ACCOR, EUROPE’S largest hotel operator, will accelerate an expansion plan after the French company reported first-half profit that beat analysts’ estimates.
Earnings before interest and taxes rose to €212 million from a restated €204 million a year earlier, the Paris-based company said yesterday in a statement, ahead of analyst forecasts.
The year-earlier figure was changed to reflect the sale of Accor’s Motel 6 budget chain to Blackstone Group.
Accor forecast full-year earnings before interest and taxes will be from €510 million to €530 million. That compares with €515 million in 2011.
Accor’s sale of Motel 6 is scheduled for completion in October as chief executive Denis Hennequin expands operations in Latin America and the Asia-Pacific region.
Earnings gained from a combination of revenue growth and higher margins as Mr Hennequin scales back the company’s ownership of the hotels that it operates.
Revenue advanced 3.6 per cent to €2.72 billion, excluding acquisitions and disposals, rising fastest in Latin America. Accor agreed last month to acquire Grupo Posadas for $275 million to boost its presence in Brazil.
“These were a good set of results and in line with expectations,” said Catherine Rolland, an analyst at Kepler Capital Markets who has a buy rating on the shares.
Accor fell in Paris trading today after a “good performance since the start of the year” – rising 35 per cent in that time while the CAC 40 Index gained 8.6 per cent.
“These results reflect a strong growth in performance,” Mr Hennequin said on a conference call.
By the end of 2016, 80 per cent of Accor’s hotels will be franchised or under management contracts from 56 per cent now, he said. The company expects to add 108,700 rooms by then.
Mr Hennequin, who joined from McDonald’s last year, is expanding Accor’s global presence by running operations under its Sofitel, Novotel and Ibis brands.
It has sold buildings and leased them back, allowing Accor to pay debt and avoid tying up capital in property. Management and franchise fees rose 20 per cent in the first half, the company reported in July. – (Bloomberg)
