- Net earnings attributable to Belmond
Ltd. of $12.6 million, compared with net earnings of $7.8 million
for prior-year quarter
- Adjusted net earnings from continuing
operations of $35.5 million, compared with adjusted net earnings of
$15.5 million for prior-year quarter
- Adjusted EBITDA of $75.1 million up
21%, compared to adjusted EBITDA of $62.2 million for prior-year
quarter
- Same store revenue per available room
(“RevPAR”) up 6% from prior-year quarter in both constant currency
and US dollars
- Reaffirms Full-Year adjusted EBITDA
guidance at $140 million to $150 million
Belmond Ltd. (NYSE:BEL) (the “Company”), owners, part-owners or
managers of 46 luxury hotel, restaurant, train and river cruise
properties, which operate in 24 countries, today announced its
results for the third quarter ended September 30, 2018.
Roeland Vos, president and chief executive officer, remarked:
"Belmond delivered significant growth in the third quarter of 2018.
In what is seasonally the largest quarter in terms of EBITDA
contribution, we are pleased to have recorded a 21% rise in
adjusted EBITDA versus the prior-year period.
With improved commercial management capabilities in place, and a
program of identified strategic capital reinvestments that began in
2016 now yielding benefits, we came in at the top end of the RevPAR
guidance range we set out in May, supporting our full-year guidance
for same store RevPAR growth of between 2% and 6%. We are also
reaffirming our full-year adjusted EBITDA guidance of $140 to $150
million, representing growth of 13% to 21% over last year.
As momentum continues to build, we are increasingly confident in
the tools that are powering our revenue-driving
strategies. The team remains focused
on capitalizing on the strong financial position we have
established. We expect the positive growth trajectory we have
witnessed across successive quarters this year to continue through
2019 and beyond."
Third Quarter 2018 Operating Results
Revenue for the third quarter of 2018 was $193.2 million, a
$10.2 million increase in revenue from the third quarter of 2017.
In constant currency, revenue for the third quarter of 2018
increased by $10.6 million from the third quarter of 2017 due to
strong performances at Venice Simplon-Orient-Express, which
continues to benefit from recent capital improvements; Belmond
Grand Hotel Europe, St. Petersburg, Russia, where the football
World Cup was hosted in July; Belmond Charleston Place, South
Carolina, which is benefiting from the popularity of the
destination and the extensive refurbishment work completed in
recent years; Belmond Hotel das Cataratas, Iguassu Falls, Brazil
where the destination has received positive media coverage; and
across Belmond's Italian portfolio due to enhanced revenue
management initiatives and the impact of recent capital
investments, including the addition of new keys. Additionally, the
introduction this year of Belmond Castello di Casole in Tuscany
represented a positive contribution. These increases are offset by
declines at Belmond La Samanna, St. Martin, French West Indies, and
Belmond Cap Juluca, Anguilla, British West Indies, which were both
closed for renovation works in the third quarter of 2018 and
Belmond Northern Belle, which was sold in the fourth quarter of
2017. Together these three businesses contributed revenue of $6.2
million in the third quarter of 2017. Excluding the impact of the
closed and sold properties and the acquisition of Belmond Castello
di Casole, revenue across the rest of the portfolio increased by
$12.8 million or 7% over the third quarter of 2017 on a constant
currency basis.
Net earnings attributable to Belmond Ltd. for the third quarter
of 2018 were $12.6 million ($0.12 per common share), which compared
to net earnings attributable to Belmond Ltd. of $7.8 million ($0.08
per common share) for the third quarter of 2017, largely due to a
21% improvement in adjusted EBITDA.
Adjusted net earnings from continuing operations for the third
quarter of 2018 were $35.5 million ($0.34 per common share),
compared to adjusted net earnings from continuing operations of
$15.5 million ($0.15 per common share) for the third quarter of
2017.
Same store RevPAR for owned hotels for the third quarter of 2018
increased 6% from the prior-year quarter on both a constant
currency and US dollar basis as a result of a one percentage point
increase in occupancy and a 5% increase in average daily rate
("ADR").
Adjusted EBITDA for the third quarter of 2018 was $75.1 million
up 21%, compared to an adjusted EBITDA of $62.2 million for the
third quarter of 2017. In constant currency, adjusted EBITDA for
the third quarter of 2018 was up $10.0 million or 15% compared to
the third quarter of 2017.
Recent Company Highlights
- Announces review of strategic
alternatives to enhance shareholder value - On August 8, 2018,
the Company announced that its Board of Directors has initiated a
comprehensive review of strategic alternatives to enhance
shareholder value. The Board has engaged Goldman Sachs & Co.
LLC and J.P. Morgan Securities LLC as financial advisors and Weil,
Gotshal & Manges LLP as legal advisor to assist in its review.
Belmond is pleased with the progress of the review process that is
now underway but no assurances can be given regarding its outcome
or timing.
- Celebrates milestone anniversaries
at iconic properties - In July 2018, Belmond El Encanto in
Santa Barbara, California, marked a century since it began
operating as a hotel. Today, the property is the only Forbes 5-star
hotel in the city and is hosting a series of special wine-maker
dinners throughout 2018 to honor its 100-year history. On August
13, 2018, Belmond Copacabana Palace celebrated 95 years since it
opened its doors. 2018 also marks the 60th year since our other
Brazilian hotel, Belmond Hotel das Cataratas, with its
breath-taking setting as the sole hotel on the Brazilian side of
the national park overlooking the world famous Iguassu Falls,
opened as a hotel, following the Belmond Hotel Cipriani, Venice,
Italy, which reached this 60-year milestone anniversary in
May.
- Unveils latest global brand campaign
to capitalise on growth in ‘culinary tourism’ - In September
2018, Belmond launched ‘The Art of Gastronomy’ celebrating culinary
tradition and food of provenance across its portfolio of
destinations in a series of six short films, each capturing a
gastronomic journey that guests can experience as part of the
Company’s commitment to delivering authentic escapes, and as demand
for authentic food-inspired travel increases. The campaign content
went live across Belmond’s marketing channels worldwide
with each experience available to book online via
Belmond.com.
Third Quarter 2018 Business Unit Results
Owned hotels:
Europe:
For the third quarter of 2018, revenue from owned hotels for the
region was $109.4 million, an increase of $12.7 million or 13% from
$96.7 million for the third quarter of 2017. In constant currency,
revenue for the region for the third quarter of 2018 increased
$10.0 million or 10% from the prior year quarter due to growth
across the majority of the portfolio led by double digit percentage
growth at Belmond Grand Hotel Europe, Belmond Hotel Caruso and
Belmond Grand Hotel Timeo. Belmond Grand Hotel Europe benefited
from the positive image of the football World Cup held in Russia in
July and all of the properties have benefited from enhanced revenue
management strategies including improved management of room types,
targeted sales activities and focus on driving group business to
shoulder seasons. The growth included revenue of $4.0 million at
Belmond Castello di Casole, which was acquired in the first quarter
of 2018, and was opened under a Belmond flag in May.
In constant currency, same store RevPAR for owned hotels in the
region increased 7% from the prior-year quarter as a result of a 7%
increase in ADR.
Adjusted EBITDA for the region for the quarter was $54.8
million, up 13% compared to $48.7 million for the third quarter of
2017. In constant currency, adjusted EBITDA for the region for the
third quarter of 2018 increased $3.8 million or 7% from the prior
year quarter driven by Belmond Grand Hotel Europe and all of the
Italian properties with the exception of Belmond Hotel Cipriani,
which is in a non-Biennale year.
North America:
Revenue from owned hotels for the third quarter of 2018 was
$27.6 million, down $5.3 million or 16% from $32.9 million for the
third quarter of 2017. In constant currency, revenue for the region
for the third quarter of 2018 also decreased $5.4 million from the
prior-year quarter. The decrease is attributable to a $4.2 million
fall in revenue at Belmond La Samanna and Belmond Cap Juluca, which
were both closed for the entire quarter following damage sustained
from the 2017 hurricanes that hit the region. Revenue from Belmond
Charleston Place was flat year-over-year but would have been higher
had it not been for the impact of $2.1 million lost revenue at
Belmond Charleston Place as the city was evacuated with the
approach of Hurricane Florence in September.
In constant currency, same store RevPAR for owned hotels in the
region decreased 2% from the prior-year quarter due to a two
percentage point decrease in occupancy.
Adjusted EBITDA for the region for the quarter was $5.1 million,
an increase of $2.8 million or 122% from $2.3 million for the third
quarter of 2017. In constant currency, adjusted EBITDA for the
region for the third quarter of 2018 also increased $2.9 million
due to improvements of $1.1 million at Belmond Charleston Place and
losses of $2.7 million in the prior-year quarter at Belmond La
Samanna and Belmond Cap Juluca. Operating losses of $2.7 million at
Belmond La Samanna and $1.7 million at Belmond Cap Juluca have been
added back to adjusted EBITDA for the third quarter of 2018 while
the properties are closed for renovation. Also added back to
adjusted EBITDA in the third quarter of 2018 is a $1.2 million
deductible related to the insurance cover at Belmond Charleston
Place.
Rest of world:
Revenue from owned hotels for the third quarter of 2018 was
$25.8 million, a decrease of $1.0 million or 4% from $26.8 million
for the third quarter of 2017. In constant currency, revenue for
the third quarter of 2018 increased $2.6 million or 10% from the
prior year quarter, principally as a result of a $1.7 million
increase in revenue at Belmond Hotel das Cataratas following
positive media coverage of the destination, and $0.7 million
increases at both Belmond Copacabana Palace and Belmond Mount
Nelson.
In constant currency, same store RevPAR for owned hotels in the
region increased 10% from the prior-year quarter as a result of a
four percentage point increase in occupancy and a 1% increase in
ADR.
Adjusted EBITDA for the region for the quarter was $3.9 million
compared to $3.5 million for the prior-year quarter. In constant
currency, adjusted EBITDA for the region increased by $0.7 million
or 20% from the prior-year quarter as a result of a $0.8 million
increase at Belmond Hotel das Cataratas.
Owned trains & cruises:
Revenue for the third quarter of 2018 was $26.4 million, up $2.7
million or 11% from $23.7 million for the third quarter of 2017. In
constant currency, revenue increased $2.1 million or 8%. Excluding
Belmond Northern Belle that was sold last year, revenue was up $4.2
million or 18% over the third quarter of 2017. The increase was
driven by Venice Simplon-Orient-Express which has continued a
strong year as it benefits from recent capital improvements, and to
a lesser extent from Belmond Afloat in France where two new barges
were brought into operation earlier this year.
Adjusted EBITDA for the quarter was $8.3 million, an increase of
$2.9 million or 54% from the third quarter of 2017. In constant
currency, adjusted EBITDA for the segment increased by $2.7 million
or 46% primarily driven by growth from the Venice
Simplon-Orient-Express, Belmond Afloat in France and the cessation
of the Company's loss making Orcaella cruise lease in Myanmar
during the prior year.
Management fees:
Adjusted EBITDA from management fees for the third quarter of
2018 was $4.6 million, a decrease of $0.1 million or 2% from $4.7
million for the third quarter of 2017.
Share of pre-tax earnings from
unconsolidated companies:
Adjusted share of pre-tax earnings from unconsolidated companies
for the third quarter of 2018 was $6.6 million, an increase of $0.6
million compared to $6.0 million for the third quarter of 2017 due
to an increase in passenger numbers at the Company's PeruRail joint
venture.
Central overheads:
For the third quarter of 2018, adjusted central overheads of
$6.9 million were $0.1 million lower than adjusted central
overheads of $7.0 million in the prior-year quarter.
Investments
During the third quarter of 2018, the Company invested a total
of $43.0 million in its portfolio, including $29.2 million on the
refurbishment of Belmond Cap Juluca; $2.9 million on the
refurbishment of Belmond La Samanna; $1.2 million on the full
refurbishment of Belmond Savute Elephant Lodge, Chobe Reserve,
Botswana; $1.2 million at Belmond Afloat in France for the addition
of two new barges; and $0.7 million for the refurbishment of '21'
Club following water damage from burst pipes earlier in the
year.
Balance Sheet
At September 30, 2018, the Company had total debt of $746.5
million and cash balances of $150.3 million, resulting in net debt
of $596.2 million and a ratio of net debt to trailing-twelve-month
adjusted EBITDA of 4.2 times. This compared to net debt of $615.2
million and a ratio of net debt to trailing-twelve-month adjusted
EBITDA of 4.8 times at June 30, 2018.
Outlook
The Company is providing the following guidance for the fourth
quarter and full year 2018:
Fourth Quarter 2018
Full Year
2018
Same store worldwide owned hotel RevPAR growth guidance
(1) On a constant currency basis 3% - 7% 2% - 6% In U.S.
dollars (4)% - 0% 2% - 6%
Statement of operations
guidance ($ millions) (Losses)/earnings from continuing
operations (2) ($37.0) - $0.0 Adjusted EBITDA (3) $140.0 - $150.0
Depreciation and amortization (4) $15.2 - $16.2 $60.8 -
$61.8 Interest expense $8.1 - $9.1 $32.3 - $33.3 Tax expense (5)
$2.1 - $3.1 $12.6 - $14.6
Cash flow guidance ($
millions) Cash interest expense $8.0 - $9.0 $32.2 - $33.2
Cash tax expense (6) $7.4 - $8.4 $16.5 - $17.5 Scheduled loan
repayments $1.3 - $1.7 $5.7 - $6.7
The Company’s guidance as provided above is based on its current
expectations, beliefs and assumptions regarding future
developments, and is subject to a number of uncertainties and risks
outside the Company’s control that could cause the Company’s
guidance to change. Accordingly, there can be no assurance that the
Company will achieve these results
(1) Projected same store RevPAR growth for the fourth quarter and
full year ending December 31, 2018 excludes the operations of
Belmond Castello di Casole, which was acquired in February 2018,
Belmond Cap Juluca, which was acquired in May 2017, Belmond La
Samanna, which is closed for refurbishment following Hurricanes
Jose and Irma in September 2017 and Belmond Savute Elephant Lodge,
Chobe Reserve, Botswana which was closed for refurbishment from
November 2017 to June 2018. (2) (Losses)/earnings from continuing
operations includes the unadjusted impact of one-off items
including the cost to terminate a right of first refusal and
purchase option and costs associated with the strategic review. (3)
The Company's policy is to provide adjusted EBITDA guidance solely
on a full year basis. (4) Projected depreciation and amortization
expense for the fourth quarter and full year ending December 31,
2018 includes forecast accelerated depreciation related to expected
renovations at the Company's properties. (5) Tax expense guidance
includes the Company's share of provision for income taxes of
unconsolidated companies. (6) Cash tax expense guidance does not
include the Company's share of provision for income taxes of
unconsolidated companies.
BELMOND LTD.
EARNINGS RELEASE SCHEDULES
TABLE OF CONTENTS
Statements of Condensed Consolidated
Operations
8
Segment Information - Revenue and Adjusted EBITDA 9 Summary of
Operating Information for Owned Hotels 10 Condensed Consolidated
Balance Sheets 11 Reconciliations - Adjusted EBITDA and Outlook
Adjusted EBITDA 12 Reconciliations - Adjusted Net Earnings /
(Losses) and Adjusted Share of Pre-Tax Earnings from Unconsolidated
Companies 13 Net Debt to Adjusted EBITDA 14
BELMOND LTD.
STATEMENTS OF CONDENSED CONSOLIDATED
OPERATIONS
(Unaudited)
$
millions – except per share amounts
Three months ended
September 30,
Nine months ended
September 30,
2018 2017 2018 2017
Revenue 193.2 183.0 454.5 443.7 Expenses: Cost of
services 80.1 72.0 201.5 184.8 Selling, general and administrative
67.5 59.4 193.4 184.2 Depreciation and amortization 15.0 17.0 45.6
46.0 Impairment of goodwill — — 2.2 — Impairment of property, plant
and equipment and other assets — — 4.9 8.2
Total operating costs and expenses 162.6 148.4 447.6 423.2
Gain on disposal of property, plant and equipment 0.2 0.2
0.5 0.5 Other operating income 1.2 — 14.2 —
Earnings from operations 32.0 34.8 21.6 21.0
Interest income 0.2 0.2 0.8 0.6 Interest expense (8.4 ) (9.0 )
(24.9 ) (24.5 ) Foreign currency, net (0.7 ) (1.5 ) (4.3 ) (2.7 )
Earnings/(losses) before income taxes
and earnings from unconsolidated companies, net of tax 23.1 24.5
(6.8 ) (5.6 ) Provision for income taxes (14.5 ) (20.7 )
(5.9 ) (17.6 ) Earnings/(losses) before
earnings from unconsolidated companies, net of tax 8.6 3.8 (12.7 )
(23.2 ) Earnings from unconsolidated companies, net of tax
provision of $2.4, $2.0, $5.1 and $4.1 4.0 3.9 8.8 7.8
Earnings/(losses) from continuing operations
12.6 7.7 (3.9 ) (15.4 ) Net earnings from discontinued
operations, net of tax provision of $Nil, $Nil, $Nil and $Nil — — —
0.1 Net earnings/(losses) 12.6 7.7 (3.9
) (15.3 ) Net losses attributable to non-controlling
interests — 0.1 — —
Net
earnings/(losses) attributable to Belmond Ltd. 12.6 7.8
(3.9 ) (15.3 ) EPS attributable to Belmond Ltd. 0.12
0.08 (0.04 ) (0.15 ) Weighted average number of shares – millions
102.96 102.33 102.72
102.11
BELMOND LTD.
SEGMENT INFORMATION
(Unaudited)
$
millions
Three months ended
September 30,
Nine months ended
September 30,
2018 2017 2018 2017
Revenue Owned hotels - Europe 109.4 96.7 210.0
180.8 - North America 27.6 32.9 91.0 115.2 - Rest of world 25.8
26.8 85.5 88.6 Total owned hotels 162.8
156.4 386.5 384.6 Owned trains & cruises 26.4 23.7 57.9 50.6
Management fees 4.0 2.9 10.1 8.5
Revenue 193.2 183.0 454.5 443.7
Adjusted EBITDA Owned hotels - Europe 54.8
48.7 79.9 71.5 - North America 5.1 2.3 25.2 21.8 - Rest of world
3.9 3.5 14.3 15.9 Total owned hotels
63.8 54.5 119.4 109.2 Owned trains & cruises 8.3 5.4 11.5 5.3
Management fees 4.6 4.7 11.7 11.5 Share of pre-tax earnings from
unconsolidated companies 6.6 6.0 14.1 11.9
83.3 70.6 156.7 137.9 Central overheads (6.9 ) (7.0 )
(23.0 ) (21.7 ) Share-based compensation (1.6 ) (1.5 ) (4.9 ) (5.0
) Central marketing costs 0.3 0.1 (4.5 ) (3.2 )
Adjusted EBITDA 75.1
62.2 124.3
108.0
BELMOND LTD.
SUMMARY OF OPERATING INFORMATION FOR
OWNED HOTELS
Three months ended
September 30,
Nine months ended
September 30,
2018 2017 2018 2017
Room Nights Available Europe 90,895 86,817 224,516
214,135 North America 57,531 66,872 170,837 198,270 Rest of world
94,392 94,392 278,286 280,818 Worldwide
242,818 248,081 673,639 693,223
Room Nights Sold
Europe 70,334 66,974 148,749 143,262 North America 37,302 43,210
119,137 134,914 Rest of world 47,360 43,767 146,755
144,944 Worldwide 154,996 153,951 414,641 423,120
Occupancy Europe 77 % 77 % 66 % 67 % North America 65
% 65 % 70 % 68 % Rest of world 50 % 46 % 53 % 52 % Worldwide 64 %
62 % 62 % 61 %
ADR (in U.S. dollars) Europe 1018 928
887 791 North America 368 383 410 432 Rest of world 335 376 360 378
Worldwide 653 618 563 535
RevPAR (in U.S. dollars)
Europe 788 716 588 529 North America 239 248 286 294 Rest of world
168 174 190 195 Worldwide 417 383 347 327
Same Store
RevPAR (in U.S. dollars) (1) Europe 793 716 589 529 North
America 239 245 286 276 Rest of world 168 174 188 194 Worldwide 413
388 344 323
Same Store RevPAR (% change)
U.S.
dollar
Constant
currency
U.S.
dollar
Constant
currency
Europe 11 % 7 % 11 % 5 % North America (2 )% (2 )% 4 % 4 % Rest of
world (3 )% 10 % (3 )% 2 % Worldwide 6 % 6 % 7
% 4 % (1) Same store RevPAR data for the three and
nine months ending September 30, 2018 and September 30, 2017
excludes the operations of Belmond Castello di Casole, which was
acquired in February 2018, Belmond Cap Juluca, which was acquired
in May 2017, Belmond La Samanna, which is closed for refurbishment
following Hurricanes Jose and Irma in September 2017 and Belmond
Savute Elephant Lodge which was closed for refurbishment from
November 2017 to June 2018.
BELMOND LTD.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
$ millions
September 30, December 31, 2018
2017 Assets Cash 145.5 180.2 Restricted cash
3.9 3.1 Accounts receivable 53.5 34.4 Due from unconsolidated
companies 15.0 12.8 Prepaid expenses and other 14.5 13.3
Inventories 21.8 23.1 Total current assets 254.2
266.8 Property, plant & equipment, net of accumulated
depreciation 1,246.2 1,168.0 Investments in unconsolidated
companies 68.8 64.6 Goodwill 114.7 120.2 Other intangible assets
20.6 19.8 Other assets 17.2 14.1
Total assets
(1) 1,721.7 1,653.6 Liabilities and
Equity Accounts payable 26.0 15.8 Accrued liabilities 111.1
79.5 Deferred revenue 50.8 32.8 Current portion of long-term debt
and capital leases 6.4 6.4 Total current liabilities
194.3 134.5 Long-term debt and obligations under capital
leases 740.1 700.8 Liability for pension benefit 0.1 0.7 Other
liabilities 3.0 3.0 Deferred income taxes 108.9 115.4 Liability for
uncertain tax positions 0.6 0.5 Total liabilities
(2) 1,047.0 954.8 Shareholders’ equity 674.1 698.5
Non-controlling interests 0.6 0.3 Total equity 674.7 698.8
Total liabilities and equity 1,721.7
1,653.6 (1) Balance at September 30, 2018
includes $202.0 million (December 31, 2017 - $206.3 million) of
assets of consolidated variable interest entities ("VIEs") that can
only be used to settle obligations of the VIEs. (2) Balance at
September 30, 2018 includes $168.2 million (December 31, 2017 -
$123.0 million) of liabilities of consolidated VIEs whose creditors
have no recourse to Belmond Ltd.
BELMOND LTD.
RECONCILIATIONS - ADJUSTED EBITDA AND
OUTLOOK ADJUSTED EBITDA
(Unaudited)
$
millions
Three months ended
September 30,
Nine months ended
September 30,
2018 2017 2018 2017
Adjusted EBITDA reconciliation:
Earnings/(losses) from continuing operations 12.6 7.7 (3.9) (15.4)
Depreciation and amortization 15.0 17.0 45.6 46.0 Interest income
(0.2) (0.2) (0.8) (0.6) Interest expense 8.4 9.0 24.9 24.5 Foreign
currency, net 0.7 1.5 4.3 2.7 Provision for income taxes 14.5 20.7
5.9 17.6 Share of provision for income taxes of unconsolidated
companies 2.4 2.1 5.1 4.1 53.4 57.8 81.1 78.9 Insurance
gains and deductibles 1.2 — (10.0) — Labor restructuring cost — —
14.9 — Net operating losses at two closed Caribbean properties 4.4
2.0 11.4 2.0 Cost to terminate right of first refusal and purchase
option 13.1 — 13.1 — Strategic review costs 2.4 — 2.4 — Other
restructuring and special items (1) 0.5 2.3 3.7 5.3
Acquisition-related costs (2) 0.1 0.3 0.9 14.1 Gain on disposal of
property, plant and equipment (0.2) (0.2) (0.5) (0.5) Loss on
disposal of property, plant and equipment in unconsolidated joint
venture 0.2 — 0.2 — Impairment of goodwill, property, plant and
equipment and other assets — — 7.1 8.2
Adjusted EBITDA 75.1 62.2
124.3 108.0 (1) Represents costs in
relation to restructuring, severance and redundancy costs,
pre-opening costs, and other items, net. (2) Represents acquisition
fees in relation to the purchase of Castello di Casole in February
2018 and Cap Juluca in May 2017.
$ millions
Twelve months ending
December 31, 2018
Low case High case
Reconciliation of outlook adjusted EBITDA:
(Losses)/earnings from continuing operations (37.0) 0.0
Depreciation and amortization 61.8 60.8 Net interest expense 33.3
32.3 Foreign currency, net 4.3 4.3 Provision for income taxes 7.6
8.6 Share of provision for income taxes of unconsolidated companies
5.0 6.0 75.0 112.0 Insurance gains and deductibles (10.0) (10.0
Labor restructuring cost 16.0 15.0 Net operating losses at two
closed Caribbean properties 19.0 17.0 Cost to terminate right of
first refusal and purchase option 25.0 3.0 Strategic review costs
4.5 3.5 Other restructuring and special items 4.0 3.0 Gain on
disposal of property, plant and equipment (0.6) (0.6 Impairment of
goodwill, property, plant and equipment and other assets 7.1 7.1
Adjusted EBITDA
140.0 150.0
BELMOND LTD.
RECONCILIATIONS - ADJUSTED NET EARNINGS
/ (LOSSES) AND ADJUSTED SHARE OF PRE-TAX
EARNINGS FROM UNCONSOLIDATED
COMPANIES
(Unaudited)
$
millions – except per share amounts
Three months ended
September 30,
Nine months ended
September 30,
2018 2017 2018 2017
Adjusted net earnings reconciliation:
Earnings/(losses) from continuing operations 12.6 7.7 (3.9) (15.4)
Insurance gains and deductibles 1.2 — (10.0) — Labor restructuring
cost — — 14.9 — Net operating losses at two closed Caribbean
properties 4.4 2.0 11.4 2.0 Cost to terminate right of first
refusal and purchase option 13.1 — 13.1 — Strategic review costs
2.4 — 2.4 — Other restructuring and special items (1) 0.5 2.3 3.7
5.3 Acquisition-related costs (2) 0.1 0.3 0.9 14.1 Gain on disposal
of property, plant and equipment (0.2) (0.2) (0.5) (0.5) Loss on
disposal of property, plant and equipment in unconsolidated joint
venture 0.2 — 0.2 — Impairment of goodwill, property, plant and
equipment and other assets — — 7.1 8.2 Accelerated depreciation 1.0
1.8 3.2 1.8 Interest adjustments — 0.6 — 0.6 Foreign currency, net
(3) 0.7 1.4 4.3 2.8 Tax-related adjustments — — (8.1) — Income tax
effect of adjusting items (4) (0.5) (0.4) (2.0) (0.4)
Adjusted net earnings from continuing
operations 35.5 15.5 36.7 18.5
EPS from continuing operations 0.12 0.08 (0.04) (0.15)
Adjusted EPS from continuing operations 0.34 0.15 0.36 0.18
Weighted average number of shares (millions) 102.96
102.33 102.72 102.11 (1) Represents costs in relation
to restructuring, severance and redundancy costs, pre-opening
costs, and other items, net. (2) Represents acquisition fees in
relation to the purchase of Castello di Casole in February 2018 and
Cap Juluca in May 2017. (3) Non-cash item arising from the
translation of certain assets and liabilities denominated in
currencies other than the functional currency of the respective
entity. (4) Represents income tax effect of adjusting items by
applying the applicable statutory tax rate to the adjusting items.
$ millions
Three months ended
September 30,
Nine months ended
September 30,
2018 2017 2018 2017
Adjusted share of pre-tax earnings from unconsolidated
companies reconciliation: Earnings from unconsolidated
companies (1) 4.0 3.9 8.8 7.8 Share of provision for income taxes
of unconsolidated companies 2.4 2.1 5.1 4.1 Loss on disposal of
property, plant and equipment in unconsolidated joint venture 0.2 —
0.2 —
Adjusted share of pre-tax earnings from
unconsolidated companies 6.6 6.0
14.1 11.9 (1) Represents the
Company's share of earnings from unconsolidated companies.
BELMOND LTD.
NET DEBT TO ADJUSTED EBITDA
(Unaudited)
$ millions - except
ratios Twelve months ended and as at
September 30,
2018
December 31,
2017
Cash Cash and cash equivalents 145.5 180.2
Restricted cash (including $0.9 million
and $0.8 million classified within long-term other
assets on the balance sheet for 2018 and
2017, respectively)
4.8 3.9 Total cash 150.3 184.1
Total
debt Current portion of long-term debt and capital leases 6.4
6.4 Long-term debt and obligations under capital leases (1) 740.1
700.8 Total debt 746.5 707.2
Net debt
596.2 523.1 Adjusted EBITDA 140.3 124.0
Net debt / adjusted EBITDA 4.2
4.2
(1) Long-term debt is after the deduction
of unamortized debt issuance costs and discount on secured term
loans.
$ millions
For the twelve months ended
September 30, 2018
Trailing twelve months adjusted EBITDA calculation:
Adjusted EBITDA for the twelve months ended December 31,
2017 (1) 124.0 Less: Adjusted EBITDA for the nine months ended
September 30, 2017 (108.0) Plus: Adjusted EBITDA for the nine
months ended September 30, 2018 124.3
Adjusted EBITDA for
the trailing twelve months 140.3
(1) As disclosed in the Company's 2017 earnings news release issued
on February 26, 2018.
Conference Call
Belmond Ltd. will conduct a conference call on Wednesday,
November 7, 2018 at 10:00 a.m. EST (3:00 p.m. GMT). Participants
may listen to a simultaneous webcast of the conference call by
accessing the presentations and events section of the Company’s
investor relations website at: investor.belmond.com/presentations-and-events.
Alternatively, participants may dial into the call by using any
of the following telephone numbers: +1 866 966
1396 (U.S. toll free), +44 (0) 207 192
8000 (standard international access) or 0800 376
7922 (U.K. free phone). The conference ID number is
2798195. A re-play of the conference call will be available by
telephone until 13:00 p.m. EST on Wednesday, November 14, 2018 and
can be accessed by calling +1 866 331 1332 (U.S. toll free), +44
(0) 333 300 9785 (standard international access) or 0808 238 0667
(U.K. free phone). The conference ID number is 2798195. A
replay will also be available on the Company’s investor relations
website: investor.belmond.com.
About Belmond Ltd.
Belmond (belmond.com) is a global
collection of exceptional hotel and luxury travel adventures in
some of the world’s most inspiring and enriching destinations.
Established over 40 years ago with the acquisition of Belmond Hotel
Cipriani in Venice, its unique and distinctive portfolio now
embraces 46 hotel, rail and river cruise experiences, excluding one
scheduled for an early 2019 opening in London, in many of the
world’s most celebrated destinations. From city landmarks to
intimate resorts, the collection includes Belmond Grand Hotel
Europe, St. Petersburg; Belmond Copacabana Palace, Rio de Janeiro;
Belmond Maroma Resort & Spa, Riviera Maya; and Belmond El
Encanto, Santa Barbara. Belmond also encompasses safaris, seven
luxury tourist trains, including the Venice Simplon-Orient-Express,
and two river cruises. Belmond also operates ‘21’ Club, one of New
York’s most storied restaurants. Further information on the Company
can be found at investor.belmond.com.
Definitions
All references to constant currency, which is a non-GAAP
measure, represent a comparison between periods excluding the
impact of foreign exchange movements. The Company calculates these
amounts by translating prior-year results at current-year exchange
rates. The Company analyzes certain key financial measures on a
constant currency basis to better understand the underlying results
and trends of the business without distortion from the effects of
currency movements.
Revenue per available room (“RevPAR”) is calculated by dividing
room revenue by room nights available for the period. Same store
RevPAR is a comparison of RevPAR based on the operations of the
same units in each period, by excluding the effect of any hotel
acquisitions in the period or major refurbishment where a property
is closed for a full quarter or longer. The comparison also
excludes the effect of dispositions (including discontinued
operations) or closures. Management uses RevPAR and same store
RevPAR to identify trend information with respect to room revenue
and to evaluate the performance of a specific hotel or group of
hotels in a given period.
Average daily rate ("ADR") is calculated by dividing room
revenue by rooms sold for the period. Management uses ADR to
measure the level of pricing achieved by a specific hotel or group
of hotels in a given period.
Occupancy is calculated by dividing total rooms sold by total
rooms available for the period. Occupancy measures the utilization
of a hotel’s available capacity. Management uses occupancy to
measure demand at a specific hotel or group of hotels in a given
period.
Earnings before interest, taxes, depreciation and amortization
("EBITDA"), reflects earnings / (losses) from continuing operations
excluding interest, foreign exchange (a non-cash item), tax
(including tax on unconsolidated companies), depreciation and
amortization.
Adjusted EBITDA is calculated by adjusting EBITDA for items such
as restructuring and other special items such as leases and sales,
acquisition-related costs, disposals of assets and investments,
impairments, temporary closures and certain other items (some of
which may be recurring) that management does not consider
indicative of ongoing operations or that could otherwise have a
material effect on the comparability of the Company's
operations.
Adjusted net earnings / (losses) is calculated by adjusting
earnings / (losses) from continuing operations for items such as
foreign exchange (a non-cash item), leases and sales,
acquisition-related costs, disposals of assets and investments,
impairments, temporary closures, the tax effect of adjusting items
and other one-off tax impacts, and certain other items (some of
which may be recurring) that management does not consider
indicative of ongoing operations or that could otherwise have a
material effect on the comparability of the Company's
operations.
Net debt is the sum of the Company’s current portion of
long-term debt and capital leases and long-term debt and
obligations under capital leases minus the sum of the Company’s
cash, cash equivalents and restricted cash. The Company measures
long-term debt after deducting unamortized debt issuance costs and
discount on secured term loans.
Use of Non-GAAP Financial
Measures
To supplement the Company's consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles ("U.S. GAAP"), which are filed with the Securities and
Exchange Commission ("SEC") as part of the Company's annual report
on Form 10-K and interim reports on Form 10-Q, management analyzes
the operating performance of the Company on the basis of adjusted
EBITDA. Adjusted EBITDA is the measure used by the Company’s
management team to assess the operating performance of the
Company’s businesses. Adjusted EBITDA is also presented on a
consolidated basis because management believes it helps our
investors evaluate the Company’s profitability on a basis
consistent with that of its operating segments. Adjusted EBITDA is
also a financial performance measure commonly used in the hotel and
leisure industry, although the Company’s EBITDA may not be
comparable in all instances to that disclosed by other companies.
Adjusted EBITDA should not be considered as an alternative to
earnings from operations or net earnings under U.S. GAAP for
purposes of evaluating the Company's operating performance as
presented in the Company's consolidated financial statements filed
with the SEC.
Adjusted EBITDA, when presented on a consolidated basis,
including the items set forth in the Company's reconciliations
tables, and adjusted net earnings / (losses) of the Company are
non-GAAP financial measures and do not have any standardized
meanings prescribed by U.S. GAAP. Adjusted EBITDA provides useful
information to investors about the Company because it is not
affected by non-operating factors such as leverage (affecting
interest expense), tax positions (affecting income tax expense),
the historical cost of assets (affecting depreciation expense) and
the extent to which intangible assets are identifiable (affecting
amortization expense). Adjusted EBITDA and adjusted net earnings /
(losses) are unlikely to be comparable to similar measures
presented by other companies, which may be calculated differently,
and should not be considered as an alternative to net earnings or
any other measure of performance prescribed by U.S. GAAP.
Management considers adjusted EBITDA and adjusted net earnings /
(losses) to be meaningful indicators of operations and uses them as
measures to assess operating performance. Adjusted EBITDA and
adjusted net earnings / (losses) are also used by investors,
analysts and lenders as measures of financial performance because,
as adjusted in the described manner, the measures provide a
consistent basis on which the performance of the Company can be
assessed from period to period. However, these measures are not
intended to substitute for U.S. GAAP measures of Company
performance as reflected in the Company's consolidated financial
statements filed with the SEC.
EBITDA, adjusted EBITDA and adjusted net earnings / (losses)
have limitations as analytical tools. Some of these limitations
are: they do not reflect the Company’s cash expenditures or future
requirements for capital expenditure or contractual commitments;
they do not reflect changes in, or cash requirements for, the
Company’s working capital needs; they do not reflect interest
expense, or the cash requirements necessary to service interest or
principal payments, on the Company’s debt; although depreciation
and amortization are non-cash charges, the assets being depreciated
and amortized will often have to be replaced in the future, and
EBITDA and adjusted EBITDA do not reflect any cash requirements for
such replacements; and they are not adjusted for all non-cash
income or expense items that are reflected in the Company’s
statements of cash flows.
Cautionary Statements
This news release and related oral presentations by management
contain, in addition to historical information, forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These include statements regarding the Board of
Directors' review of strategic alternatives for the Company, the
Company's three-point growth strategy, future revenue, earnings,
RevPAR, EBITDA and adjusted EBITDA, statement of operations and
cash flow outlook, investment plans, debt refinancings, asset
acquisitions, leases and sales, entry into third-party management
contracts, operating synergies and revenue opportunities, operating
systems, and benefits of the Company’s brand and similar matters
that are not historical facts and therefore involve risks and
uncertainties. These statements are based on management’s current
expectations and beliefs regarding future developments, are not
guarantees of performance and are subject to a number of
uncertainties and risks that could cause actual results to differ
materially from those described in the forward-looking statements.
Factors that may cause actual results, performance and achievements
to differ from those express or implied in the forward-looking
statements include, but are not limited to, those mentioned in the
news release and oral presentations, the impact of our review of
strategic alternatives, our ability to execute and achieve our
three-point growth strategy, future effects, if any, on the travel
and leisure markets of terrorist activity and any police or
military response, varying customer demand and competitive
considerations, failure to realize expected hotel bookings and
reservations and planned real estate sales as actual revenue,
inability to sustain price increases or to reduce costs, rising
fuel costs adversely impacting customer travel and the Company’s
operating costs, fluctuations in interest rates and currency
values, uncertainty of negotiating and completing any future asset
acquisitions, leases, sales and third-party management contracts,
debt refinancings, capital expenditures and acquisitions, inability
to reduce funded debt as planned or to obtain bank agreement to any
future requested loan agreement waivers or amendments, adequate
sources of capital and acceptability of finance terms, possible
loss or amendment of planning permits and delays in construction
schedules for expansion projects, delays in reopening properties
closed for repair or refurbishment and possible cost overruns,
shifting patterns of tourism and business travel and seasonality of
demand, adverse local weather conditions, possible challenges to
the Company’s ownership of its brands, the Company’s reliance on
technology systems and its development of new technology systems,
changing global or regional economic conditions and weakness in
financial markets which may adversely affect demand, legislative,
regulatory and political developments (including the evolving
political situation in Ukraine, Brazil, and Peru, and regional
events in Myanmar, in the United Kingdom in respect of its
withdrawal from the European Union and in the United States in
respect of its evolving immigration and trade policies and the Tax
Cuts and Jobs Act of 2017, and the resulting impact of these
situations on local and global economies, exchange rates and on
current and future demand), the threat or current transmission of
epidemics, infectious diseases, and viruses, such as the Zika virus
which may affect demand in Latin America, including the Caribbean,
and elsewhere, and possible challenges to the Company’s corporate
governance structure. Further information regarding these and other
factors that could cause management’s current expectations and
beliefs not to be realized is included in the filings by the
Company with the U.S. Securities and Exchange Commission. Except as
otherwise required by law, the Company undertakes no obligation to
update or revise publicly any forward-looking statement, whether
due to new information, future events or otherwise.
* * * * * *
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181106006007/en/
Martin O'GradyExecutive Vice President, Chief Financial
OfficerTel: +44 20 3117 1333E: martin.ogrady@belmond.comorJames
CostinGroup Financial Controller and Director of Investor
RelationsTel: +44 20 3117 1325E: james.costin@belmond.com
Belmond Ltd. (NYSE:BEL)
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