This summary is based on the first quarter fiscal 2007 earnings call conducted by Orient-Express Hotels Ltd. (OEH) on May 4, 2007.
President and Chief Executive Officer: Simon M.C. Sherwood
Vice President, Finance and Chief Financial Officer: Paul White
Secretary: Edwin S. Hetherington
Key Investors Issues
- The net loss for the period was $3.7 million or 9 cents per share on revenue of $99.4 million, vs. a net loss of $7.4 million or 19 cents per share on revenue of $81.5 million a year ago.
- The adjusted net loss for the period was $3.5 million or 8 cents per share vs. an adjusted net loss of $8 million or 20 cents per share in the first quarter of 2006.
- Total revenue was up $17.9 million over the prior year quarter and all regions contributed to this 22% revenue growth.
First Quarter Financial Highlights
- Net loss in the first quarter was $3.7 million, or 9 cents per share compared with net loss of $7.4 million or 19 cents per share a year ago.
- The adjusted net loss for the period was $3.5 or 8 cents per share compared with an adjusted net loss of $8 million or 20 cents a year ago.
Same-store RevPAR was up 7% from a year ago in local currency.
- Total revenue was up 22% helped by acquisitions and also the fact that the company didn’t have any serious closures in the first quarter of last year.
- EBITDA margins improved by 390 basis points for the quarter.
- EBITDA went up 68% from $8.5 million a year ago to $14.3 million in the most recent quarter.
Hotel bookings rose 5% worldwide and 16% in Europe.
- The management’s initial rate estimate suggests that the rate will be up over 5% on that business.
- Trains and cruises bookings are still up 27% from a year ago.
Europe accounts for about half of the company’s owned hotels EBITDA.
- Last year 48% of the company’s hotel’s EBITDA came out of Europe.
- EBITDA in the region was up about $4 million from a year ago.
Bookings are up 16% in terms of number and the company expects significant rate growth in Europe, driven by that booking strength.
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Italy is up 17% in terms of bookings.
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Portugal is up 29% from a year ago.
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The rest of Europe is up 11% from a year ago.
EBITDA in the Rest of the World region was up 17%.
The Asian properties are performing well and the company is just finalizing plans from the expansion of La Baule Beach Hotel on a profit land it obtained adjacent to the hotel, so Orient Express expects to get some more growth elevation properties.
In Brazil the bids were finally opened on the Hotel Cataratas and the company had the highest bid about 10% to 15% ahead of the other bidders.
Hotel Cataratas is expected to be a very significant earn for Orient Express. The management believes the company has to invest $20 to $25 million into the property or expects to be taking EBITDA out of the property from about $3 million in the first quarter right into about $5 million very quickly.
The company’s project in Buzios is also moving along well.
It’s a 45 acre size from this one for that market sort of village beach resort that is within a good range of Rio de Janeiro. The company is planning to build a 40-suite hotel lot and 17 major villas. The full investment will be about $35 million, but after the company sold villas it expects to have a net investment of $10 to $20 million in these villas and to make an EBITDA of $4 to $5 million.
