NH Hoteles EBITDA Grows By 87% In The First Half Of 2010

The negative environment that the sector suffered in the 2009 financial year presented a very positive advance in the first half of 2010. The Group income reached €646.5M, a rise of 7.2%, and the EBITDA, which shows the operational evolution of NH Hoteles, reflected the significant market recovery and an increase in productivity which is worthy of note. The Company generated an EBITDA of €68M, practically double the same period of 2009, which is fundamentally due to the improvement in hotel activity in all the markets in which NH Hoteles operates.

The income from the hotel activity grew by 8.3%, as a consequence of an increase in occupancy in all the markets where the Company operates in the first half of the year. The increase in the levels of occupancy, of 12.4% in comparable hotels, permitted the RevPar (ratio that measures income per available room) to make an increase of 7.2%. It is worth pointing out that during the second quarter of 2010, the fall in prices has been halted completely, contributing positively to the increase in RevPar. The considerable increase in hotel activity contrasts with the slight increase in costs of 3.6%, thanks to the cost containment plan that the Company has maintained during the first half of 2010.

Among the initiatives of the asset rationalisation and divestment plan that the Company put into operation last year, the sale of four assets during the first six months of the year is particularly important. These sales, which involve cash income for the Group of €117M, are the result of the sale of three hotels in Mexico and one in London, which NH Hoteles announced in this period of the year. The asset sales implies €16.4M in non recurring revenues due to capital gains and €-21.6M due to differences in the exchange rate. As a result the Company has accounted €-5.2M of net effect.

Not considering extraordinary items (asset sales and provisions) the Group would have reduced its net losses 60% in the first half 2010.

On the other hand, NH Hoteles has cancelled the contracts of another nine hotels in the first half of 2010 as part of its unprofitable and/or non-strategic asset management plan (We attach a table of cancelled assets at the end of the note).

Click here for the full press release.