Press Release: Orient-Express Hotels Ltd.
November 7, 2000
HAMILTON, Bermuda -- The following press release was issued today by Orient-Express Hotels Ltd.:
Orient-Express Hotels Ltd. (NYSE: OEH; www.orient-express.com ) which
completed its initial public offering on August 9, 2000 and was listed on the New York Stock Exchange the following
day, made its first quarterly earnings release to its shareholders today.
For the quarter ended September 30, 2000, earnings before interest, tax and depreciation (EBITDA) were $22.6 million,
up 14% from the prior year period, on revenue of $73.3 million, while net income was $10.7 million. In the prior
year period EBITDA was $19.8 million on revenue of $65.3 million, and net income was $9.9 million. Earnings per
share (EPS) were $0.37 in the latest quarter. EPS comparisons with prior year are not meaningful in view of the
changes in equity and debt structure made before the initial public offering (IPO).
For the nine months ended September 30, 2000, EBITDA was up 17% over the prior year period to $61.5 million on
revenue of $206.2 million and net income before a sales gain* in 1999 was up 16% to $28.1 million. Earnings per
common share were $1.05. Prior year EBITDA was $52.5 million on revenues of $184.7 million and net income was $24.3
million excluding the sales gain.
Mr. James B. Sherwood, chairman, said that this result was ahead of consensus forecast and had been achieved despite
the weakening of the Euro against the U.S. dollar. Fourteen of the company's 35 properties are in Europe. He indicated
that the weakening of the Euro bodes well for 2001 because costs in dollar terms have declined while rates in dollar
terms will be adjusted upward. EBITDA in U.S. dollars of European hotels both in the third quarter and for the
nine months were approximately the same this year as last, reflecting stronger performance in local currencies.
He noted that same store revenue per available room (REVPAR) growth at the European hotels was 14% for the quarter
and 12% for the nine months in local currency.
For the North American properties the third quarter is the low season at the Windsor Court, '21' Club and La Samanna.
EBITDA in that region was similar to the prior year quarter but 12% ahead for the nine month period with an underlying
13% same store REVPAR growth.
Properties in the rest of the world registered a strong EBITDA increase both for the quarter and the nine months
over the prior year with same store REVPAR growth of 8% and 17% respectively. Tourist trains and river cruising
were also strongly ahead of the year earlier periods.
Mr. Simon M.C. Sherwood, president, said that on September 18, 2000 the company had purchased the historic Granary
of Venice adjacent to the Hotel Cipriani for about $2.5 million.
This property will enable the hotel to expand its banqueting, conference and restaurant facilities in addition
to permitting a number of additional rooms to be built, and should make a contribution to profits in 2001, increasing
in the following years as the build-out continues.
He indicated that negotiations were well advanced towards acquiring, probably in the first quarter of 2001, two
additional hotel properties. He also said that recently two large companies had decided to reduce their holdings
of hotel properties meeting Orient-Express Hotels investment criteria and this may provide opportunities.
Mr. James G. Struthers, chief financial officer, said that during the quarter the company decided to lock in the
low Euro interest rates that it pays on debt secured on its European properties. The equivalent of $100 million
of Euros was fixed for two years at attractive rates. The company now has approximately 50% of its debt in Euros
and 40% of total debt is at fixed rates. The net proceeds from the IPO of $87 million have been used to repay secured
debt on all of the North American properties. The company is currently in the process of refinancing these assets,
which should increase the group's cash availability by substantially more than the IPO proceeds, recognizing the
increased value of these properties since they were last financed.
This press release contains, in addition to historical information, forward-looking statements that involve risks
and uncertainties. These include statements regarding earnings growth, investment plans and similar matters that
are not historical facts. These statements are based on management's current expectations 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 a difference include, but are not limited to, those mentioned
in the press release, customer demand and competitive considerations, inability to increase prices or reduce costs,
seasonality and adverse weather conditions, interest rate and currency value fluctuations, uncertainty of negotiating
and completing proposed purchase or sale transactions, adequate sources of capital and acceptability of finance
terms, global and regional economic conditions, shifting patterns of tourism, and legislative, regulatory and political
developments. Further information regarding these and other factors is included in the filings by the company and
Sea Containers Ltd. with the U.S. Securities and Exchange Commission.
* Gain of $1.3 million on sale of the Windermere Island Club in Q1 1999.
ORIENT-EXPRESS HOTELS LIMITED
THREE MONTHS ENDED SEPTEMBER 30th 2000
SUMMARY OF OPERATING RESULTS
(UNAUDITED)
Three months ended
September 30th
2000 1999
$000 $000
Revenue
Owned hotels 54,801 50,028
Hotel management interests 2,675 2,729
Restaurants 3,337 3,100
Total hotels & Restaurants 60,813 55,857
Trains & Cruises 12,517 9,492
Total revenue 73,330 65,349
EBITDA
Owned hotels (see attached) 18,400 17,839
Hotel management interests 2,672 2,725
Restaurants 238 193
Total hotels & Restaurants 21,310 20,757
Trains & Cruises 3,636 1,305
Central overheads (2,383) (2,267)
Total EBITDA 22,563 19,795
Depreciation & Amortisation (3,813) (3,596)
Earnings before Interest & Tax 18,750 16,199
Interest (6,531) (4,733)
Earnings before Tax 12,219 11,466
Tax (1,573) (1,584)
Net earnings on common shares 10,646 9,882
Earnings per share (a) $0.37 $0.38
(a) Earnings per share comparisons with prior year are not meaningful in
view of the changes in equity and debt structure made before the
initial public offering.
ORIENT-EXPRESS HOTELS LIMITED
THREE MONTHS ENDED SEPTEMBER 30th 2000
Owned Hotels - Analysis of Operating Results
Owned Hotels $000 EUROPE NORTH AMERICA
2000 1999 2000 1999
Revenue 29,634 29,752 12,556 12,079
EBITDA 13,415 13,967 1,699 1,811
Overall ADR 359 381 263 239
Rooms sold 53,392 50,986 29,596 29,650
Overall Revpar 304 307 180 165
Same Store Revpar ($) 304 307 151 138
Same Store Growth -1% +10%
Same Store
Local currency Revpar growth +14% +10%
EBITDA TOP REGIONAL
EARNING HOTELS (US$k)
Windsor Court 1,385 1,311
Copacabana
Cipriani 4,800 4,571
Owned Hotels $000 REST OF WORLD TOTAL
2000 1999 2000 1999
Revenue 12,611 8,197 54,801 50,028
EBITDA 3,286 2,061 18,400 17,839
Overall ADR 255 211 304 302
Rooms sold 35,359 23,974 118,347 104,610
Overall Revpar 131 97 205 200
Same Store Revpar ($) 103 97 200 197
Same Store Growth +6% +2%
Same Store
Local currency Revpar growth +8% +12%
EBITDA TOP REGIONAL
EARNING HOTELS (US$k)
Windsor Court
Copacabana 1,807 1,682
Cipriani
ORIENT-EXPRESS HOTELS LIMITED
NINE MONTHS ENDED SEPTEMBER 30th 2000
SUMMARY OF OPERATING RESULTS
(UNAUDITED)
Nine Months ended
September 30th
2000 1999
$000 $000
Revenue
Owned hotels 152,977 135,776
Hotel management interests 8,306 8,294
Restaurants 13,614 12,811
Total hotels & Restaurants 174,897 156,881
Trains & Cruises 31,280 27,774
Total revenue 206,177 184,655
EBITDA
Owned hotels (see attached) 51,027 45,652
Hotel management interests 8,296 8,290
Restaurants 3,027 3,025
Total hotels & Restaurants 62,350 56,967
Trains & Cruises 6,310 2,357
Central overheads (7,169) (6,835)
Total EBITDA 61,491 52,489
Depreciation & Amortisation (11,234) (10,135)
Earnings before Interest & Tax 50,257 42,354
Interest (18,110) (14,294)
Earnings before Tax 32,147 28,060
Tax (4,036) (3,728)
Net earnings before exceptional gain 28,111 24,332
Exceptional gain -- 1,300
Net earnings on common shares 28,111 25,632
Basic earnings per share (a) $1.05 $0.94
(a) Excluding the gain in 1999 on sale of Windermere Island Club.
Earnings per share comparisons with prior year are not meaningful in
view of the changes in equity and debt structure made before the
initial public offering.
ORIENT-EXPRESS HOTELS LIMITED
NINE MONTHS ENDED SEPTEMBER 30th, 2000
Owned Hotels - Analysis of Operating Results
Owned Hotels $000 EUROPE NORTH AMERICA
2000 1999 2000 1999
Revenue 65,569 64,987 48,747 43,887
EBITDA 24,553 24,391 14,554 12,976
Overall ADR 316 337 291 303
Rooms sold 131,680 122,289 96,950 91,284
Overall Revpar 247 250 220 228
Same Store Revpar ($) 247 250 208 184
Same Store Growth -2% +13%
Same Store
Local currency Revpar growth +12% +13%
EBITDA TOP REGIONAL
EARNING HOTELS (US$k)
Windsor Court 9,711 8,541
Copacabana
Cipriani 7,718 7,384
Owned Hotels $000 REST OF WORLD TOTAL
2000 1999 2000 1999
Revenue 38,661 26,902 152,977 135,776
EBITDA 11,920 8,285 51,027 45,652
Overall ADR 227 220 280 296
Rooms sold 110,639 77,688 339,269 291,261
Overall Revpar 128 108 193 194
Same Store Revpar ($) 122 108 190 182
Same Store Growth +13% +5%
Same Store
Local currency Revpar growth +17% +13%
EBITDA TOP REGIONAL
EARNING HOTELS (US$k)
Windsor Court
Copacabana 7,982 6,459
Cipriani
Orient-Express Hotels Ltd. and Subsidiaries
Consolidated and Condensed Balance Sheets (unaudited)
September 30, December 31,
2000 1999
(Dollars in thousands)
Assets
Cash $45,081 $11,143
Accounts receivable 44,942 41,002
Inventories 13,525 13,604
Total current assets 103,548 65,749
Real estate and other fixed assets,
net book value 540,430 499,307
Investments 64,667 63,493
Intangible assets 30,809 31,296
Other assets 2,349 2,021
$741,803 $661,866
Liabilities and Shareholders' Equity
Working capital facilities $4,162 $6,186
Account payable 12,478 12,775
Accrued liabilities 32,084 21,822
Deferred revenue 10,249 9,083
Current portion of long-term debt
and capital leases (a) 70,462 38,378
Total current liabilities 129,435 88,244
Long-term debt and obligations
under capital leases 230,629 271,562
Deferred income taxes 5,774 5,173
Minority interest 4,912 4,574
Shareholders' equity 371,053 292,313
$741,803 $661,866
(a) At September 30, 2000 current portion of long-term debt includes
$29,300,000 relating to mortgages on US properties repaid on
1st October making the assets available for refinancing.
SOURCE: Orient-Express Hotels Ltd.