1998 Net Profits For The New Sol Meliá Reach US$ 94 Million

After the take-over of Meliá Inversiones Americanas (MIA) and the merger with Inmotel, the new Sol Meliá achieved net profits of US$ 94 million in 1998, an increase of 37.2% over the previous year.

The new Sol Meliá is expected to be fully integrated by the second quarter of the year, after completing the acquisition and merger process. Meliá Inversiones Americanas and Inmotel are hotel real estate companies with properties throughout Latin America, the Caribbean and Europe.

The new Sol Meliá structure aims to enhance the company’s capacity for growth, particularly in major European cities and throughout the American continent, either through management and franchise agreements with independent hotels or through the acquisition of hotel properties.

The company is also studying growth opportunities in the travel industry in general.

During 1998, the three companies that now form part of the new Sol Meliá invested a total of US$ 300 million in diverse operations in the world-wide tourism industry.


Take-overof MIA and merger with Inmotel:
At the end of 1998, the Spanish hotel management company Sol Meliá presented its plan to take-over MIA and its hotel real estate interests in Latin America and the Caribbean, and to later merge with Inmotel, a company owning hotel properties in Europe; a plan designed to make the new Sol Meliá one of the leading hotel companies in the world.

The take-over bid for MIA ended on the 22nd. February with over 96% of the outstanding shares in the company being successfully acquired.

Results for individual companies:
In 1998, the hotel management company Sol Meliá achieved record net profits of US$ 49 million, a 20.8% increase over the previous year.

The companies management fee and other revenues reached $US 110 million, a 17.8% increase over 1997, while the combined revenues of the 246 hotels operated by the company reached a total of over US$ 1 billion.

The spectacular increase in results was primarily due to the incorporation of 46 new hotels throughout the year and strong demand for company products, both in resort and city destinations, along with improvements in operations and sales.

Meliá Inversiones Americanas ended a good year with net profits of almost US$ 21 million, an increase of 35.4% over the previous year.

Inmotel achieved even greater growth in net profits, with profits of US$ 28 million supposing a 92% increase over 1997 results.

At year end, the Sol Meliá hotel portfolio comprised 246 city and resort hotels with a total of 65,586 rooms in 24 countries. The company is the leading hotel company in Spain in both the city and resort hotel markets, the second largest company in Europe and amongst the top ten hotel companies in the world by market capitalisation. With a financial leverage ratio of only around 10%, significantly below the average of around 85% for the world hotel industry, the new Sol Meliá has been created with significant financial strength to achieve its expansion ambitions for the twenty-first century.