Sol Melia sees profits rise

Spanish hotel company Sol Meliá celebrated its fiftieth anniversary in 2006 with a 7.9% increase in revenues, a 13.2% increase in EBITDA, and an increase in net profits of 51.2%.The results have been influenced by the positive performance of the company’s three hotel divisions and Sol Meliá Vacation Club (SMVC), together with improvements in financial ratios.

The results of the 4th quarter also reflect this positive trend. EBITDA grew by 13.9%, reaching 60.7 million euros while net profits increased by 113.6% (16.1 million euros).

In addition, and as confirmation of the positive performance of the company, the outlook for the future, the reduction in debt of 333 million euros that Sol Meliá has achieved between 2004 and 2006, along with improvements to its credit rating, the Moody’s credit rating agency has classified the hotel chain as investment grade Baa3 with stable outlook.

The recovery in the performance of Spanish city hotels in 2006 and the positive trends seen in company resort hotels, particularly in Spain and the Dominican Republic, boosted results in the three hotel divisions, with overall RevPAR increasing by 7.5%. Sol Meliá Vacation Club has also increased the number of weeks it has sold by 70%, generating an increase in revenues of 51%. Sol Meliá has also improved its financial results over the year by 20%.