Profits up at NH Hoteles

Net profits at NH Hoteles improved significantly in the first nine months of the year, increasing 72% compared with the same period last year, to €49.8m.Group sales rose 43.8% to €1,098.4m and EBITDA (operating profits) reached €197.7m, 65.5% higher than in the first nine months of 2006, confirming the strong growth in the business compared with the previous year.

The increase in RevPar (revenues per available room) and the incorporations in Italy (Jolly Hotels and Framon) were an important driver in the group’s hotel business, where earnings growth reached 39.5% (€1,038m) and there was a 66% improvement in EBITDA to €185.4m.
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The performance of the Benelux business unit was of particular note, with an acceleration in sales compared with the first six months of the year to €211.5m (excluding the new incorporations), 5% more than in the same period last year. EBITDA was in line with the current trend and increased 10% in these countries. In terms of RevPar, Benelux increased 5.4%, mainly thanks to a 6.9% increase in prices. Particularly important was the strong performance of Brussels, where there was a substantial increase in average prices, RevPar and occupancy levels.

In Germany, and excluding any of the new openings, sales reached €158m, an improvement on the same period last year. The business unit was able to maintain average prices (which grew 1%), bearing in mind that there was a considerable increase in prices in 2006 at the time of the World Cup.

Austria, Switzerland, Hungary and Rumania, excluding new incorporations, posted positive growth in the first nine months, with sales growth of 7% to €40.2m. EBITDA at this business unit reflected favourable growth and reached €2.1m, up from €0.6m last year. RevPar made particularly strong gains (7.8%), thanks to an 8.7% increase in average prices. September was a particularly good month in Vienna, thanks to being the venue for the European Congress of Cardiology.

Spain, excluding earnings from new hotel openings, posted RevPar growth of 6%, with price rises principally in the more important cities, particularly in Barcelona where a solid trend has now consolidated. The Spain business unit, excluding new openings, increased earnings by 7% to €305.2m, together with EBITDA growth of 25%.

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In Italy, excluding the incorporation of Jolly Hotels and Framon, hotel earnings soared 81%. The new incorporations in Italy are in the initial stages and posted significant growth in RevPar (+16%) and ADR (average prices) was 35.8% higher than in the same period last year. As regards the integration of the Italian chains Jolly Hotels and Framon, NH Hoteles has led the business unit since the beginning of the year and has already and in record time installed the NH Hoteles IT systems.

As a reflection of unfavourable exchange-rate movements, the America business unit reported flat sales growth of 2% to €49m and EBITDA growth of 11% from the hotel business, excluding new openings. At constant exchange rates, RevPar in Argentina and Mexico increased 25% and 2% respectively. In the rest of the Mercosur countries, RevPar rose 14.4%.

The real state activity reported sales of €60.3m, 206.6% more than in the same period last year. Earnings growth in 2007 was explained by the impact of the sale of a plot in Puerto Morelos, Mexico.

EBITDA at the real state division reached €12.2m, an increase of 58.2% over the €7.7m reported in 2006. At 30 September 2007, firm sales not reflected in the accounts amounted to €76.7m, with an estimated margin of €26.8m. The majority of these sales were from the residential development of Ribera de Marlin and moorings in the Marina, both within the development in the province of Cadiz. 
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