expense incurred for the first quarter of 2015.
Investments
The Company continued its strategy of disciplined re-investment in core assets and projects with attractive forecasted returns. During the first quarter of 2016, the Company invested a total of $11.0 million in its portfolio, including $2.2 million for project and maintenance capital expenditures incurred at the Company's Italian hotels during their annual winter closure periods; $2.0 million at Belmond Charleston Place largely to add a new high-end sports pub, which is expected to open in the second quarter of 2016, as well as for payments related to the hotel’s rooms renovation project; $1.5 million on the Belmond Grand Hibernian luxury sleeper train, which is scheduled to commence operations in Ireland in August 2016; and $0.8 million on the Venice Simplon-Orient-Express largely for required maintenance works.
Share Repurchases
In the first quarter of 2016, the Company repurchased approximately 0.2 million of the Company's class A common shares at a total cost of approximately $2.0 million. Since the program's March 2015 inception and through March 31, 2016, the Company repurchased approximately 3.6 million shares at a total cost of approximately $40.0 million.
Balance Sheet
At March 31, 2016, the Company had total debt of $589.9 million and cash balances of $128.1 million, resulting in total net debt of $461.8 million and a ratio of net debt to trailing twelve-months total adjusted EBITDA of 3.8 times.
Outlook
The Company is providing the following RevPAR and other guidance for the second quarter and full year 2016:
Second Quarter 2016
Full Year 2016
Same store worldwide owned hotel RevPAR growth guidance (1) On a constant currency basis (1)% – 3% 3% – 7% In U.S. dollars (4)% – 0% 0% – 4% Statement of operations guidance ($ millions) Central overheads $6.5 – $7.5 $25.0 – $28.0 Share-based compensation $1.8 – $2.8 $6.7 – $9.7 Central marketing costs $0.6 – $1.6 $2.8 – $5.8 Depreciation & amortization $12.9 – $13.9 $50.4 – $53.4 Interest $6.8 – $7.8 $27.8 – $30.8 Tax (benefit) / expense $11.1 – $12.1 $26.1 – $29.1 Cash flow guidance ($ millions) Cash interest expense $5.9 – $6.9 $26.5 – $29.5 Cash taxes $3.3 – $4.3 $22.4 – $25.4 Scheduled loan repayments $0.8 – $1.8 $3.9 – $6.9
(1) Projected same store RevPAR growth for the second quarter ending June 30, 2016 excludes the operations of Belmond Eagle Island Lodge. Projected same store RevPAR growth for the full year ending December 31, 2016 excludes the operations of Belmond Eagle Island Lodge and Belmond La Residence d'Angkor, Siem Reap, Cambodia.
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http://investor.belmond.com/news/2016/05-04-2016-220132273.aspx
