Sol MeliÌÁ Achieves Revenues Of 477.7 Million Euros For The First Half Of 2002

Sol Meliá has published today, 6th August 2002, results for the hotel chain for the first half of 2002 which reflected stagnation of the rest of the travel industry after the consequences of 11th. September, the subsequent slowdown in the world economy, especially in Germany, and the crisis in Latin America. During the first half of the year, revenues reached 477.7 million Euros, 3.3% less than in 2001, while average RevPar (revenues per available room) across the company fell by 7.3% compared to the first half of 2001.

The company`s European Resort Division has been hit by the fall in business of hotels in Tunisia, the Balearic Islands and Canary Islands, counterbalanced by the stronger performance of hotels in mainland Spain which has kept up business from northern and central European countries while also performing well in the domestic market due, amongst other things, to the leadership and brand awareness the company enjoys in Spain as well as the quality of its hotels after the almost 500 million Euros invested in renovation and refurbishment over recent years.

In the European City Division the economic slowdown in the major European countries, particularly Germany, as well as the fall in the number of American visitors to European capitals -London, Paris, Rome, Madrid- and the reduced activity in the meetings and congress market have led to results below initial expectations. Finally, the Americas Division, the area of the company that most suffered the effects of 11th. September, has been further affected by the lethargy of the American economy and the continued reluctance of Americans to travel abroad, a fact that has hit Mexico in particular. The change in the makeup of customer nationalities that the company has been able to effect in the Dominican Republic has led to a quicker recovery in their performance, while on the other hand the difficulties faced by Argentina, Brazil, Venezuela and Uruguay continues to affect the 25 Sol Meliá hotels in the four countries.

Earnings before interest, taxes, depreciation, amortization and rentals (EBITDAR) reached 135.7 million Euros, a 15% decrease over the previous year, while Earnings before interest, taxes, depreciation and amortization (EBITDA) was 105 million Euros, a decrease of 23%. Due to the devaluation of Latin American currencies in countries where the company operates hotels and the absence of extraordinary profits as compared to 2001, net profit of the Group was 8.1 million Euros, a 85% decrease over 2001, although operating cash flow stood at 71.3 million Euros, 23% less than in 2001. During the first half of the year Sol Meliá also reduced debt by 128 million Euros, with consequent savings in financial costs.

Sol Meliá adds 14 new hotels during the first half of 2002: During the first half of 2002, Sol Meliá has added 14 new hotels to its portfolio and now operates 356 hotels with 87.651 rooms in 30 countries on 4 continents. The new hotels reinforce the company`s position as the leading hotel company in Spain, especially in its city hotel market. At 30th. June the company had also already signed agreements to add 47 further hotels over the next two years.