Fourth Quarter 2018
- Revenue of $122.3 million, up 4% from
the prior-year quarter; up 12% on a constant currency basis
- Net losses attributable to Belmond Ltd.
of $24.6 million, compared with net losses of $29.8 million for
prior-year quarter
- Adjusted net losses from continuing
operations of $5.8 million, compared with adjusted net losses of
$6.3 million for prior-year quarter
- Adjusted EBITDA of $22.6 million, up
41% compared to adjusted EBITDA of $16.0 million for prior-year
quarter
- Same store revenue per available room
(“RevPAR”) down 2% from prior-year quarter in US dollars and up 6%
in constant currency
Full Year 2018
- Revenue of $576.8 million, up 3% from
the prior year on both a US dollar and constant currency basis
- Net losses attributable to Belmond Ltd.
of $28.5 million, compared with net losses of $45.0 million for the
prior year
- Adjusted net earnings from continuing
operations of $30.6 million, compared with adjusted net earnings of
$12.1 million for prior year
- Adjusted EBITDA of $146.9 million, up
18% compared to adjusted EBITDA of $124.0 million for prior
year
- Same store revenue per available room
(“RevPAR”) up 5% from prior year on both a US dollar and constant
currency basis
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 fourth quarter and full year ended
December 31, 2018.
Roeland Vos, president and chief executive officer, remarked:
"The strong growth momentum we generated throughout 2018 continued
into the last three months of the year. Although the fourth quarter
is seasonally small, adjusted EBITDA increased 41% in the period
when compared to the prior year. We came in towards the top-end of
our previously guided RevPAR range of 3-7% in constant currency
terms, closing the quarter with a 6% rise over last year.
We also achieved several significant strategic objectives within
the quarter. We announced in December the execution of an Agreement
and Plan of Merger with LVMH, pursuant to which LVMH will acquire
the Company for $25.00 per Class A share in cash. The announcement
follows a comprehensive review by the board of the Company’s
strategic alternatives and, subject to the satisfaction of
conditions to closing, we believe the consummation of this deal
will maximize value for our shareholders. We believe that this deal
represents an exciting new chapter for our Company and we are
pleased that the merger proposal was approved by the overwhelming
majority of our shareholders at the special general meeting on
February 14, 2019. We expect the transaction to close in the second
quarter of this year.
Meanwhile, two strategically important properties reopened in
December: Belmond La Samanna in St. Martin, and our defining asset
in the Caribbean, Belmond Cap Juluca, in Anguilla. Our ongoing
efforts to increase brand awareness resulted in Belmond being named
'British Luxury Brand of the Year' at the Walpole British Luxury
awards in November. Additionally, full-year adjusted EBITDA climbed
to $146.9 million, representing an 18% increase year-over-year.
This performance put us towards the top-end of our guidance range
and stands as one of the strongest in the Company's history.
Together, these strategic achievements and our operating results
highlight the overall strength of the Company’s performance in
2018.
As we look ahead, we see positive indications across our
existing portfolio for 2019. Belmond Cadogan Hotel, our newest and
first hotel under a management agreement in the flagship city of
London, will open tomorrow. We are working hard to accelerate
several strategic initiatives that began to generate promising
returns in 2018, as we seek to achieve our full-year growth
projections again, this year and beyond. Today, Belmond is a
growing business with an exceptional portfolio of iconic luxury
properties, and incredibly talented employees. As a Company, we
have taken great strides forward in recent years, and I am
confident that Belmond’s ability to deliver timeless, one-of-a-kind
luxury experiences will continue to reach new levels."
Fourth Quarter 2018 Operating Results
Revenue for the fourth quarter of 2018 was $122.3 million, a
$5.0 million increase in revenue from the fourth quarter of 2017.
In constant currency, revenue for the fourth quarter of 2018
increased by $13.4 million from the fourth quarter of 2017 due to
strong performances at Venice Simplon-Orient-Express; Belmond
Charleston Place, South Carolina; Belmond Hotel das Cataratas,
Iguassu Falls, Brazil; and Belmond Copacabana Palace Hotel, Rio de
Janeiro, Brazil. Additionally, Belmond Cap Juluca, Anguilla,
British West Indies, and Belmond La Samanna, St. Martin, French
West Indies both reopened in December 2018 following Hurricanes
Irma and Jose that hit both islands in September 2017. These
increases were partially offset by declines at Belmond Road to
Mandalay, Myanmar and Belmond Reid's Palace, Madeira, Portugal.
Net losses attributable to Belmond Ltd. for the fourth quarter
of 2018 were $24.6 million ($0.24 per common share), which compared
to net losses attributable to Belmond Ltd. of $29.8 million ($0.29
per common share) for the fourth quarter of 2017. This improvement
is largely due to the increase in revenue mentioned above and other
operating income received of $2.7 million in relation to an
insurance gain recorded at '21' Club, New York following water
damage from burst pipes in January 2018.
Adjusted net losses from continuing operations for the fourth
quarter of 2018 were $5.8 million ($0.06 per common share),
compared to adjusted net losses from continuing operations of $6.3
million ($0.06 per common share) for the fourth quarter of
2017.
Same store RevPAR for owned hotels for the fourth quarter of
2018 decreased 2% from the prior-year quarter on a US dollar basis.
On a constant currency basis same store RevPAR for owned hotels for
the fourth quarter of 2018 increased 6%.
Adjusted EBITDA for the fourth quarter of 2018 was $22.6 million
up 41%, compared to an adjusted EBITDA of $16.0 million for the
fourth quarter of 2017. In constant currency, adjusted EBITDA for
the fourth quarter of 2018 was up $8.7 million or 59% compared to
the fourth quarter of 2017.
Full Year 2018 Operating Results
Revenue for the full year 2018 was $576.8 million, a $15.8
million increase from revenue for the full year 2017. In constant
currency, revenue for the full year 2018 increased $14.8 million
from the prior year.
Net losses attributable to Belmond Ltd. for the full year 2018
were $28.5 million ($0.28 per common share), compared to net losses
of $45.0 million ($0.44 per common share) for the full year 2017.
This improvement is due to the increase in revenue, $16.9 million
other operating income relating to insurance gains recorded in
2018, and a charge of $29.3 million recorded in 2017 related to a
non-cash impairment of fixed assets in the Company's unconsolidated
rail joint venture in Peru. This growth is offset by an increase of
$8.1 million in the Company's provision for income taxes, a charge
of $13.9 million to restructure the Company’s labor force at
Belmond La Samanna, and $8.5 million of expenses and fees for
professional services related to the board's review of strategic
alternatives for the full year 2018.
Adjusted net earnings from continuing operations for the full
year 2018 were $30.6 million ($0.30 per common share), a $18.5
million increase from $12.1 million ($0.12 per common share) for
the full year 2017.
Same store RevPAR for owned hotels for the full year 2018
increased 5% from the prior year on both a constant currency and US
dollar basis as a result of a 5% increase in average daily rate
("ADR").
Adjusted EBITDA for the full year 2018 was $146.9 million, a
$22.9 million or 18% increase from adjusted EBITDA for the full
year 2017 of $124.0 million. In constant currency, adjusted EBITDA
for the full year 2018 increased $22.3 million or 18% from the full
year 2017.
Recent Company Highlights
- Enters into Agreement and Plan of
Merger with LVMH to acquire the Company for $25.00 per Class A
share in cash - On December 13, 2018 Belmond Ltd. (the
“Company”) entered into an Agreement and Plan of Merger with LVMH
Moët Hennessy–Louis Vuitton SE, Palladio Overseas Holding Limited
and Fenice Ltd. (collectively, “LVMH”) pursuant to which LVMH will
acquire the Company. The merger proposal was approved at a Special
General Meeting of Belmond's shareholders on February 14, 2019.
Subject to the satisfaction of the remaining closing conditions,
this transaction is expected to close in the first half of
2019.
- Named 'British Luxury Brand of the
Year' at Walpole British Luxury Awards 2018 - On November 19,
2018 Belmond was named ‘British Brand of the Year’, the top
accolade at the 17th annual British Luxury Awards hosted by
Walpole,the official sector body for UK luxury. Previous winners
have included Burberry, Rolls Royce and Jaguar. Belmond is the
first travel and hospitality brand to receive this award,
distinguishing it as a leading luxury brand as officially
recognized by the industry.
- Reopens two strategically
significant properties in the Caribbean - On December 10 and
December 15, 2018 respectively, Belmond reopened two properties in
the Caribbean region: Belmond La Samanna on the island of St
Martin, and Belmond Cap Juluca, on the island of Anguilla.
Following a comprehensive operational restructure and complete
redesign by award-winning Muza Lab London, Belmond La Samanna was
reopened in time for the peak tourist season. Belmond Cap Juluca
opened five days later and, through timeless and sophisticated art
direction, the resort has been completely reimagined and fully
restored to its legendary status and will support Belmond’s brand
position for offering authentic escapes that connect guests with
nature and celebrates local culture. Belmond partnered with
British-born Hollywood actress Naomie Harris on the production of a
film to promote the opening, positioned as the ‘ultimate barefoot
luxury escape.’
- Opening first hotel in flagship city
of London under Belmond management - On February 28, 2019
Belmond’s first London property, Belmond Cadogan Hotel, will open
under the Company’s management in what is a strategically important
flagship European city. The property, originally built in 1887,
will be a stylish retreat between the sought-after boroughs of
Chelsea and Knightsbridge that embraces quiet luxury, literature,
culture, and art. Design details rendered through expert
craftsmanship pay homage to former patrons, including Oscar Wilde
and Lillie Langtry, and celebrate the building’s quirky, rich
history.
Fourth Quarter 2018 Business Unit Results
Owned hotels:
Europe:
For the fourth quarter of 2018, revenue from owned hotels for
the region was $28.4 million, a decrease of $3.2 million or 10%
from $31.6 million for the fourth quarter of 2017. In constant
currency, revenue for the region for the fourth quarter of 2018
increased $1.1 million or 4% from the prior year quarter due to
growth at Belmond Grand Hotel Timeo, Taormina, Sicily, which
remained open for the full fourth quarter of 2018 for the first
time to capitalize on a strong season that saw the benefits of a
new rate strategy and increased exposure following the hosting of
the G7 summit in May 2017.
In constant currency, same store RevPAR for owned hotels in the
region decreased 3% from the prior-year quarter as a result of a 6%
increase in ADR offset by a four percentage point decrease in
occupancy.
Adjusted EBITDA for the region for the quarter was a loss of
$0.8 million, down $3.0 million compared to adjusted EBITDA of $2.2
million for the fourth quarter of 2017. In constant currency,
adjusted EBITDA for the region for the fourth quarter of 2018
decreased $1.2 million from the prior year quarter. This decrease
is largely due to off-season losses of $0.5 million at Belmond
Castello di Casole, Tuscany, Italy, that was acquired earlier this
year, and a decline of $0.5 million at Belmond Reid's Palace, which
has been impacted by the return of markets in North Africa and
Turkey.
North America:
Revenue from owned hotels for the fourth quarter of 2018 was
$41.3 million, up $7.3 million or 21% from $34.0 million for the
fourth quarter of 2017. In constant currency, revenue for the
region for the fourth quarter of 2018 also increased $7.3 million
from the prior-year quarter. The increase is largely attributable
to Belmond La Samanna and Belmond Cap Juluca, which have both
reopened in December 2018 after full refurbishment following the
hurricanes that hit both properties in September 2017; and Belmond
Charleston Place, which continues to benefit from the popularity of
the destination and enhanced revenue management strategies.
In constant currency, same store RevPAR for owned hotels in the
region increased 9% from the prior-year quarter due to a four
percentage point increase in occupancy and a 2% increase in
ADR.
Adjusted EBITDA for the region for the quarter was $12.9
million, an increase of $4.9 million or 61% from $8.0 million for
the fourth quarter of 2017. In constant currency, adjusted EBITDA
for the region for the fourth quarter of 2018 also increased $4.9
million due to improvements of $1.7 million at Belmond Charleston
Place and $1.5 million at Belmond Cap Juluca. Operating losses of
$1.4 million at Belmond La Samanna and $2.2 million at Belmond Cap
Juluca have been added back to adjusted EBITDA while the properties
were closed for renovation for the majority of the fourth quarter
of 2018. During the fourth quarter, insurance proceeds of $4.1
million were received at '21' Club, relating to water damage
suffered in January 2018, resulting in the recording of other
income of $2.7 million and an adjusted EBITDA gain of $1.1
million.
Rest of world:
Revenue from owned hotels for the fourth quarter of 2018 was
$36.7 million, an increase of $1.1 million or 3% from $35.6 million
for the fourth quarter of 2017. In constant currency, revenue for
the fourth quarter of 2018 increased $4.1 million or 12% from the
prior year quarter, principally as a result of a $1.6 million
increase in revenue at Belmond Hotel das Cataratas following
positive media coverage of the destination and reduced visa
restrictions in the country; a $1.5 million increase at Belmond
Copacabana Palace, due to increased groups revenue and the strong
performance of its recently renovated "Pérgula" restaurant; and a
$1.1 million increase at the Belmond Safaris in Botswana as Belmond
Savute Elephant Lodge, Chobe Reserve, was closed for the majority
of the fourth quarter of 2017 for refurbishment.
In constant currency, same store RevPAR for owned hotels in the
region increased 10% from the prior-year quarter as a result of a
one percentage point increase in occupancy and an 8% increase in
ADR.
Adjusted EBITDA for the region for the quarter was $10.3 million
compared to $8.6 million for the prior-year quarter. In constant
currency, adjusted EBITDA for the region increased by $2.2 million
or 26% from the prior-year quarter as a result of a $1.0 million
increase at Belmond Copacabana Palace, a $0.7 million increase at
Belmond Hotel das Cataratas, and a $0.5 million increase at Belmond
Safaris.
Owned trains & cruises:
Revenue for the fourth quarter of 2018 was $12.8 million, up
$0.2 million or 2% from $12.6 million for the fourth quarter of
2017. In constant currency, revenue increased $1.3 million or 11%.
The increase was driven by Venice Simplon-Orient-Express which has
continued to deliver a strong performance this year as it benefits
from recent capital improvements, enhanced revenue management
activities and media exposure, offset by a decline at Belmond Road
to Mandalay, which continues to suffer from reduced tourist
arrivals in Myanmar.
Adjusted EBITDA for the quarter was $1.9 million, an increase of
$2.8 million from the fourth quarter of 2017. In constant currency,
adjusted EBITDA for the segment increased by $3.1 million with
growth across the majority of the portfolio but primarily driven by
growth from the Venice Simplon-Orient-Express.
Management fees:
Adjusted EBITDA from management fees for the fourth quarter of
2018 was $3.8 million, flat compared to the fourth quarter of
2017.
Share of pre-tax earnings from
unconsolidated companies:
Adjusted share of pre-tax earnings from unconsolidated companies
for the fourth quarter of 2018 was $4.6 million, an increase of
$1.0 million compared to $3.6 million for the fourth quarter of
2017 due to an increase in passenger numbers and freight revenue at
the Company's PeruRail joint venture.
Central overheads:
For the fourth quarter of 2018, adjusted central overheads were
$6.5 million compared to adjusted central overheads of $6.1 million
in the prior-year quarter due to increased development and other
corporate headcount to support the Company's strategic growth
plan.
Provision for income taxes:
For the fourth quarter of 2018, provision for income taxes was
$8.1 million compared to a benefit of $11.0 million for the prior
year quarter. The increase in tax provision is mainly as
a result of a deferred tax benefit of $19.8 million in the prior
year quarter following the reduction in the U.S. corporate tax rate
from 35 to 21 per cent, effective January 1, 2018.
Investments
During the fourth quarter of 2018, the Company invested a total
of $40.2 million in its portfolio, including $23.3 million on the
refurbishment of Belmond Cap Juluca; $11.3 million on the
refurbishment of Belmond La Samanna; $0.8 million for the
refurbishment of '21' Club following water damage from burst pipes
earlier in the year; and $0.7 million at Venice
Simplon-Orient-Express for routine capital works.
Transaction costs
As described above, on December 13, 2018, the Company entered
into a Merger Agreement with LVMH, Holding, and Merger Sub,
pursuant to which LVMH will acquire the Company. During the year
ended December 31, 2018, expenses and fees for professional
services related to the board's review of strategic alternatives of
$8.5 million were recognized within selling, general and
administrative expenses in the statements of consolidated
operations. If the Merger is consummated, the Company expects to
incur additional costs related to the board's review of strategic
alternatives which may be material. If the Merger Agreement is
terminated under certain specified circumstances, Belmond may
be required to pay to LVMH a termination fee equal to $92.3 million
under the terms of the Merger Agreement.
Balance Sheet
At December 31, 2018, the Company had total debt of $759.9
million and cash balances of $111.8 million, resulting in net debt
of $648.1 million and a ratio of net debt to trailing-twelve-month
adjusted EBITDA of 4.4 times. This compared to net debt of $523.1
million and a ratio of net debt to trailing-twelve-month adjusted
EBITDA of 4.2 times at December 31, 2017.
Outlook
In light of the impending transaction with LVMH described
earlier in this release, the Company will not be providing any
guidance about operating results and performance for future
periods.
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 12
Reconciliations - Adjusted Net Earnings / (Losses) 13
Reconciliations - Adjusted Share of Pre-Tax Earnings from
Unconsolidated Companies 14 Net Debt to Adjusted EBITDA 15
BELMOND LTD.
STATEMENTS OF CONDENSED CONSOLIDATED
OPERATIONS
(Unaudited)
$
millions – except per share amounts
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017 2018 2017
Revenue 122.3 117.3 576.8 561.0 Expenses: Cost of
services 52.7 55.1 254.1 239.9 Selling, general and administrative
64.1 54.1 257.5 238.2 Depreciation and amortization 15.7 17.0 61.3
62.9 Impairment of goodwill 2.5 5.5 4.7 5.5 Impairment of property,
plant and equipment and other assets 0.1 — 5.0 8.2
Total operating costs and expenses 135.1 131.7 582.6
554.7 Gain on disposal of property, plant and equipment 0.4
(0.6 ) 0.8 (0.2 ) Other operating income 2.7 — 16.9
— (Losses)/earnings from operations (9.7 )
(15.0 ) 11.9 6.1 Interest income 0.5 0.5 1.3 1.1 Interest
expense (8.2 ) (7.9 ) (33.1 ) (32.5 ) Foreign currency, net 0.5
(0.3 ) (3.8 ) (3.0 )
Losses before income taxes and earnings
from unconsolidated companies,net of tax
(16.9 ) (22.7 ) (23.7 ) (28.3 ) (Provision for)/benefit from
income taxes (8.1 ) 11.0 (14.0 ) (6.6 )
Losses before earnings from unconsolidated companies, net of tax
(25.0 ) (11.7 ) (37.7 ) (34.9 )
Earnings/(losses) from unconsolidated
companies, net of taxprovision/(benefit) of $2.0, ($8.5), $7.1 and
($4.5)
0.6 (18.0 ) 9.4 (10.2 ) Losses from
continuing operations (24.4 ) (29.7 ) (28.3 ) (45.1 )
Net earnings from discontinued operations,
net of tax provision of $Nil, $Nil,$Nil and $Nil
— — — 0.2 Net losses (24.4 ) (29.7 )
(28.3 ) (44.9 ) Net earnings attributable to non-controlling
interests (0.2 ) (0.1 ) (0.2 ) (0.1 )
Net losses attributable to Belmond Ltd. (24.6 ) (29.8 )
(28.5 ) (45.0 ) EPS attributable to Belmond Ltd. (0.24 )
(0.29 ) (0.28 ) (0.44 ) Weighted average number of shares –
millions 102.96 102.33 102.78
102.17
BELMOND LTD.
SEGMENT INFORMATION
(Unaudited)
$
millions
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017 2018 2017
Revenue Owned hotels - Europe 28.4 31.6 238.4
212.4 - North America 41.3 34.0 132.3 149.3 - Rest of world 36.7
35.6 122.2 124.2 Total owned hotels
106.4 101.2 492.9 485.9 Owned trains & cruises 12.8 12.6 70.8
63.2 Management fees 3.1 3.5 13.1 11.9
Revenue 122.3 117.3 576.8 561.0
Adjusted EBITDA Owned hotels - Europe (0.8 )
2.2 79.0 73.7 - North America 12.9 8.0 38.1 29.8 - Rest of world
10.3 8.6 24.6 24.5 Total owned hotels
22.4 18.8 141.7 128.0 Owned trains & cruises 1.9 (0.9 ) 13.5
4.4 Management fees 3.8 3.8 15.4 15.3 Share of pre-tax earnings
from unconsolidated companies 4.6 3.6 18.8
15.4 32.7 25.3 189.4 163.1 Central overheads (6.5 )
(6.1 ) (29.5 ) (27.8 ) Share-based compensation (1.1 ) (0.8 ) (6.0
) (5.8 ) Central marketing costs (2.5 ) (2.4 ) (7.0 ) (5.5 )
Adjusted EBITDA 22.6
16.0 146.9
124.0
BELMOND LTD.
SUMMARY OF OPERATING INFORMATION FOR
OWNED HOTELS
Three months ended December 31, Twelve
months ended December 31, 2018 2017
2018 2017 Room Nights Available
Europe 64,013 59,621 288,519 273,756 North America 61,250 57,592
231,875 255,862 Rest of world 94,392 93,660 372,678 374,478
Worldwide 219,655 210,873 893,072 904,096
Room Nights
Sold Europe 32,716 32,867 181,465 176,129 North America 41,155
36,992 160,267 171,906 Rest of world 57,261 55,593 204,013 200,537
Worldwide 131,132 125,452 545,745 548,572
Occupancy
Europe 51% 55% 63% 64% North America 67% 64% 69% 67% Rest of world
61% 59% 55% 54% Worldwide 60% 59% 61% 61%
ADR (in U.S.
dollars) Europe 469 516 812 740 North America 488 404 430 426
Rest of world 388 384 368 380 Worldwide 440 424 534 510
RevPAR (in U.S. dollars) Europe 240 284 511 476 North
America 328 259 297 286 Rest of world 235 228 201 203 Worldwide 262
252 326 309
Same Store RevPAR (in U.S. dollars) (1)
Europe 236 284 510 476 North America 285 262 286 272 Rest of world
233 229 200 203 Worldwide 248 254 321 307
Same Store
RevPAR (% change) U.S. dollar Constant currency
U.S. dollar Constant currency Europe (17)% (3)% 7% 4%
North America 9% 9% 5% 5% Rest of world 2% 10% (1)% 4% Worldwide
(2)% 6% 5% 5%
(1) Same store RevPAR data for the three
months ended December 31, 2018 and 2017 and twelve months ended
December 31, 2018 and 2017excludes the operations of Belmond
Castello di Casole that was acquired in February 2018. Its
operations are included in the Europe segment. Italso excludes the
operations of Belmond Cap Juluca, Anguilla, British West Indies,
which was acquired in May 2017 and Belmond La Samanna, StMartin,
French West Indies, which were both closed for refurbishment
following Hurricanes Irma and Jose in September 2017. Both of
theseoperations are included in the North America segment. In
addition, same store RevPAR excludes the operations of Belmond
Savute Elephant Lodge,Chobe Reserve, Botswana, which was closed for
refurbishment from November 2017 to June 2018. Its operations are
included in the Rest of worldsegment.
BELMOND LTD.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
$ millions
December 31, December 31, 2018
2017 Assets Cash 108.4 180.2 Restricted cash
1.9 3.1 Accounts receivable 37.7 34.4 Due from unconsolidated
companies 10.3 12.8 Prepaid expenses and other 13.4 13.3
Inventories 21.2 23.1 Total current assets 192.9
266.9 Property, plant & equipment, net of accumulated
depreciation 1,261.9 1,168.0 Investments in unconsolidated
companies 69.2 64.6 Goodwill 111.1 120.2 Other intangible assets
27.1 19.8 Pension assets 0.2 — Other assets 13.4 14.1
Total assets (1) 1,675.8 1,653.6
Liabilities and Equity Accounts payable 23.0 15.8 Accrued
liabilities 103.9 79.5 Deferred revenue 40.2 32.8 Current portion
of long-term debt and capital leases 6.3 6.4 Total
current liabilities 173.4 134.5 Long-term debt and
obligations under capital leases 753.6 700.8 Liability for pension
benefit — 0.6 Other liabilities 4.0 3.0 Deferred income taxes 104.0
115.4 Liability for uncertain tax positions 0.6 0.5
Total liabilities
(2) 1,035.6 954.8 Shareholders’
equity 639.5 698.5 Non-controlling interests 0.7 0.3 Total
equity 640.2 698.8
Total liabilities and
equity 1,675.8 1,653.6
(1) Balance at December 31, 2018 includes
$204.9 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 December 31, 2018 includes
$171.0 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
(Unaudited)
$
millions
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017 2018 2017
Adjusted EBITDA reconciliation: (Losses) from
continuing operations (24.4 ) (29.7 ) (28.3 ) (45.1 ) Depreciation
and amortization 15.7 17.0 61.3 62.9 Interest income (0.5 ) (0.5 )
(1.3 ) (1.1 ) Interest expense 8.2 7.9 33.1 32.5 Foreign currency,
net (0.5 ) 0.3 3.8 3.0 Provision for/(benefit from) income taxes
8.1 (11.0 ) 14.0 6.6 Share of provision for income taxes of
unconsolidated companies 2.0 (8.5 ) 7.1 (4.5 ) 8.6
(24.5 ) 89.7 54.3 Insurance gains and deductibles (1.6 ) 0.3
(11.6 ) 1.5 Labor restructuring cost (1) (1.0 ) — 13.9 — Net
operating losses at two Caribbean properties while closed 3.6 3.1
15.0 3.8 Cost to terminate right of first refusal and purchase
option (2) (0.1 ) — 13.0 — Strategic review costs (3) 6.1 — 8.5 —
Other restructuring and special items (4) 2.7 0.9 6.3 6.4
Acquisition-related costs (5) — — 0.9 14.0 (Gain)/loss on disposal
of property, plant and equipment (0.4 ) 0.6 (0.8 ) 0.2 Loss on
disposal of property, plant and equipment in unconsolidated
companies — — 0.2 — Impairment of goodwill, property, plant and
equipment and other assets (6) 2.6 5.5 9.7 13.7 Impairment of
assets in unconsolidated companies (7) 2.1 30.1 2.1 30.1
Adjusted EBITDA 22.6
16.0 146.9
124.0
(1) Represents charges for employee
termination costs and other associated costs to restructure the
Company’s labor force at Belmond La
Samanna.
(2) Represents estimated costs to
terminate purchase rights previously held by Mr James Sherwood, a
former director of the Company, in respect
of the Belmond Hotel Cipriani.
(3) Represents legal, professional and
other internal costs in relation to the Company's strategic
review.
(4) Represents costs in relation to
restructuring, severance and redundancy costs, pre-opening costs,
and other items, net.
(5) Represents acquisition fees in relation to the purchase of
Castello di Casole in February 2018 and Cap Juluca in May 2017.
(6) Represents an impairment charge at
three and five owned properties in the three and twelve months
ended 31 December 2018 respectively.
Represents an impairment charge at one and
three owned properties in the three and twelve months ended 31
December 2017, respectively.
(7) Represents an impairment charge at one
of the Company's Peru unconsolidated hotels and PeruRail
unconsolidated company in the years
ended December 2018 and 2017,
respectively.
BELMOND LTD.
RECONCILIATIONS - ADJUSTED NET
(LOSSES)/EARNINGS
(Unaudited)
$
millions – except per share amounts
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017 2018 2017
Adjusted net (losses)/earnings reconciliation:
(Losses) from continuing operations (24.4 ) (29.7 ) (28.3 ) (45.1 )
Insurance gains and deductibles (1.6 ) 0.3 (11.6 ) 1.5 Labor
restructuring cost (1) (1.0 ) — 13.9 — Net operating losses at two
Caribbean properties while closed 3.6 3.1 15.0 3.8 Cost to
terminate right of first refusal and purchase option (2) (0.1 ) —
13.0 — Strategic review costs (3) 6.1 — 8.5 — Other restructuring
and special items (4) 2.7 0.9 6.3 6.4 Acquisition-related costs (5)
— — 0.9 14.0 (Gain)/loss on disposal of property, plant and
equipment (0.4 ) 0.6 (0.8 ) 0.2 Loss on disposal of property, plant
and equipment in unconsolidated companies — — 0.2 — Impairment of
goodwill, property, plant and equipment and other assets (6) 2.6
5.5 9.7 13.7 Impairment of assets in unconsolidated companies (7)
2.1 30.1 2.1 30.1 Accelerated depreciation (8) 0.3 1.8 3.6 3.5
Interest adjustments — — — 0.6 Foreign currency, net (9) (0.5 ) 0.3
3.8 3.0 Tax-related adjustments (10) 4.6 (10.2 ) (3.5 ) (10.2 )
Income tax effect of adjusting items (11) 0.2 (9.0 ) (2.2 ) (9.4 )
Adjusted net (losses)/earnings from
continuing operations (5.8 ) (6.3 )
30.6 12.1 EPS from continuing
operations (0.24 ) (0.29 ) (0.28 ) (0.44 ) Adjusted EPS from
continuing operations (0.06 ) (0.06 ) 0.30 0.12 Weighted average
number of shares (millions) 102.96 102.33
102.78 102.17
(1) Represents charges for employee
termination costs and other associated costs to restructure the
Company’s labor force at Belmond La
Samanna.
(2) Represents estimated costs to
terminate purchase rights previously held by Mr James Sherwood, a
former director of the Company, in respect
of the Belmond Hotel Cipriani.
(3) Represents legal, professional and other internal costs in
relation to the Company's strategic review. (4) Represents costs in
relation to restructuring, severance and redundancy costs,
pre-opening costs, and other items, net. (5) Represents acquisition
fees in relation to the purchase of Castello di Casole in February
2018 and Cap Juluca in May 2017.
(6) Represents an impairment charge at
three and five owned properties in the three and twelve months
ended 31 December 2018 respectively.
Represents an impairment charge at one and
three owned properties in the three and twelve months ended 31
December 2017, respectively.
(7) Represents an impairment charge at one
of the Company's Peru unconsolidated hotels and PeruRail
unconsolidated company in the years
ended December 2018 and 2017,
respectively.
(8) Represents additional depreciation charge to write assets down
to nil ahead of their anticipated replacement.
(9) Non-cash item arising from the
translation of certain assets and liabilities denominated in
currencies other than the functional currency of the
respective entity.
(10) Represents various non-recurring charges/credits recorded
within the Company's provision for income taxes. (11) Represents
income tax effect of adjusting items by applying the applicable
statutory tax rate to the adjusting items.
BELMOND LTD.
RECONCILIATIONS - ADJUSTED SHARE OF
PRE-TAX EARNINGS FROM UNCONSOLIDATED COMPANIES
(Unaudited)
$ millions
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017 2018 2017
Adjusted share of pre-tax earnings from unconsolidated
companies reconciliation: Earnings/(losses) from
unconsolidated companies (1) 0.6 (18.0 ) 9.4 (10.2 ) Share of
provision for/(benefit from) income taxes of unconsolidated
companies 2.0 (8.5 ) 7.1 (4.5 ) Loss on disposal of property, plant
and equipment in unconsolidated companies — — 0.2 — Impairment of
assets in unconsolidated companies 2.1 30.1 2.1 30.1
Adjusted share of pre-tax
earnings from unconsolidated companies 4.7
3.6 18.8 15.4 (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
December 31,
2018
December 31,
2017
Cash Cash and cash equivalents 108.4 180.2
Restricted cash (including $1.5 million
and $0.8 million classified within long-term other
assets on the balance sheet for 2018 and
2017, respectively)
3.4 3.9 Total cash 111.8 184.1
Total
debt Current portion of long-term debt and capital leases 6.3
6.4 Long-term debt and obligations under capital leases (1) 753.6
700.8 Total debt 759.9 707.2
Net debt
648.1 523.1 Adjusted EBITDA 146.9 124.0
Net debt / adjusted EBITDA 4.4
4.2 (1) Long-term debt is after the deduction of
unamortized debt issuance costs and discount on secured term loans.
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
potential sale of the Company to LVMH, 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, risks related to the potential sale of the Company
to LVMH, 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/20190227005874/en/
Martin O'GradyExecutive Vice President, Chief Financial
OfficerTel: +44 20 3117 1333E: martin.ogrady@belmond.com
James CostinGroup Financial Controller and Director of Investor
RelationsTel: +44 20 3117 1325E: james.costin@belmond.com
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