Scandic Reports Strong Quarter with High Activity and Positive Outlook for Q2 2023
Second quarter in summary, April 1 – June 30, 2023.
• Net sales rose by 7.9 percent to 5,693 million SEK (5,276).
• Average occupancy rate was 63.0 percent (63.2).
• Average revenue per available room (RevPAR) went up to 828 SEK (749).
• Operating profit totaled 833 million SEK (1,016).
• Adjusted EBITDA1) was 772 million SEK (1,083).
• Excluding IFRS 16, earnings per share equaled 1.55 SEK (2.44).
• Free cash flow was 664 million SEK (1,300).
• Interest-bearing net debt/adjusted EBITDA amounted to 1.1x (0.5x excluding the convertible loan).
1) Earnings before pre-opening costs, items affecting comparability, interest, taxes, depreciation and amortization, adjusted for the effects of IFRS 16.
Events after the reporting date
• On July 3, Scandic announced an agreement to open a new Scandic Go hotel on Fridhemsplan in central Stockholm. The hotel will have 221 rooms and space-efficient facilities. It is expected to open in the late summer 2024 following a renovation and technical upgrade of the building.
CEO’S COMMENTS
“Backed by our strong financial position, during the first half of 2023, we gradually ramped up activity in the company with a commercial and data-driven focus and continued developing Scandic Go.”
Strong quarter with high activity and positive outlook
Scandic delivered a strong second quarter with positive price development and RevPAR that reached a record 828 SEK compared with 749 SEK last year. Occupancy was in line with 2022 at 63 percent. With just over 3 percent more available rooms, this means that guests are booking more rooms than before. Net sales also rose by 8 percent to 5,693 million SEK compared with the previous year.
Backed by our strong financial position, during the first half of 2023, we gradually ramped up activity in the company with a commercial and data-driven focus and continued developing Scandic Go. These investments are part of building an even better and stronger Scandic by strengthening our offering and improving efficiency to enable faster growth. We expect to increase the pace of renovations at our hotels toward year-end, giving us an even more competitive hotel portfolio.
Scandic’s adjusted operating profit amounted to 772 million SEK (1,083), with the difference mainly attributable to non-recurring items during 2022 and investments during the year. Excluding non-recurring items, the adjusted operating margin was 13.3 percent, a substantial improvement compared with 2019. After pandemic restrictions were gradually eased in 2022, we have been recruiting and training new team members to meet the increasing demand. With a continued focus on our operating margin and with trained team members and additional investments to increase efficiency, we see conditions for continued positive development.
We are working to establish Scandic Go, attracting the interest of partners and property owners as we maintain a high tempo in our markets to assume a leading role and develop the fast-growing economy segment. At the beginning of July, we announced that Scandic had signed an agreement with our landlord Pandox to open another Scandic Go with 221 rooms in central Stockholm.
There was strong development in the hotel market during the quarter, with high demand and positive price trends driven by a great interest in leisure travel and demand for meetings and conferences. Domestic and intra-Nordic travel is at a high level, and intercontinental travel continues to recover. During the spring and early summer, entertainment offerings such as concerts, sports events and other activities contributed positively to demand and price development. I am proud of our commercial efforts to meet demand during the quarter as well as the way we operated our hotels with high efficiency and good guest satisfaction.
We foresee a strong third quarter driven by continued high levels of leisure travel during the summer. We also expect business travel to pick up toward the end of the quarter. Based on current bookings, we anticipate occupancy rates aligned with the corresponding period last year at higher average room rates.
With the strong momentum I see across the company, we’re looking forward to an eventful summer. I’d like to extend my thanks to all of our team members for their fantastic commitment and, of course, our guests for their confidence in Scandic.
Jens Mathiesen
President & CEO
This information is information that Scandic Hotels Group AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 07.30 CEST on July 14, 2023.