Meliá earns 22.1 million (+18.9%) in the first quarter in spite of the depreciation of the dollar
Business performance (on a constant currency basis):
- Total revenues increased by 4.2%
- Global RevPAR grew by 7.4%, 70% of which is due to price increases
- Growth continued in the Mediterranean and Spanish cities
- Group EBITDA grew by 13.8%
- Excellent recovery in European cities with the exception of Berlin, due to the lack of flights after the end of operations of Air Berlin
- 8.9% growth of melia.com, with an outstanding 46% growth in the Mediterranean
- Healthy evolution of MeliaPro, the booking platform for travel agencies and other professional customers, with an outstanding 30.5% increase on Groups’ bookings through MeliaProMeetings
- Earnings per share increased by 18.9%
- Net debt/EBITDA target ratio for the year remains at 2X
- Reduction in financial expenses of €1.6M (-20%)
- Reduction of average interest rate to 3.19% compared to 3.4% in 1Q-2017
- The company has opened 8 new hotels this year (4 in Cuba, 2 in Spain and 2 in Vietnam)
- To date, Meliá has signed 7 new hotels in 2018: 3 in Vietnam and 1 each in Thailand, Portugal, Dubai and Morocco
- The pipeline for future hotel additions stood at 63 hotels with 16,000 rooms as of March 31, 85% of them under management agreements
- Forecasts for the second quarter continue to suffer the effect of the dollar-euro exchange rate
- Excluding exchange rate differences, the forecasts become positive, estimating single-digit RevPAR growth led by hotels in France, Spain and Italy
- The company maintains its forecast of significant improvement in margins in 2018
- Excellent performance and outlook for the Calviá Beach project (Magaluf), with a new hotel and shopping mall opening in its 7th season, and very positive performance from the Palau de Congressos Convention Centre and Hotel Palma Bay in Mallorca after their first year of operations
Gabriel Escarrer Jaume, Executive Vice President and CEO of Meliá Hotels International: “The Meliá global hotel business has had a positive first quarter accompanied by a clear recovery in European cities. This international economic environment combined with our strategy to strengthen our brands internationally, reposition products and firmly commit to digital transformation, boosts our international expansion and allows us to keep consolidating our leadership in the leisure and bleisure (business+ leisure) segments, one of the priorities in our Strategic Plan”.
Meliá Hotels International earned 22.1 million euros in the first quarter of 2018, an increase of 18.9% over the same period in 2017. The positive performance of the hotel business was negatively affected by the significant depreciation of the dollar, down 15% compared to the first quarter 2017, since a large part of the company’s revenues are generated in dollars although its accounts are stated in euros.
The depreciation of the dollar caused revenues (€401.1Mn) to fall by 2% in euro terms, even though they increased by 4.2% when exchange rate differences are excluded. EBITDA fell by 1.1% but would have increased by 13.8% excluding exchange rate differences, accompanied by a 148 base-point improvement in profit margins. Something similar is seen in global RevPAR (Revenue per Available Room) where an improvement of 1.6% would have risen to 7.4% without the exchange rate difference.
Meliá continues to enjoy success in its digital transformation strategy, with very significant increases in its direct B2C sales through melia.com (+8.9% in the first quarter excluding exchange rate differences), while B2B sales through MeliaPro increased by 6.9% in the first quarter, highlighting growth in EMEA (+21.4%) and APAC (+18.5). Of note is also the growth of Group business through the new MeliaPro Meetings website that has increased by 30.48%. Digital campaigns and the optimization and growing penetration of the website led to very significant increases in direct online sales, especially in the Mediterranean, with a 46% increase, EMEA with 22%, Asia with 20 %, and Spanish city hotels with a 15.5% increase.
In terms of financial results there was a slight increase in debt, which rose from €593.7 million in December 2017 to € 639.8 million in 2017 with the Net Debt to EBITDA ratio remaining at a multiple of 2. Thanks to the decrease in gross debt and average interest rates (3.19% versus 3.4% in 1Q- 2017), the company was able to reduce financial expenses by 20% (€1.6Mn).
The share price over the first quarter remained stable (slight decrease of 0.1%), outperforming the Ibex 35 which fell by 4.4% compared to the same period in 2017. To date the share price has grown by 7.7%, while the Ibex 35 has increased by 0.9%. Earnings per share have grown by 18.9%.
In 2018, Meliá will conclude its current Strategic Plan and expects that the actions taken to achieve greater operational efficiency throughout the system, which have already begun to bear fruit, will continue to generate significant improvements in profit margins over the year. The measures already in place led to improvements that ranged between 210 base points at EBITDA level in the Americas, 130 bp. in Spanish cities and 170 bp. in the Mediterranean (including Canary Islands).