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    NHH   ES0161560018

NH HOTEL GROUP, S.A.

(NHH)
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NH Hotel S A : Group reports a turnaround in results for the first time since the start of the pandemic, enabling no operating cash drain in July

07/28/2021 | 12:14pm EST
  • The gradual recovery since May, more dynamic in southern Europe, coupled with cost control, drove an improvement in EBITDA in both the second quarter and first semester of 2021
  • In the first six months of the year, the Company reported revenue of €216 million and reduced its net loss by €73 million or 33.5% to -€145 million
  • The cash drain decreased from a monthly average of €29 million in the first quarter to just €15 million between April and June, excluding proceeds from asset rotations.

Madrid, 28 July 2021.NH Hotel Group reported revenue of €154 million in the second quarter of the year, compared to €62 million in the first quarter, driven by the lifting of mobility restrictions in southern Europe. The gradual recovery since May together with cost control, enabled the Company to reduce its recurring loss in the second quarter by €93 million to -€50.8 million. Including the net capital gain from asset rotations, these losses were reduced by €140 million, or 87%, to just -€21.3 million.

In the first half of the year, the Company reported revenue of €215.9 million and reduced its net loss by €73 million or 33.5% to -€145.4 million. The cash drain decreased from a monthly average of €29 million in the first quarter to just €15 million between April and June, excluding net proceeds from asset rotations.

NH Hotel Group has had nine out of every 10 hotels open since May 2021. Average occupancy continues to improve month after month, reaching 40-45% in July, being the pace of recovery in southern Europe more notable.

Ramón Aragonés, NH Hotel Group's CEO, has highlighted as a success the fact that the Company is approaching the inflexion point in exiting the crisis with a sound financial structure, which he attributed to the measures taken in the first half, including the €400 million senior secured notes issuance, a €100-million equity investment by Minor International and the sale & leaseback of the NH Collection Barcelona Gran Hotel Calderón for €125.5 million. 'We have a solid financial foundation, with no relevant debt maturities until 2026, to face the imminent sector recovery from the best financial and capital structure position. This, coupled with the efficiency measures rolled out, will allow us to recover sooner and with greater strength', he said.

'We are leaving behind the harshest tourism sector crisis in recent history. Getting this far has required a huge effort. We have reinforced our capital structure so that we are in a position to take advantage of the opportunities that are bound to come along. We are convinced that the sacrifices and hard work of the last year and a half will bear fruit over the course of the next 18 months', said Aragonés.

Improvement month after month

Since May, the Group's revenues have been improving month by month, with a first positive effect in the second quarter of the year, where €154 million of the €216 million completed in the first half of the year were achieved. Based on current bookings and short and medium-term visibility, the Company expects the pace to continue to improve in the coming quarters, as occupancy has continued on a clearly upward trend in July.

Cost control remained a priority for the Company in the first half of the year, with reductions on fixed leases amounting to €32 million. Operating expenses decreased by €106 million in the first half, outpacing the €93 million decline in revenue during the same period. As a result, the recurring EBITDA improved by €12 million to -€136.7 million, compared to the -€149,0 million in the first half of 2020, excluding gains from asset rotations and the accounting impact of IFRS 16.

On 30 June 2021, NH Hotel Group announced the sale & leaseback of the NH Collection Barcelona Gran Hotel Calderón for €125.5 million with an associated lease for 20 years and the option of two additional renewals of 20 years each, for a total lease term of up to 60 years. The transaction generated a net capital gain of €46.7 million and an estimated net cash after tax of €113 million, which will be used to reduce debt.

Between January and June, investment in Capex was limited to €24 million, in line with the trend established for the rest of the year. As of the end of June, NH Hotel Group's liquidity stood at €478 million, while net debt amounted to €703 million. Moreover, the Group has proactively reinforced its capital structure with a €100 million equity investment, structured through a subordinated loan by its main shareholder, Minor International, last May. This loan will be capitalised through a rights issue for all shareholders which was approved at the last Annual General Meeting.

In addition, in June the hotel chain completed a successful placement of €400 million senior secured notes due July 2026 and with a 4% coupon. The proceeds were used to redeem the existing senior notes due in 2023 in the amount of €357 million. Also in June, the Company agreed the extension of its €242 million revolving credit facility (RCF) from March 2023 to March 2026, allowing it to face no relevant debt maturities until 2026.

By business unit, following the lifting of restrictions in May, the recovery in revenue has been particularly strong in southern Europe. Between April and June, revenue in Spain totalled €48 million and in Italy, €21 million, while revenue in Benelux and Central Europe, excluding the subsidies received, neared €16 million each. In general, the secondary cities outperformed the main city destinations. In Latin America, first-half revenue decreased by 19% in local currency in Mexico, by 52.4% in constant currency terms in Argentina and by 26% in local currency in Colombia and Chile.

About NH Hotel Group

NH Hotel Group is a consolidated multinational player and a benchmark city hotel operator in Europe and the Americas, where it runs more than 350 hotels. Since 2019, the Company has been working with Minor Hotels on integrating all of its hotel trademarks under a single corporate umbrella brand with a presence in over 50 countries worldwide. A portfolio of over 500 hotels has been articulated around eight brands - NH Hotels, NH Collection, nhow, Tivoli, Anantara, Avani, Elewana and Oaks - to forge a broad and diverse range of hotel propositions in touch with the needs and desires of today's world travellers.

Disclaimer

NH Hotel Group SA published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 16:13:08 UTC.


© Publicnow 2021
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Financials
Sales 2021 885 M 1 002 M 1 002 M
Net income 2021 -123 M -139 M -139 M
Net Debt 2021 2 633 M 2 979 M 2 979 M
P/E ratio 2021 -8,14x
Yield 2021 -
Capitalization 1 348 M 1 527 M 1 526 M
EV / Sales 2021 4,50x
EV / Sales 2022 2,89x
Nbr of Employees 9 788
Free-Float 15,2%
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NH Hotel Group, S.A. Technical Analysis Chart | NHH | ES0161560018 | MarketScreener
Technical analysis trends NH HOTEL GROUP, S.A.
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Income Statement Evolution
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Mean consensus HOLD
Number of Analysts 8
Last Close Price 3,10 €
Average target price 4,61 €
Spread / Average Target 49,0%
EPS Revisions
Managers and Directors
Ramón Aragonés Marin Chief Executive Officer & Director
Luis Martínez Jurado Chief Financial Officer
Alfredo Fernández Agras Chairman
Marta Marcos Senior VP-Information Technology & Systems
Rufino Pérez COO & Head-Global Transformation