Melia Hotels International SA (SMIZF) (FY 2024) Earnings Call Highlights: Strong Profit Growth ...
System-wide RevPAR: Increased by 10.7%, driven mainly by price increases.
Consolidated Revenues: EUR2,013 million, a year-on-year increase of 4.4%.
Management Fees: Increased by 12.9%.
Operating Expenses: Increased by 3%, with personal expenses up by 4.7%.
EBITDA (excluding capital gains): EUR533.6 million, surpassing the target of EUR525 million.
Yearly Margins: 26.5%, a 129 basis points improvement.
Net Financial Results: Worsened by EUR3.5 million, but financial costs reduced by EUR10.3 million.
Consolidated Net Profit: Increased by 24.5% to EUR162 million.
Net Profit of Parent Company: EUR140.6 million, an increase of 19.4%.
Earnings Per Share: EUR0.64.
Net Financial Debt Reduction: Reduced by approximately EUR400 million.
Asset Valuation: Total value increased by 13.8% to EUR5,285 million.
Hotel Openings: 19 hotels opened, adding 3,000 rooms.
New Projects Signed: 34 new hotels, adding more than 5,000 rooms to the pipeline.
Warning! GuruFocus has detected 6 Warning Sign with SMIZF.
Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Melia Hotels International SA (SMIZF) achieved a system-wide RevPAR increase of 10.7% in 2024, driven primarily by price increases.
The company surpassed its EBITDA target, reaching EUR533.6 million, exceeding the goal of EUR525 million.
Net financial debt was reduced by approximately EUR400 million, returning to pre-pandemic leverage ratios.
The company opened 19 hotels in 2024, adding 3,000 rooms, and signed 34 new hotels, adding over 5,000 rooms to the pipeline.
Melia Hotels International SA (SMIZF) plans to continue expanding in luxury segments and key vacation destinations, with a target to sign at least 25 new hotels and open 20 properties in 2025.
Operations in Cuba faced challenges due to power outages and adverse meteorological events, affecting demand.
The company's net financial results worsened by EUR3.5 million due to an impairment related to hotel operation rights in Cuba.
Political uncertainties in France and Germany caused instability, resulting in single-digit RevPAR growth in these regions.
The US Presidential election caused some price adjustments in the Americas to maintain market share.
China's market remains mainly domestic-driven with a slower recovery in international influx, impacting performance.
Q: With the debt coming down nicely, are there any plans to reduce it further, possibly through raising capital? Also, any thoughts on reducing the family's shareholding? Lastly, you mentioned opening 20 hotels in 2025; does this include any delayed projects from 2024? A: Angel Luis Rodriguez Mendizabal, CFO: We have no plans for a capital increase as we are comfortable with our current debt level, aiming to maintain a leverage ratio between 2 and 2.5 times. Gabriel Juan Escarrer Jaume, CEO: The family has no intention of reducing its stake; in fact, I have been buying shares. Andre Philippe Gerondeau, COO: Delays in openings are typical, but we expect a 4% net unit growth in 2025, which includes any carryover from 2024.
Q: Could you provide more details on performance expectations for the Caribbean, particularly Mexico, and any cash flow or asset rotation plans for this year? A: Andre Philippe Gerondeau, COO: Despite a slight slowdown due to U.S. political events, demand in Mexico remains strong, especially in the MICE segment. The Dominican Republic is performing well with increased demand. Angel Luis Rodriguez Mendizabal, CFO: We expect stronger cash flow generation in 2025 compared to 2024, with no major asset disposals planned in the short term. Juan Ignacio Pardo Garcia, Chief Real Estate and Sustainability Officer: We are focusing on repositioning strategic assets in the Caribbean, like Paradisus Cancun.
Q: Regarding RevPAR evolution, are you being conservative with your mid-single digit growth guidance for 2025? Also, what is the CapEx guidance for the year? A: Andre Philippe Gerondeau, COO: We see market stabilization in prices and volume, and our guidance reflects realistic expectations. Spain had a strong year, and we anticipate growth at twice the inflation rate. Angel Luis Rodriguez Mendizabal, CFO: Maintenance, risk, and IT CapEx is expected to be around EUR60 million, with significant investment in Paradisus Cancun.
Q: You plan to open 20 new hotels in 2025. Is this a net or gross number, and what level of OpEx inflation do you expect? A: Andre Philippe Gerondeau, COO: We plan to open 20 properties, resulting in a net unit growth of about 4,000 rooms. Stephane Baos, Head of Investor Relations: We expect OpEx inflation to be between 3% to 4% for 2025.
Q: Are you planning to close any hotels or rooms this year, particularly with the development of Paradisus Cancun? A: Andre Philippe Gerondeau, COO: Yes, Paradisus Cancun will be closed at the end of the winter season for refurbishment, affecting about 700 units.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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