| HAMILTON, Bermuda, March 3, 2004 - Orient-Express
Hotels Ltd. (NYSE: OEH), investor in 44 deluxe hotel, restaurant, tourist
train and river cruise properties in 21 countries and manager of 38 of
those properties, today announced its results for the fourth quarter and
year ended December 31, 2003. For the quarter, net earnings were $8.6 million
($0.27 per common share) compared with $4.2 million ($0.14 per common share)
for the fourth quarter of 2002. Revenue was up 10% to $80.6 million from
$73.4 million in the prior year period.
For the year ended December 31, 2003 net earnings were $23.6 million
($0.76 per common share) compared with $25.3 million ($0.82 per common
share) in the year ended December 31, 2002. Revenue for 2003 was up 12%
from 2002, from $289.3 million to $325.2 million. Changing currency values,
particularly the Euro, British Pound and South African Rand distorted the
revenue increase, while at the same time revenue from the Hotel Quinta
do Lago ceased in November, 2003 upon its sale. The company realized a
gain on sale of this property of $4.2 million which has been included in
net earnings.
Mr. James B. Sherwood, Chairman, said that the fourth quarter results
were in line with expectation. He pointed out that Bora Bora Lagoon Resort
and Maroma Resort and Spa were closed for much of the period for major
upgrade, and start-up costs for La CabaC1a which opened in October had
to be entirely expensed in accordance with US GAAP accounting rules.
"The year 2003 has been greatly influenced by SARS at the start, the
Iraq War coming at the peak booking period, strengthening of European and
South African currencies, political hostilities affecting US tourism to
France, and until recently weak business traveller demand. These events
are changing the matrix of travel and we are moving quickly to adjust.
For example, New York and the Hawaiian Islands recorded in 2003 occupancies
back to 2000 levels because of the influx of Europeans to New York and
Asians to the Hawaiian Islands. This shift is undoubtedly due to the strong
Euro, British Pound and Japanese Yen. Our strategy is to capture European
and Asian guests for our North and South American properties while at the
same time taking advantage of increased domestic demand. We believe operating
results in 2004 will be strong for our properties in these markets.
"In Europe, fortunately our properties largely do not depend on guests
from dollar bloc countries. Only the Lisbon and Carcassonne hotels and
the Venice Simplon-Orient-Express have suffered from the downturn in visitors
from dollar bloc countries and we have refocused our sales and marketing
more towards European and Japanese regional demand to compensate.
"Asia is seeing a resurgence of demand now that the SARS epidemic has
passed. Currencies in the countries in which we operate there are generally
linked to the US dollar rather than European or Japanese currencies.
"We believe that our properties in Botswana, Myanmar and French Polynesia
have been held back because of poor access so we are in the process of
developing new air services to support them. In my opinion these properties
are unique and should be operating at capacity during their seasons. They
should do so if guests have convenient access.
"The recent report from British Airways of the sharp increase in premium
class bookings bodes well for our top end segment of the leisure business,"
he concluded.
Mr. Sherwood indicated that three investments are in active negotiation,
two of which are in Europe and the third in Asia. The Asian property would
complement the recently announced investment in the five Pansea hotels
in Southeast Asia. Offers have also been made for one property in the US
and another in South America. The company has also made an offer for a
property in Eastern Europe.
Simon Sherwood, President, said that same store RevPAR was up 12% in
the fourth quarter of 2003 compared with the year earlier period, to $171
from $152. For the year as a whole, RevPAR was up 9% to $183 from $168.
In local currencies RevPAR was down 1% for the quarter and down 4% for
the year.
He summarized full year 2003 results as follows:
Owned European hotels
For the year EBITDA was $32.8 million compared with $29.2 million in
2002. Only Portuguese and French hotels had modest earnings declines from
the prior year while Italian, Spanish and U.K. properties were well ahead
of 2002. The French and Portuguese properties had less US visitors for
the reasons earlier mentioned. Overall, Europe had an excellent 2003.
Owned North American hotels
EBITDA for 2003 was the same as in 2002, $11.1 million. Excellent improvement
at Maroma, Inn at Perry Cabin and Keswick Hall was offset by a weak corporate
market in New Orleans and the impact of Euro cost translation resulting
in higher dollar costs at La Samanna.
Owned Southern Africa hotels
EBITDA for 2003 was the same as in 2002, $4.3 million. Strong improvement
at the Mount Nelson was offset by weaker results at Orient-Express Safaris
(fewer US guests).
Owned South American hotels
EBITDA for 2003 was $7.5 million, up slightly from $7.1 million in 2002.
This market holds excellent promise for 2004 because it is within the dollar
bloc.
Owned South Pacific hotels
EBITDA loss was $0.7 million compared with EBITDA profit of $1.3 million
in 2002. Both Lilianfels in Australia and Bora Bora Lagoon Resort were
closed for part of the year for major upgrade works but lack of Japanese
guests and access problems at Bora Bora were other significant factors.
Management and part ownership interests
EBITDA for the year was $13.5 million compared with $12.4 million in
2002. The improvement was largely due to management of the Hotel Ritz in
Madrid which was assumed in April, 2003.
Restaurants
EBITDA for the year was $2.6 million compared with $3.8 million in 2002.
Earnings at `21' Club slipped during the Iraq War and because of an exceptionally
harsh 2002/2003 winter while start-up costs of La CabaC1a had to be expensed
upon opening.
Tourist trains and river cruising
EBITDA for the year was $6 million compared to $8.3 million in 2002.
The decline was largely due to reduced revenue on the Venice Simplon-Orient-Express
which travels through France and depends partially on US travellers. The
forward booking position for this train has recovered for 2004.
Simon Sherwood concluded by saying that depreciation costs had risen
from $20 million in 2002 to $25 million in 2003 because of the heavy investment
program in existing properties, acquisitions and currency factors, but
this should translate into higher profits once demand returns to normal
levels.
He also noted that in the fourth quarter of 2003 the company significantly
strengthened its finances through sale of the Hotel Quinta do Lago for
$40 million and the issue of $50 million of new equity.
"Taken together, all these factors put the company in an excellent position
to benefit from recent investment in existing properties and to fund acquisitions,"
he concluded.
ORIENT-EXPRESS HOTELS LTD
Three Months ended December 31, 2003
SUMMARY OF OPERATING RESULTS
Three months ended
December 31
$'000
2003 2002
Revenue
Owned hotels
- Europe
19,247 18,954
- North America
16,786 15,873
- Rest of World
19,733 15,328
Hotel management & part ownership
interests 3,464
3,531
Restaurants
6,838 6,390
Trains & Cruises
14,541 13,374
Total revenue
80,609 73,450
Operating Profits
Owned hotels
- Europe
1,914 1,724
- North America
2,268 2,372
- Rest of World
4,714 3,503
Hotel management & part ownership
interests 3,464
3,525
Restaurants
1,956 2,142
Trains & Cruises
2,867 2,845
Central overheads
(3,128) (2,452)
Gain on sale of Quinta do Lago
4,250 -
EBITDA
18,305 13,659
Depreciation & Amortization
(6,586) (5,191)
Interest
(2,919) (3,669)
Earnings before Tax
8,800 4,799
Tax
(182) (622)
Net earnings on common shares
8,618 4,177
Earnings per common share
0.27 0.14
Number of shares - millions
32.15 30.80
ORIENT-EXPRESS HOTELS LTD
Three Months Ended December 31, 2003
SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS
Three months ended
December 31
2003 2002
Average Daily Rate
(in dollars)
Europe
480 359
North America
319 324
Rest of World
243 195
Worldwide
320 276
Rooms Sold (thousands)
Europe
23 29
North America
31 30
Rest of World
46 47
Worldwide
100 106
RevPar (in dollars)
Europe
226 182
North America
188 210
Rest of World
126 103
Worldwide
169 152
Change %
Same Store RevPAR
Dollar Local
(in dollars)
Currency
Europe
232 203 15%
-3%
North America
203 208 -3%
-3%
Rest of World
127 102 25%
2%
Worldwide
171 152 12%
-1%
ORIENT-EXPRESS HOTELS LTD
Twelve Months ended December 31, 2003
SUMMARY OF OPERATING RESULTS
Twelve months ended
December 31
$'000
2003 2002
Revenue
Owned hotels
- Europe
115,884 99,939
- North America
66,564 58,801
- Rest of World
62,989 54,725
Hotel management & part ownership
interests 13,474
12,414
Restaurants
17,595 18,115
Trains & Cruises
48,712 45,308
Total revenue
325,218 289,302
Operating Profits
Owned hotels
- Europe
32,789 29,170
- North America
11,097 11,149
- Rest of World
11,077 12,696
Hotel management & part ownership
interests 13,474
12,408
Restaurants
2,616 3,779
Trains & Cruises
5,984 8,348
Central overheads
(12,157) (10,509)
Gain on sale of Quinta do Lago
4,250 -
EBITDA
69,130 67,041
Depreciation & Amortization
(25,265) (19,546)
Interest
(17,219) (18,351)
Earnings before Tax
26,646 29,144
Tax
(3,037) (3,850)
Net earnings on common shares
23,609 25,294
Earnings per common share
0.76 0.82
Number of shares - millions
31.14 30.80
ORIENT-EXPRESS HOTELS LTD
Twelve Months Ended December 31, 2003
SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS
Twelve months ended
December 31
2003 2002
Average Daily Rate
(in dollars)
Europe
493 376
North America
314 314
Rest of World
228 186
Worldwide
340 286
Rooms Sold (thousands)
Europe
139 157
North America
131 118
Rest of World
160 176
Worldwide
430 451
RevPar (in dollars)
Europe
280 242
North America
200 206
Rest of World
107 96
Worldwide
184 168
Change %
Same Store RevPAR
Dollars Local
(in dollars)
Currency
Europe
284 247 15%
-4%
North America
203 206 -2%
-2%
Rest of World
107 96
12% -5%
Worldwide
183 168
9% -4%
ORIENT-EXPESS HOTELS LTD
CONSOLIDATED AND CONDENSED BALANCE SHEETS
December 31 December 31
$'000
2003 2002
Assets
Cash
$ 81,347 $ 37,860
Accounts receivable
43,223 46,234
Prepaid expenses and other
11,717 9,090
Inventories
26,115 22,838
Total current assets
162,402 116,022
Real estate and other fixed assets,
net book value 822,257 757,402
Investments
146,495 85,159
Intangible assets
29,529 29,529
Other assets
12,969 10,420
$1,173,652 $998,532
Liabilities and Shareholders' Equity
Working capital facilities
$ 19,165 $ 23,800
Accounts payable
23,754 20,271
Accrued liabilities
44,835 46,831
Deferred revenue
12,617 15,107
Current portion of long-term debt
and capital 51,271
37,243
leases
Total current liabilities
151,642 143,252
Long-term debt and obligations under
capital 502,917
421,773
leases
Deferred income taxes
2,846 3,330
Minority interest
3,803 3,695
Shareholders' equity
512,444 426,482
$1,173,652 $998,532
Management believes that EBITDA (earnings before interest,
tax, depreciation and amortization) is a useful measure of operating performance,
to help determine the ability to incur capital expenditure or service indebtedness,
because it is not affected by non-operating factors such as leverage and
the historic cost of assets. EBITDA is also a financial measure commonly
used in the hotel and leisure industry. However, EBITDA does not represent
cash flow from operations as defined by US generally accepted accounting
principles, is not necessarily indicative of cash available to fund all
cash flow needs and should not be considered as an alternative to earnings
from operations under US generally accepted accounting principles for purposes
of evaluating results of operations. For a reconciliation of EBITDA with
the company's 2003 and 2002 earnings from operations, see Item 7-Management's
Discussion and Analysis in the company's Form 10-K annual report for the
year ended December 31, 2003. |
This news release contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties.
|
