Sol Meliá has announced results for the first nine months of the year that show a net profit excluding extraordinary profits of 83.9 million Euros, an increase of 12% over the previous year, and a net profit of 94.7 million Euros, a decrease of 10%, the decrease being due to the generation of 29.6 million Euros in extraordinary profits in the year 2000 after the sale of real estate including the Meliá Bávaro Hotel.
Company Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) reached 231 million Euros, a 10% increase over the year 2000, while Earnings Before Interest, Taxes, Depreciation, Amortization and Rentals (EBITDAR) rose to 260.6 million Euros, 16% higher than the previous year. Finally, revenues grew to 795.3 million Euros for the nine-month period, an 18% increase over last year.
Sol Meliá RevPar (revenues per available room) grew by 6% over the period, while average occupancy reached 73%. Over the first nine months of the year the company added 21 new hotels to its portfolio, and has already signed agreements to for an additional 68 hotels to be opened over the next two years.
The detailed results show how resort hotels in Spain were negatively affected by the strikes over the summer by Iberia Airlines pilots and ground transport operators in the Balearic Islands, as well as by the negative impact of the proposed environmental tax in the same destination. The European City Division also suffered a minor slowdown, primarily due to the numerous cancellations of conventions and business meetings and the almost total lack of US clients after the events of 11th. September.
In this respect, while some destinations such as Latin America, European capital cities and Tunisia, have already seen their third quarter results suffer due to the crisis generated by the mentioned events, the company foresees an even greater impact over the last quarter of the year.
Looking to the future:
Nevertheless, Sol Meliá is confident that the enormous diversity of its hotel portfolio in both the business and leisure sectors, the excellent condition of its hotels, 75% of which have been added to the company over the last five years or have been completely renovated and refurbished, the ongoing brand restructuring and repositioning and high brand awareness, the substantial absence of future hotel development projects requiring investment by Sol Meliá (almost all of the new hotels will be taken over under lease or management agreements) and, above all, the company’s financial strength and diversification and its low levels of leverage (Sol Meliá has the second best credit rating in the world hotel industry with a BBB (Stable) rating from Standard & Poor«s and BBB+ from FITCH), will allow the company to face the current crisis in much better conditions than the majority of its peers or competitors.
Sol Meliá is the leading hotel company in Spain, Latin America and the Caribbean, the third largest chain in Europe and the tenth largest in the world.