The Spanish hotel company Sol Meliá has announced results
above expectations at the end of the third quarter. Company consolidated net profits reached 17,459 million pesetas - 105 million euros - an increase of 51% over 1999. Total consolidated revenues rose to 112,012 million pesetas - 673 million euros -, 33% above the figure for the previous year, while earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to 35,115 million pesetas - 211 million euros -, 31% higher than in 1999.
These excellent results were achieved in large part thanks to the strength of the market in all of Sol Meliá‘s main destinations, as well as the recent acquisition of TRYP Hotels, bringing an additional 60 hotels to the group along with an extra 15 proyectos projects under development and scheduled for opening during 2001 and 2002.
Performance was particularly strong in the company’s European Resort Division, especially in Spain. The division is home to a large number of Sol Meliá properties and produced results even higher than those obtained in the extremely positive 1999 season. The excellent figures obtained in the third quarter compensated in large part the average performance of the hotels in the division over the first half of the year.
The performance of the hotels in the European City Division was also very positive in spite of the fact that the urban hotel market in Europe is generally more sluggish over the summer months.
The results achieved by Sol Meliá at the end of the third quarter also indicate a clear recovery of the company’s hotels in its Americas and Asia-Pacific Divisions.
BBB (stable) credit rating:
Standard & Poor’s has granted Sol Meliá a BBB (stable) credit rating, the second highest rating achieved in the international hotel industry, behind only the hotel management company Marriott International and unique amongst Spanish hotel companies. Sol Meliá shares its rating with prestigious competitors such as Accor or the Hilton Group and is rated above other major companies such as Starwood, Choice or Four Seasons.
The Standard and Poor’s rating came after their analysis of Sol Meliá financial ratios, recent investments and future prospects. The BBB (stable) rating increases Sol Meliá‘s capacity to obtain financing in capital markets and achieve its aim to diversify its sources of finance.
The company’s currently undervalued stock is confirmed by the opinions of the 33 financial analysts that cover Sol Meliá, 27 of whom recommend buy, 4 hold and only 2 sell. The majority of the same analysts have set the objective stock value at 15 euros.