Accor Profit Rises as Hotel Company Announces Expansion PlanAndrew Blackman
Accor SA, Europe’s largest hotel operator, said annual profit increased 2 percent and announced a plan to widen its margins and cut costs.
Earnings before interest and taxes rose to 526 million euros ($706 million) from 515 million euros a year earlier, the Paris-based company said today in a statement. Analysts expected profit of 527 million euros, the average of 17 estimates in a Bloomberg survey. The year-earlier figure was changed to reflect the sale of Accor’s Motel 6 budget chain to Blackstone Group LP.
In August, Accor forecast full-year earnings before interest and taxes of 510 million euros to 530 million euros. The company said today it will restructure 800 hotels as part of a plan to scale back the number of properties it owns. That will reduce revenue by 2 billion euros and cut Accor’s adjusted net debt by the same amount.
Accor reported a net loss of 599 million euros for 2012 compared with a restated profit of 27 million a year earlier as it booked higher losses from discontinued operations. Revenue rose 1.5 percent to 5.65 billion euros.
Accor was down 1.05 euros, or 3.6 percent, at the 5:30 p.m. close of trading in Paris, the biggest drop since June 11. The shares have declined about 5.9 percent in the past 12 months, reducing the company’s market value to 6.4 billion euros.
The company plans to open 30,000 rooms a year through 2016, according to today’s statement. At the end of that period, Accor will operate 40 percent of its rooms under franchise agreements, and 40 percent under management contracts. The company will own or lease 20 percent of the rooms.
Over the same period, Accor aims to raise its consolidated operating margin to more than 15 percent, the company said, without giving a figure for 2012.
Accor opened more than 38,000 rooms last year, 85 percent of which were under management or franchise agreements.