Accor Profit Beats Estimates After Company Reduced CostsDalia Fahmy
Accor SA, Europe’s largest hotel operator, said first-half profit rose 15 percent as the French company cut costs and benefited from strong demand in the Mediterranean region, Africa and the Americas.
Earnings before interest and taxes climbed to 219 million euros ($289 million) from a restated 191 million euros a year earlier, the Paris-based owner of the Sofitel and Ibis brands said in a statement today. That beat the average estimate of 209.8 million euros from 10 analysts in a Bloomberg survey. The company forecast full-year EBIT of 575 million euros to 595 million euros.
“In the second half we will focus in particular on deploying the HotelServices strategy built around innovation, digital solutions and brands,” Chairman and Chief Executive Officer Sebastien Bazin said in the statement.
Accor in November scrapped a plan to sell properties and expand through operating more hotels, focusing instead on owning the hotels it runs. The strategic change was Accor’s first since Bazin took office a year ago after the company fired his predecessor.
Accor reported net income of 60 million euros, up from a restated 34 million euros a year earlier. Revenue fell 1.8 percent to 2.59 billion euros.
In a separate statement today, the company said it agreed to buy 13 U.K. hotels with the Ibis brand from Haywards Heath, England-based private equity firm Tritax Assets LLP for about 89 million euros. The hotels have a total of 1,194 rooms.
Accor’s plan this year is to continue to become more profitable by cutting costs and running its hotel investing and operating units separately, Bazin said in February.
In February, Accor said it lowered its costs by 37 million euros in 2013, exceeding its target of 30 million euros, and that it plans an additional reduction of 63 million euros in 2014.
Cost cuts helped boost the margin on earnings before interest, taxes, depreciation, amortization and rental costs by 0.3 percentage points to 31.1 percent, the company said today.