HAMILTON, BERMUDA–(BUSINESS WIRE)–Orient-Express Hotels Ltd. (NYSE: OEH, www.orient-expresshotelsltd.com
and www.belmond.com)
(the “Company”), owners, part-owners or managers of 45 luxury hotel,
restaurant, tourist train and river cruise properties operating in 22
countries, today announced its results for the first quarter ended March
31, 2014.
Total revenue was $101.8 million in the first quarter of 2014, down $0.2
million from $102.0 million in the first quarter of 2013. Total hotels
revenue for the first quarter was $88.9 million, a decrease of $1.9
million from $90.8 million in the first quarter of 2013. This 2%
decrease was largely driven by the year-over-year depreciation of
several currencies, most notably the Brazilian real (down 18%), South
African rand (down 21%) and Russian ruble (down 15%), as well as the
planned hotel closure for renovation of Belmond Miraflores Park, Lima,
Peru. In local currency and excluding Belmond Miraflores Park, total
hotels revenue for the first quarter of 2014 would have increased $5.9
million or 7% over the prior-year quarter. Total trains cruises
revenue in the first quarter was $12.9 million, up $1.7 million or 15%
from $11.2 million in the first quarter of 2013.
Total adjusted EBITDA was $0.7 million for the first quarter of 2014, a
decrease of $3.8 million from the $4.5 million recorded in the first
quarter of 2013. In local currency and excluding Belmond Miraflores Park
and costs incurred to launch the Company’s new brand, total adjusted
EBITDA for the first quarter of 2014 would have increased $0.8 million
or 20% over the prior-year quarter.
Adjusted net losses from continuing operations for the first quarter of
2014 were $11.3 million ($0.11 loss per common share) compared with
adjusted net losses of $8.2 million ($0.08 loss per common share) in the
first quarter of 2013.
John Scott, president and chief executive officer, commented: “We
started 2014 with two milestone events for our Company – the
introduction of our new brand Belmond and the completion of our first
corporate debt facility. These two important steps help lay the
foundation for our strategy to improve and extend our core and will
allow us to operate in a more aligned and efficient manner. Our new debt
facility provides a more transparent capital structure, extended
maturity profile and additional liquidity to execute on our long-term
strategy. Finally, we expect Belmond, which has been well received by
guests and the luxury travel trade, to drive incremental revenue through
increased cross-visitation among our existing guests and to attract new
guests to our unique luxury travel experiences.
“Results for our first quarter, seasonally our weakest of the year, were
mixed. On the positive side, demand for Belmond Mount Nelson Hotel in
Cape Town, South Africa was the strongest we have seen in the last few
years. In local currency, the hotel’s EBITDA grew $1.2 million or 64%
over the prior-year quarter. Additionally, Belmond Charleston Place in
South Carolina continued to outperform. The hotel generated its
highest-ever first quarter EBITDA at $4.4 million, marking the fourth
consecutive quarter that the hotel set a new quarterly EBITDA record.
Additionally, Belmond Orcaella, which launched in July 2013 as our
second Myanmar river cruise, contributed EBITDA of $0.6 million in its
inaugural first quarter.
“As part of our strategy to selectively re-invest in our portfolio,
Belmond Miraflores Park was closed for planned renovation for the entire
first quarter. We took a long-term view on this investment, and,
although our quarterly results were negatively impacted, the renovation
was completed on time and on budget and will allow us to maintain our
market-leading position in Peru and capture incremental demand for our
Peruvian journeys. We also incurred $0.6 million of new brand costs in
the quarter as part of our $5 million year-one brand launch. Again, we
are taking a long-term view on this investment, understanding that the
temporary reduction in EBITDA was worth the future value we believe
Belmond will add to our Company.
“On the macro-economic front, we encountered some unexpected headwinds
during the quarter in the form of material currency depreciation at
several of our larger hotels. The average U.S. dollar exchange rates for
the Brazilian real, South African rand and Russian ruble were 18%, 21%
and 15% lower than they had been in the prior-year quarter,
respectively. The impact of the depreciation of these three currencies
on the U.S. dollar translation of our results equated to $5.4 million of
decreased revenue and $1.5 million of decreased EBITDA for the first
quarter.
“With the first quarter of 2014 now behind us, I’m encouraged by our
forecast for the remainder of the year. For the second quarter, owned
hotels RevPAR growth is forecasted to be between 7% and 11% in local
currency. And, for the full year 2014, RevPAR forecast remains the same
as we indicated in February, with projected local currency growth of
between 4% and 8%.”
Company Highlights
The Company launched Belmond, the new brand name under which it now
markets and operates its collection of luxury hotels and travel
experiences, to consumers on March 10, 2014. This launch featured a
comprehensive public relations and media outreach program, dedicated
consumer mailings, social media engagement and a new corporate website, www.belmond.com.
The Company will support the introduction of Belmond with a first-year
expenditure of approximately $5 million and a further approximate $10
million over the subsequent four years. The first-year investment
includes enhanced promotional and marketing initiatives, including the
Company’s first large-scale print and electronic advertising campaign,
which will commence in the third quarter of 2014.
On March 21, 2014, the Company completed a $657.0 million senior secured
credit facility, consisting of a $552.0 million seven-year term loan
(“Term Loan B”) and a $105.0 million five-year, multi-currency revolving
credit facility. The Term Loan B comprises a $345.0 million U.S.
dollar-denominated tranche and a €150.0 million euro-denominated tranche
($207.0 million as of the completion date). The Company used the Term
Loan B proceeds to refinance all of the funded debt of the Company and
its subsidiaries other than the debt of Belmond Charleston Place, a
consolidated variable interest entity with separate non-recourse
financing.
Also on March 21, 2014, the Company completed the previously announced
sale of Belmond The Inn at Perry Cabin, St. Michaels, Maryland to an
affiliate of Capital Properties for gross proceeds of $39.7 million and
commenced a ten-year third-party management agreement, in line with the
Company’s stated strategy to enter the third-party management arena. As
part of the management contract, the Company funded $3.0 million of key
money to be used for agreed capital enhancements to the 78-key property.
During the first quarter of 2014, the Company continued its strategy of
improving its core assets by opening two new restaurants at two of its
most iconic hotels. In February, the Company completed and opened MEE,
Rio de Janeiro’s first gourmet pan-Asian restaurant, at Belmond
Copacabana Palace. The vision of celebrity chef Ken Hom, the 88-seat
restaurant features contemporary Asian-inspired décor and a dedicated
sushi bar. In March, Belmond Hotel Cipriani, Venice, Italy opened for
the 2014 season with a new restaurant designed by Adam Tihany and named
Oro, which means “gold” in Italian. In keeping with the restaurant’s new
name, the main room features a domed gold leaf ceiling with a
custom-made Murano glass chandelier and three Venetian glass sculptures.
On April 16, 2014, the Company re-opened the 81-key Belmond Miraflores
Park hotel following an approximate $7.5 million complete renovation.
The hotel had been closed from December 1, 2013 and re-opened on time
and on budget ahead of Peru’s high season. To address Lima’s growing
appeal to both corporate and leisure travelers, the project included a
full refurbishment and reconfiguration of the top three floors of the
hotel, including 29 rooms and suites, as well as the creation of a
dedicated business floor with a new business lounge. The project also
included the soft refurbishment of the hotel’s remaining 52 rooms as
well as the lobby bar and ground-floor restaurant.
During the quarter, the Company made two promotions within the senior
management team – Amy Brandt to the position of vice president,
corporate finance investor relations and Abigail Hunt to the position
of vice president, legal. Ms. Brandt will continue to lead the Company’s
investor relations program, investment approval process and cash flow
forecasting, while also providing support to the chief executive officer
in long-term strategy development. Ms. Hunt will continue to provide key
legal advice and support across the range of transactional, operational
and regulatory matters in which the Company is engaged in the United
Kingdom and abroad.
Operating Performance
Owned hotels:
Europe:
In the first quarter of 2014, revenue from owned hotels was $14.6
million, a decrease of $1.5 million or 9% from $16.1 million in the
first quarter of 2013. The decline was primarily driven by a $1.2
million year-over-year decrease at Belmond Grand Hotel Europe, St.
Petersburg, Russia, which was negatively impacted by a 15%
year-over-year depreciation in the ruble, representing $0.8 million of
the hotel’s total revenue decline. The hotel’s results were also
affected by increased local competition and softer food and beverage
revenue partially as a result of the planned closure for redevelopment
of two restaurants.
Same store RevPAR for owned hotels in the region was flat in local
currency and down 1% in U.S. dollars compared to the prior-year quarter
due to 2 percentage point increase in occupancy that was offset by a 4%
decrease in average daily rate (“ADR”) in local currency (5% decrease in
U.S. dollars).
EBITDA for the first quarter was a loss of $8.4 million, a decrease of
$0.4 million or 5% from $8.0 million in the first quarter of 2013. The
decrease was primarily the result of a $0.3 million year-over-year
decrease in EBITDA at Belmond Grand Hotel Europe.
North America:
Revenue from owned hotels for the first quarter of 2014 was $38.2
million, up $3.7 million or 11% from $34.5 million in the first quarter
of 2013. Revenue growth was primarily driven by Belmond El Encanto,
Santa Barbara, California (which opened on March 18, 2013) and Belmond
Charleston Place, which were up $3.0 million and $1.7 million,
respectively. Partially offsetting this revenue growth were decreases at
Belmond La Samanna, St. Martin, French West Indies and Belmond The Inn
at Perry Cabin of $0.6 million and $0.3 million, respectively.
Same store RevPAR for owned hotels in the region, which excludes Belmond
El Encanto and Belmond The Inn at Perry Cabin, was flat to the
prior-year quarter in both U.S. dollars and local currency, as both ADR
and occupancy were in line with prior-year results.
EBITDA for the region was $7.3 million in the quarter, up $0.9 million
or 14% from $6.4 million in the first quarter of 2013. This growth was
primarily due to Belmond El Encanto, with EBITDA growth of $1.4 million
– from a loss of $2.0 million in its opening quarter in 2013 to a loss
of $0.6 million in the first quarter of 2014, and Belmond Charleston
Place, which set a new record for its first quarter EBITDA, with
year-over-year growth of $0.8 million or 21% due to strong groups and
banqueting business. Improvements at these two properties were partially
offset by year-over-year declines at Belmond La Samanna (down $0.7
million), which experienced cancellations and reduced demand as a result
of guest concerns over reports of an outbreak of a mosquito-borne
illness in St. Martin and elsewhere in the Caribbean; ‘21’ Club, New
York, New York (down $0.2 million), which was negatively affected in the
first two months of the year by severe winter weather; and Belmond The
Inn at Perry Cabin (down $0.2 million).
Rest of World:
Revenue from owned hotels for the first quarter of 2014 was $36.5
million, a decrease of $4.7 million or 11% compared to $41.2 million in
the first quarter of 2013. The decrease was driven by the anticipated
$2.3 million revenue decline at Belmond Miraflores Park, which was
closed for planned renovations for the entire first quarter of 2014, and
a $5.1 million decrease resulting from year-over-year currency
depreciation, the most material of which were decreases in the Brazilian
real and South African rand of 18% and 21%, respectively. On a local
currency basis and excluding Belmond Miraflores Park, revenue from owned
hotels in the region would have been up $2.7 million or 7% over the
prior-year quarter. This $2.7 million increase was primarily the result
of increased demand for the Company’s two Brazilian hotels, which were
collectively up $1.4 million or 6% in local currency, and growth at
Belmond Mount Nelson Hotel, which had a year-over-year revenue increase
of $1.1 million or 20% in local currency due to 29% local currency
RevPAR growth.
Same store RevPAR for owned hotels in the region, which excludes Belmond
Miraflores Park, was up 8% in local currency but down 6% in U.S.
dollars. RevPAR growth was driven by 10% local currency ADR growth (down
4% in U.S. dollars), partially offset by 1 percentage point decline in
occupancy.
EBITDA in the first quarter of 2014 of $10.8 million was $2.0 million or
16% less than in the prior-year quarter due primarily to the planned
closure of Belmond Miraflores Park, which contributed $1.5 million of
the decrease, and currency depreciation. Excluding the impact of these
items, EBITDA would have increased $0.9 million or 7% over the
prior-year quarter due largely to the strength of Belmond Mount Nelson
Hotel.
Part-owned / managed hotels:
Revenue in the first quarter of 2014 was a loss of $0.4 million, a $0.6
million improvement from the loss of $1.0 million in the first quarter
of 2013. This increase was primarily attributable to Hotel Ritz, Madrid,
Spain, which had an 11 percentage point increase in occupancy as a
result of new sales strategies and early signs of an improvement in the
Spanish economy.
EBITDA for the first quarter of 2014 was a loss of $0.5 million, an
improvement of $1.5 million from the EBITDA loss of $2.0 million for the
first quarter of 2013 due to growth from Hotel Ritz, management
restructuring charges incurred in the first quarter of 2013 and a
reduction in overhead expenses for the first quarter of 2014 following
the closure of the Singapore development office in 2013.
Owned trains cruises:
Revenue for the first quarter of 2014 was $11.0 million, up $1.9 million
or 21% from $9.1 million in the first quarter of 2013. This growth was
primarily the result of the Belmond Orcaella river cruise in Myanmar,
which launched in July 2013 and generated $1.7 million of revenue in the
first quarter of 2014.
An EBITDA loss of $0.8 million for the first quarter of 2014 was a $0.2
million or 20% improvement from the EBITDA loss of $1.0 million
recognized in the first quarter of 2013 primarily due to a combined $0.8
million increase in EBITDA from the Company’s two river cruisers in
Myanmar, partially offset by a $0.6 million net EBITDA decrease for the
Company’s European train offerings.
Part-owned / managed trains:
EBITDA of $1.9 million was $0.2 million or 10% less than the $2.1
million recognized in the first quarter of 2013 primarily due to a 13%
year-over-year decrease in freight business for the Company’s PeruRail
joint venture.
Central costs:
In the first quarter of 2014, central overheads were $7.5 million
compared to $8.5 million in the prior-year period, a savings of $1.0
million primarily due to management restructuring costs incurred in the
first quarter of 2013 and reduced legal and professional fees. First
quarter 2014 central overheads included $0.3 million of management
restructuring costs as compared to $1.0 million in the first quarter of
2013.
The Company also incurred $0.8 million of non-cash share-based
compensation expense compared to $1.6 million in the first quarter of
2013. Share-based compensation expense for the first quarter of 2014 was
reduced by a credit for lapsed share-based awards of employees no longer
with the Company.
Central marketing costs in the first quarter of 2014 of $0.9 million
were $0.5 million higher than the prior-year quarter due to expenses
related to the new Belmond brand.
Gain on disposal of property, plant and
equipment:
In the first quarter of 2014, the Company recognized a $3.7 million gain
on disposal of property, plant and equipment related to its sale of
Belmond The Inn at Perry Cabin in March 2014.
Depreciation and amortization:
Depreciation and amortization expense for the first quarter of 2014 of
$12.1 million was up $0.6 million from the first quarter of 2013 as a
result of the completion of several recent capital projects.
Loss on extinguishment of debt:
In connection with the March corporate debt refinancing, the Company
recognized a $14.5 million loss on extinguishment of debt for the first
quarter of 2014, which included an $8.9 million write-off of unamortized
deferred financing costs, $4.0 million in swap cancellation costs and
$1.3 million of fees to prepay the Company’s previous loans.
Interest:
Interest expense for the first quarter of 2014 of $9.1 million was $2.1
million higher than the prior-year quarter charge of $7.0 million. The
Company did not capitalize any interest in the first quarter of 2014 but
capitalized $1.1 million related to Belmond El Encanto in the prior-year
quarter.
Tax:
The tax benefit from continuing operations for the first quarter of 2014
was $10.6 million compared to a benefit of $6.1 million in the same
quarter in the prior year. The current-year quarter benefit included a
deferred tax credit of $2.9 million in respect of tax-deductible costs
incurred in repaying existing debt following completion of the Company’s
corporate debt facility in March 2014.
Investment:
In keeping with its strategy to selectively re-invest capital in its
core assets, the Company invested a total of $18.0 million in its
portfolio during the first quarter of 2014, including $4.5 million at
Belmond Charleston Place primarily for the first phase of the rooms
renovation project; $3.5 million at Belmond Grand Hotel Europe primarily
for renovating the hotel’s restaurants and kitchen and converting 19
historic rooms into suites; $2.5 million at Belmond Miraflores Park for
hotel renovations; $1.3 million at Belmond Le Manoir aux Quat’Saisons,
Oxfordshire, England primarily for the construction of a new glass
conservatory; $3.1 million for project and maintenance capital
expenditures incurred at the Company’s Italian hotels during their
annual winter closure periods, including the renovation of Belmond Hotel
Cipriani’s Oro restaurant and the construction of six new suites at
Belmond Villa Sant’Andrea, Taormina Mare, Sicily; and the balance for
routine capital expenditures.
Balance Sheet
At March 31, 2014, the Company had total debt (including the current
portion and debt of consolidated variable interest entities) of $647.5
million, working capital loans of $nil and cash balances of $138.7
million (including $4.3 million of total restricted cash, of which $1.3
million was in other assets), resulting in total net debt of $508.8
million compared to total net debt at the end of 2013 of $503.0 million.
At March 31, 2014, the ratio of net debt to trailing twelve-month
adjusted EBITDA was 4.4 times, up from 4.2 times at December 31, 2013.
Undrawn amounts available to the Company at March 31, 2014 under lines
of credit, including the Company’s corporate revolving credit facility,
were $101.8 million, bringing total cash availability (excluding
restricted cash) at March 31, 2014 to $236.2 million.
At March 31, 2014, approximately 44% of the Company’s debt was at fixed
interest rates and 56% was at floating interest rates. The weighted
average maturity of the debt was approximately 6.2 years and the
weighted average interest rate was 4.5%. The Company had $7.3 million of
debt repayments due within twelve months.
* * * * * * * *
ORIENT-EXPRESS HOTELS LTD.
SUMMARY OF OPERATING RESULTS
(Unaudited)
$ millions – except per share amounts
Three months ended
March 31,
2014
2013
Revenue and earnings from unconsolidated companies
Owned hotels:
Europe
14.6
16.1
North America
38.2
34.5
Rest of world
36.5
41.2
Total owned hotels
89.3
91.8
Part-owned / managed hotels
(0.4
)
(1.0
)
Total hotels
88.9
90.8
Owned trains cruises
11.0
9.1
Part-owned / managed trains
1.9
2.1
Total trains cruises
12.9
11.2
Total (1)
101.8
102.0
Analysis of earnings
Owned hotels:
Europe
(8.4
)
(8.0
)
North America
7.3
6.4
Rest of world
10.8
12.8
Total owned hotels
9.7
11.2
Part-owned / managed hotels
(0.5
)
(2.0
)
Total hotels
9.2
9.2
Owned trains cruises
(0.8
)
(1.0
)
Part-owned / managed trains
1.9
2.1
Total trains cruises
1.1
1.1
Central overheads
(7.5
)
(8.5
)
Share-based compensation
(0.8
)
(1.6
)
Central marketing costs
(0.9
)
(0.4
)
EBITDA before gain on disposal and impairment
1.1
(0.2
)
Gain on disposal of property, plant and equipment
3.7
-
Impairment
-
(35.7
)
EBITDA
4.8
(35.9
)
Depreciation amortization
(12.1
)
(11.5
)
Loss on extinguishment of debt
(14.5
)
-
Interest
(9.1
)
(7.0
)
Foreign exchange
0.4
2.1
Losses before tax
(30.5
)
(52.3
)
Tax
10.6
6.1
Net losses from continuing operations
(19.9
)
(46.2
)
Discontinued operations
(0.8
)
(0.8
)
Net losses
(20.7
)
(47.0
)
Net earnings attributable to non-controlling interests
(0.1
)
(0.2
)
Net losses attributable to Orient-Express Hotels Ltd.
(20.8
)
(47.2
)
Net losses per common share attributable to Orient-Express Hotels
Ltd.
(0.20
)
(0.46
)
Number of shares – millions
103.72
103.01
ORIENT-EXPRESS HOTELS LTD.
SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS
Three months ended
March 31,
2014
2013
Room Nights Available
Europe
43,585
47,972
North America
71,370
63,650
Rest of world
92,430
91,260
Worldwide
207,385
202,882
Rooms Nights Sold
Europe
15,672
16,510
North America
44,165
40,961
Rest of world
57,209
62,818
Worldwide
117,046
120,289
Occupancy
Europe
36%
34%
North America
62%
64%
Rest of world
62%
69%
Worldwide
56%
59%
Average Daily Rate (in US dollars)
Europe
402
424
North America
473
472
Rest of world
406
410
Worldwide
431
433
RevPAR (in US dollars)
Europe
145
146
North America
293
303
Rest of world
251
282
Worldwide
243
257
Same Store RevPAR (in US dollars) (1)
Europe
145
146
North America
329
327
Rest of world
272
289
Worldwide
259
264
Same Store RevPAR (% change) (1)
US dollar
Local currency
Europe
-1%
0%
North America
1%
0%
Rest of world
-6%
8%
Worldwide
-2%
5%
ORIENT-EXPRESS HOTELS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
$ millions
March 31,
December 31,
2014
2013
Assets
Cash
134.4
123.2
Restricted cash
3.0
6.0
Accounts receivable
36.3
35.5
Due from unconsolidated companies
9.5
11.8
Prepaid expenses and other
43.0
25.9
Inventories
44.9
45.0
Other assets held for sale
0.7
34.4
Total current assets
271.8
281.8
Property, plant equipment, net of accumulated depreciation
1,076.4
1,121.7
Property, plant equipment, net of accumulated depreciation of
consolidated
variable interest entities
191.5
187.9
Investments in unconsolidated companies
63.1
63.4
Goodwill
148.6
156.9
Other intangible assets
14.2
14.2
Other assets
54.3
54.0
Total assets
1,819.9
1,879.9
Liabilities and Equity
Working capital loans
-
0.1
Accounts payable
21.0
23.8
Accrued liabilities
76.7
74.2
Deferred revenue
47.6
37.0
Other liabilities held for sale
-
1.6
Current portion of long-term debt and capital leases
5.5
71.0
Current portion of long-term debt of consolidated variable interest
entities
1.8
1.8
Total current liabilities
152.6
209.5
Long-term debt and obligations under capital leases
546.3
472.6
Long-term debt of consolidated variable interest entities
93.9
94.3
Deferred income taxes
100.4
108.5
Deferred income taxes of consolidated variable interest entities
61.0
60.9
Other liabilities
24.3
23.4
Total liabilities
978.5
969.2
Shareholders’ equity
839.8
908.3
Non-controlling interests
1.6
2.4
Total equity
841.4
910.7
Total liabilities and equity
1,819.9
1,879.9
ORIENT-EXPRESS HOTELS LTD.
RECONCILIATIONS AND ADJUSTMENTS
(Unaudited)
$ millions – except per share amounts
Three months ended
March 31,
2014
2013
EBITDA
4.8
(35.9)
Adjusted items:
Pre-opening expenses (1)
-
2.1
Management restructuring (2)
(0.5)
1.6
Write-down of assets (3)
-
0.6
Acquisition proposal costs (4)
-
0.2
Brand-related costs (5)
0.1
-
Amortization of share-based compensation (6)
-
0.2
Gain on disposal (7)
(3.7)
-
Impairment (8)
-
35.7
Total adjusted EBITDA
0.7
4.5
Reported net losses attributable to Orient-Express Hotels Ltd.
(20.8)
(47.2)
Net earnings attributable to non-controlling interests
(0.1)
(0.2)
Reported net losses
(20.7)
(47.0)
Discontinued operations net of tax
0.8
0.8
Net losses from continuing operations
(19.9)
(46.2)
Adjusted items net of tax:
Pre-opening expenses (1)
-
1.4
Management restructuring (2)
(0.6)
1.1
Write-down of assets (3)
-
0.5
Acquisition proposal costs (4)
-
0.2
Brand-related costs (5)
0.1
-
Amortization of share-based compensation (6)
-
0.2
Gain on disposal (7)
(2.2)
-
Impairment (8)
-
35.7
Loss on extinguishment of debt (9)
11.6
-
Interest adjustments (10)
-
0.4
Foreign exchange (11)
(0.3)
(1.5)
Adjusted net losses from continuing operations
(11.3)
(8.2)
Reported EPS
(0.20)
(0.46)
Reported EPS from continuing operations
(0.19)
(0.45)
Adjusted EPS from continuing operations
(0.11)
(0.08)
Number of shares (millions)
103.72
103.01
ORIENT-EXPRESS HOTELS LTD.
RECONCILIATIONS AND ADJUSTMENTS (CONTINUED)
(Unaudited)
$ millions
Twelve months
ended March 31,
Three months ended
March 31,
Year ended
December 31,
2014
2014
2013
2013
EBITDA
111.3
4.8
(35.9
)
70.6
Adjusted items:
Pre-opening expenses (1)
0.9
-
2.1
3.0
Management restructuring (2)
2.5
(0.5
)
1.6
4.6
Write-down of assets (3)
0.3
-
0.6
0.9
Acquisition proposal costs (4)
(0.3
)
-
0.2
(0.1
)
Brand-related costs (5)
2.0
0.1
-
1.9
Post-retirement benefit (6)
0.5
-
-
0.5
Amortization of share-based compensation (7)
1.6
-
0.2
1.8
VAT settlement (8)
0.1
-
-
0.1
Gain on disposal (9)
(3.7
)
(3.7
)
-
-
Impairment (10)
0.7
-
35.7
36.4
Total adjusted EBITDA
115.9
0.7
4.5
119.7
EBITDA
111.3
4.8
(35.9
)
70.6
Depreciation and amortization
(49.3
)
(12.1
)
(11.5
)
(48.7
)
(Loss) / gain on extinguishment of debt
(11.0
)
(14.5
)
-
3.5
Interest
(35.3
)
(9.1
)
(7.0
)
(33.2
)
Foreign exchange
(0.8
)
0.4
2.1
0.9
Earnings / (losses) before tax
14.9
(30.5
)
(52.3
)
(6.9
)
Tax
(14.8
)
10.6
6.1
(19.3
)
Net earnings / (losses) from continuing operations
0.1
(19.9
)
(46.2
)
(26.2
)
Discontinued operations
(5.3
)
(0.8
)
(0.8
)
(5.3
)
Net losses
(5.2
)
(20.7
)
(47.0
)
(31.5
)
ORIENT-EXPRESS HOTELS LTD.
NET DEBT TO ADJUSTED EBITDA CALCULATION
(Unaudited)
$ millions – except ratios
Twelve months ended and as at
March 31, 2014
December 31, 2013
Cash
Cash and cash equivalents
134.4
123.2
Restricted cash (including $1.3 million / $7.6 million classified
within
long-term other assets on the balance sheet)
4.3
13.6
Total cash
138.7
136.8
Total debt
Working capital loans
-
0.1
Current portion of long-term debt and capital leases
5.5
71.0
Current portion of long-term debt of consolidated variable interest
entities
1.8
1.8
Long-term debt and obligations under capital leases
546.3
472.6
Long-term debt held by consolidated variable interest entities
93.9
94.3
Total debt
647.5
639.8
Net debt
508.8
503.0
Total adjusted EBITDA
115.9
119.7
Net debt / total adjusted EBITDA
4.4x
4.2x
Management analyzes the operating performance of the Company on the
basis of earnings before interest, foreign exchange, tax (including tax
on unconsolidated companies), depreciation and amortization (EBITDA),
and believes that EBITDA is a useful measure of operating performance,
for example to help determine the ability to incur capital expenditure
or service indebtedness, because it is not affected by non-operating
factors such as leverage and the historical cost of assets. EBITDA is
also a financial performance measure commonly used in the hotel and
leisure industry, although the Company’s EBITDA may not be comparable in
all instances to that disclosed by other companies. EBITDA does
not represent net cash provided by operating, investing and financing
activities under U.S. generally accepted accounting principles (U.S.
GAAP), is not necessarily indicative of cash available to fund all cash
flow needs, and should not be considered as an alternative to earnings
from operations or net earnings under US GAAP for purposes of evaluating
operating performance.
Adjusted EBITDA and adjusted net earnings / (losses) of the Company
are non-GAAP financial measures and do not have any standardized
meanings prescribed by U.S. GAAP. They are, therefore, unlikely to be
comparable to similar measures presented by other companies, which may
be calculated differently, and should not be considered as an
alternative to net earnings, cash flow from operating activities or any
other measure of performance prescribed by U.S. GAAP. Management
considers adjusted EBITDA and adjusted net earnings / (losses) to be
meaningful indicators of operations and uses them as measures to assess
operating performance because, when comparing current period performance
with prior periods and with budgets, management does so after having
adjusted for non-recurring items, foreign exchange (a non-cash item),
disposals of assets or investments, and certain other items (some of
which may be recurring) that management does not consider indicative of
ongoing operations or that could otherwise have a material effect on the
comparability of the Company’s operations. Adjusted EBITDA and adjusted
net earnings / (losses) are also used by investors, analysts and lenders
as measures of financial performance because, as adjusted in the
foregoing manner, the measures provide a consistent basis on which the
performance of the Company can be assessed.
This news release and related oral presentations by management
contain, in addition to historical information, forward-looking
statements that involve risks and uncertainties. These include
statements regarding earnings and RevPAR outlook, investment plans, debt
refinancings, asset sales, benefits of a new brand and similar matters
that are not historical facts. These statements are based on
management’s current expectations, are not guarantees of performance and
are subject to a number of uncertainties and risks that could cause
actual results to differ materially from those described in the
forward-looking statements. Factors that may cause a difference include,
but are not limited to, those mentioned in the news release and oral
presentations, unknown effects on the travel and leisure markets of
terrorist activity and any police or military response, varying customer
demand and competitive considerations, failure to realize hotel bookings
and reservations and planned real estate sales as actual revenue,
inability to sustain price increases or to reduce costs, rising fuel
costs adversely impacting customer travel and the Company’s operating
costs, fluctuations in interest rates and currency values, uncertainty
of negotiating and completing proposed asset sales, debt refinancings,
capital expenditures and acquisitions, inability to reduce funded debt
as planned or to agree bank loan agreement waivers or amendments,
adequate sources of capital and acceptability of finance terms, possible
loss or amendment of planning permits and delays in construction
schedules for expansion projects, delays in reopening properties closed
for repair or refurbishment and possible cost overruns, shifting
patterns of tourism and business travel and seasonality of demand,
adverse local weather conditions, uncertain effects of the introduction
of new brands and possible challenges to the Company’s ownership of new
brands, the Company’s reliance on technology systems, changing global or
regional economic conditions and weakness in financial markets which may
adversely affect demand, legislative, regulatory and political
developments (including the evolving political situation in Ukraine and
its impact on current and future demand), and possible challenges to the
Company’s corporate governance structure. Further information regarding
these and other factors is included in the filings by the Company with
the U.S. Securities and Exchange Commission. The Company undertakes no
obligation to update or revise publicly any forward-looking statement,
whether due to new information, future events or otherwise.
* * * * * *
Orient-Express Hotels Ltd. will conduct a conference call on Thursday,
May 1, 2014 at 10:00 a.m. EDT (3:00 p.m. BST), which is accessible at +1
866 966 9439 (U.S. toll free) or +44 (0)145 255 5566 (standard
international) or 0800 694 0257 (U.K. freephone). The conference ID
number is 22074904. A re-play of the conference call will be available
by telephone until 1:00 p.m. EDT on Wednesday, May 7, 2014 and can be
accessed by calling +1 866 247 4222 (U.S. toll free) or +44 +44 (0)145
255 0000 (standard international). The conference ID number is 22074904.
A re-play will also be available on the Company’s website: www.orient-expresshotelsltd.com.
Financial media requiring further information should contact Vicky Legg,
Director of Corporate Communications, on +44 (0)20 3117 1380 or vicky.legg@belmond.com.
Orient-Express Hotels Ltd. Reports First Quarter 2014 Results
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