Belmond Results

Belmond Ltd. Reports Third Quarter 2018 Results

Reaffirms Full-Year 2018 Adjusted EBITDA Guidance

Belmond

Belmond Ltd. (NYSE:BEL), owners, part-owners or managers of 46 luxury hotel, restaurant, train and river cruise properties, which operate in 24 countries, today announced its results for the third quarter ended September 30, 2018.

Roeland Vos, president and chief executive officer, remarked: "Belmond delivered significant growth in the third quarter of 2018. In what is seasonally the largest quarter in terms of EBITDA contribution, we are pleased to have recorded a 21% rise in adjusted EBITDA versus the prior-year period.

With improved commercial management capabilities in place, and a program of identified strategic capital reinvestments that began in 2016 now yielding benefits, we came in at the top end of the RevPAR guidance range we set out in May, supporting our full-year guidance for same store RevPAR growth of between 2% and 6%. We are also reaffirming our full-year adjusted EBITDA guidance of $140 to $150 million, representing growth of 13% to 21% over last year.

As momentum continues to build, we are increasingly confident in the tools that are powering our revenue-driving strategies. The team remains focused on capitalizing on the strong financial position we have established. We expect the positive growth trajectory we have witnessed across successive quarters this year to continue through 2019 and beyond."

Third Quarter 2018 Operating Results

Revenue for the third quarter of 2018 was $193.2 million, a $10.2 million increase in revenue from the third quarter of 2017. In constant currency, revenue for the third quarter of 2018 increased by $10.6 million from the third quarter of 2017 due to strong performances at Venice Simplon-Orient-Express, which continues to benefit from recent capital improvements; Belmond Grand Hotel Europe, St. Petersburg, Russia, where the football World Cup was hosted in July; Belmond Charleston Place, South Carolina, which is benefiting from the popularity of the destination and the extensive refurbishment work completed in recent years; Belmond Hotel das Cataratas, Iguassu Falls, Brazil where the destination has received positive media coverage; and across Belmond's Italian portfolio due to enhanced revenue management initiatives and the impact of recent capital investments, including the addition of new keys. Additionally, the introduction this year of Belmond Castello di Casole in Tuscany represented a positive contribution. These increases are offset by declines at Belmond La Samanna, St. Martin, French West Indies, and Belmond Cap Juluca, Anguilla, British West Indies, which were both closed for renovation works in the third quarter of 2018 and Belmond Northern Belle, which was sold in the fourth quarter of 2017. Together these three businesses contributed revenue of $6.2 million in the third quarter of 2017. Excluding the impact of the closed and sold properties and the acquisition of Belmond Castello di Casole, revenue across the rest of the portfolio increased by $12.8 million or 7% over the third quarter of 2017 on a constant currency basis.

Net earnings attributable to Belmond Ltd. for the third quarter of 2018 were $12.6 million ($0.12 per common share), which compared to net earnings attributable to Belmond Ltd. of $7.8 million ($0.08 per common share) for the third quarter of 2017, largely due to a 21% improvement in adjusted EBITDA.

Adjusted net earnings from continuing operations for the third quarter of 2018 were $35.5 million ($0.34 per common share), compared to adjusted net earnings from continuing operations of $15.5 million ($0.15 per common share) for the third quarter of 2017.

Same store RevPAR for owned hotels for the third quarter of 2018 increased 6% from the prior-year quarter on both a constant currency and US dollar basis as a result of a one percentage point increase in occupancy and a 5% increase in average daily rate ("ADR").

Adjusted EBITDA for the third quarter of 2018 was $75.1 million up 21%, compared to an adjusted EBITDA of $62.2 million for the third quarter of 2017. In constant currency, adjusted EBITDA for the third quarter of 2018 was up $10.0 million or 15% compared to the third quarter of 2017.

Recent Company Highlights

  • Announces review of strategic alternatives to enhance shareholder value - On August 8, 2018, the Company announced that its Board of Directors has initiated a comprehensive review of strategic alternatives to enhance shareholder value. The Board has engaged Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC as financial advisors and Weil, Gotshal & Manges LLP as legal advisor to assist in its review. Belmond is pleased with the progress of the review process that is now underway but no assurances can be given regarding its outcome or timing.
  • Celebrates milestone anniversaries at iconic properties - In July 2018, Belmond El Encanto in Santa Barbara, California, marked a century since it began operating as a hotel. Today, the property is the only Forbes 5-star hotel in the city and is hosting a series of special wine-maker dinners throughout 2018 to honor its 100-year history. On August 13, 2018, Belmond Copacabana Palace celebrated 95 years since it opened its doors. 2018 also marks the 60th year since our other Brazilian hotel, Belmond Hotel das Cataratas, with its breath-taking setting as the sole hotel on the Brazilian side of the national park overlooking the world famous Iguassu Falls, opened as a hotel, following the Belmond Hotel Cipriani, Venice, Italy, which reached this 60-year milestone anniversary in May.
  • Unveils latest global brand campaign to capitalise on growth in ‘culinary tourism’ - In September 2018, Belmond launched ‘The Art of Gastronomy’ celebrating culinary tradition and food of provenance across its portfolio of destinations in a series of six short films, each capturing a gastronomic journey that guests can experience as part of the Company’s commitment to delivering authentic escapes, and as demand for authentic food-inspired travel increases. The campaign content went live across Belmond’s marketing channels worldwide with each experience available to book online via Belmond.com.

Third Quarter 2018 Business Unit Results

Owned hotels:

Europe:

For the third quarter of 2018, revenue from owned hotels for the region was $109.4 million, an increase of $12.7 million or 13% from $96.7 million for the third quarter of 2017. In constant currency, revenue for the region for the third quarter of 2018 increased $10.0 million or 10% from the prior year quarter due to growth across the majority of the portfolio led by double digit percentage growth at Belmond Grand Hotel Europe, Belmond Hotel Caruso and Belmond Grand Hotel Timeo. Belmond Grand Hotel Europe benefited from the positive image of the football World Cup held in Russia in July and all of the properties have benefited from enhanced revenue management strategies including improved management of room types, targeted sales activities and focus on driving group business to shoulder seasons. The growth included revenue of $4.0 million at Belmond Castello di Casole, which was acquired in the first quarter of 2018, and was opened under a Belmond flag in May.

In constant currency, same store RevPAR for owned hotels in the region increased 7% from the prior-year quarter as a result of a 7% increase in ADR.

Adjusted EBITDA for the region for the quarter was $54.8 million, up 13% compared to $48.7 million for the third quarter of 2017. In constant currency, adjusted EBITDA for the region for the third quarter of 2018 increased $3.8 million or 7% from the prior year quarter driven by Belmond Grand Hotel Europe and all of the Italian properties with the exception of Belmond Hotel Cipriani, which is in a non-Biennale year.

North America:

Revenue from owned hotels for the third quarter of 2018 was $27.6 million, down $5.3 million or 16% from $32.9 million for the third quarter of 2017. In constant currency, revenue for the region for the third quarter of 2018 also decreased $5.4 million from the prior-year quarter. The decrease is attributable to a $4.2 million fall in revenue at Belmond La Samanna and Belmond Cap Juluca, which were both closed for the entire quarter following damage sustained from the 2017 hurricanes that hit the region. Revenue from Belmond Charleston Place was flat year-over-year but would have been higher had it not been for the impact of $2.1 million lost revenue at Belmond Charleston Place as the city was evacuated with the approach of Hurricane Florence in September.

In constant currency, same store RevPAR for owned hotels in the region decreased 2% from the prior-year quarter due to a two percentage point decrease in occupancy.

Adjusted EBITDA for the region for the quarter was $5.1 million, an increase of $2.8 million or 122% from $2.3 million for the third quarter of 2017. In constant currency, adjusted EBITDA for the region for the third quarter of 2018 also increased $2.9 million due to improvements of $1.1 million at Belmond Charleston Place and losses of $2.7 million in the prior-year quarter at Belmond La Samanna and Belmond Cap Juluca. Operating losses of $2.7 million at Belmond La Samanna and $1.7 million at Belmond Cap Juluca have been added back to adjusted EBITDA for the third quarter of 2018 while the properties are closed for renovation. Also added back to adjusted EBITDA in the third quarter of 2018 is a $1.2 million deductible related to the insurance cover at Belmond Charleston Place.

Rest of world:

Revenue from owned hotels for the third quarter of 2018 was $25.8 million, a decrease of $1.0 million or 4% from $26.8 million for the third quarter of 2017. In constant currency, revenue for the third quarter of 2018 increased $2.6 million or 10% from the prior year quarter, principally as a result of a $1.7 million increase in revenue at Belmond Hotel das Cataratas following positive media coverage of the destination, and $0.7 million increases at both Belmond Copacabana Palace and Belmond Mount Nelson.

In constant currency, same store RevPAR for owned hotels in the region increased 10% from the prior-year quarter as a result of a four percentage point increase in occupancy and a 1% increase in ADR.

Adjusted EBITDA for the region for the quarter was $3.9 million compared to $3.5 million for the prior-year quarter. In constant currency, adjusted EBITDA for the region increased by $0.7 million or 20% from the prior-year quarter as a result of a $0.8 million increase at Belmond Hotel das Cataratas.

Owned trains & cruises:

Revenue for the third quarter of 2018 was $26.4 million, up $2.7 million or 11% from $23.7 million for the third quarter of 2017. In constant currency, revenue increased $2.1 million or 8%. Excluding Belmond Northern Belle that was sold last year, revenue was up $4.2 million or 18% over the third quarter of 2017. The increase was driven by Venice Simplon-Orient-Express which has continued a strong year as it benefits from recent capital improvements, and to a lesser extent from Belmond Afloat in France where two new barges were brought into operation earlier this year.

Adjusted EBITDA for the quarter was $8.3 million, an increase of $2.9 million or 54% from the third quarter of 2017. In constant currency, adjusted EBITDA for the segment increased by $2.7 million or 46% primarily driven by growth from the Venice Simplon-Orient-Express, Belmond Afloat in France and the cessation of the Company's loss making Orcaella cruise lease in Myanmar during the prior year.

Management fees:

Adjusted EBITDA from management fees for the third quarter of 2018 was $4.6 million, a decrease of $0.1 million or 2% from $4.7 million for the third quarter of 2017.

Share of pre-tax earnings from unconsolidated companies:

Adjusted share of pre-tax earnings from unconsolidated companies for the third quarter of 2018 was $6.6 million, an increase of $0.6 million compared to $6.0 million for the third quarter of 2017 due to an increase in passenger numbers at the Company's PeruRail joint venture.

Central overheads:

For the third quarter of 2018, adjusted central overheads of $6.9 million were $0.1 million lower than adjusted central overheads of $7.0 million in the prior-year quarter.

Investments

During the third quarter of 2018, the Company invested a total of $43.0 million in its portfolio, including $29.2 million on the refurbishment of Belmond Cap Juluca; $2.9 million on the refurbishment of Belmond La Samanna; $1.2 million on the full refurbishment of Belmond Savute Elephant Lodge, Chobe Reserve, Botswana; $1.2 million at Belmond Afloat in France for the addition of two new barges; and $0.7 million for the refurbishment of '21' Club following water damage from burst pipes earlier in the year.

Balance Sheet

At September 30, 2018, the Company had total debt of $746.5 million and cash balances of $150.3 million, resulting in net debt of $596.2 million and a ratio of net debt to trailing-twelve-month adjusted EBITDA of 4.2 times. This compared to net debt of $615.2 million and a ratio of net debt to trailing-twelve-month adjusted EBITDA of 4.8 times at June 30, 2018.

Outlook

The Company is providing the following guidance for the fourth quarter and full year 2018:

 

Fourth Quarter 2018

 

     Full Year 2018     

 
Same store worldwide owned hotel RevPAR growth guidance (1)
 
On a constant currency basis 3% - 7% 2% - 6%
In U.S. dollars (4)% - 0% 2% - 6%
 
Statement of operations guidance ($ millions)
(Losses)/earnings from continuing operations (2) ($37.0) - $0.0
Adjusted EBITDA (3) $140.0 - $150.0
 
Depreciation and amortization (4) $15.2 - $16.2 $60.8 - $61.8
Interest expense $8.1 - $9.1 $32.3 - $33.3
Tax expense (5) $2.1 - $3.1 $12.6 - $14.6
 
Cash flow guidance ($ millions)
 
Cash interest expense $8.0 - $9.0 $32.2 - $33.2
Cash tax expense (6) $7.4 - $8.4 $16.5 - $17.5
Scheduled loan repayments $1.3 - $1.7 $5.7 - $6.7
 

The Company’s guidance as provided above is based on its current expectations, beliefs and assumptions regarding future developments, and is subject to a number of uncertainties and risks outside the Company’s control that could cause the Company’s guidance to change. Accordingly, there can be no assurance that the Company will achieve these results

(1) Projected same store RevPAR growth for the fourth quarter and full year ending December 31, 2018 excludes the operations of Belmond Castello di Casole, which was acquired in February 2018, Belmond Cap Juluca, which was acquired in May 2017, Belmond La Samanna, which is closed for refurbishment following Hurricanes Jose and Irma in September 2017 and Belmond Savute Elephant Lodge, Chobe Reserve, Botswana which was closed for refurbishment from November 2017 to June 2018.
(2) (Losses)/earnings from continuing operations includes the unadjusted impact of one-off items including the cost to terminate a right of first refusal and purchase option and costs associated with the strategic review.
(3) The Company's policy is to provide adjusted EBITDA guidance solely on a full year basis.
(4) Projected depreciation and amortization expense for the fourth quarter and full year ending December 31, 2018 includes forecast accelerated depreciation related to expected renovations at the Company's properties.
(5) Tax expense guidance includes the Company's share of provision for income taxes of unconsolidated companies.
(6) Cash tax expense guidance does not include the Company's share of provision for income taxes of unconsolidated companies.
 

BELMOND LTD.

EARNINGS RELEASE SCHEDULES

TABLE OF CONTENTS

       

Statements of Condensed Consolidated Operations

8

Segment Information - Revenue and Adjusted EBITDA 9
Summary of Operating Information for Owned Hotels 10
Condensed Consolidated Balance Sheets 11
Reconciliations - Adjusted EBITDA and Outlook Adjusted EBITDA 12
Reconciliations - Adjusted Net Earnings / (Losses) and Adjusted Share of Pre-Tax Earnings from Unconsolidated Companies 13
Net Debt to Adjusted EBITDA 14
 

BELMOND LTD.

STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS

(Unaudited)

                 
$ millions – except per share amounts  

Three months ended

September 30,

 

Nine months ended

September 30,

2018   2017 2018   2017
 
Revenue 193.2 183.0 454.5 443.7
 
Expenses:
Cost of services 80.1 72.0 201.5 184.8
Selling, general and administrative 67.5 59.4 193.4 184.2
Depreciation and amortization 15.0 17.0 45.6 46.0
Impairment of goodwill 2.2
Impairment of property, plant and equipment and other assets 4.9 8.2
       
Total operating costs and expenses 162.6 148.4 447.6 423.2
 
Gain on disposal of property, plant and equipment 0.2 0.2 0.5 0.5
Other operating income 1.2     14.2    
 
Earnings from operations 32.0 34.8 21.6 21.0
 
Interest income 0.2 0.2 0.8 0.6
Interest expense (8.4 ) (9.0 ) (24.9 ) (24.5 )
Foreign currency, net (0.7 ) (1.5 ) (4.3 ) (2.7 )
       
Earnings/(losses) before income taxes and earnings from unconsolidated companies, net of tax 23.1 24.5 (6.8 ) (5.6 )
 
Provision for income taxes (14.5 ) (20.7 ) (5.9 ) (17.6 )
       
Earnings/(losses) before earnings from unconsolidated companies, net of tax 8.6 3.8 (12.7 ) (23.2 )
 
Earnings from unconsolidated companies, net of tax provision of $2.4, $2.0, $5.1 and $4.1 4.0 3.9 8.8 7.8
       
Earnings/(losses) from continuing operations 12.6 7.7 (3.9 ) (15.4 )
 
Net earnings from discontinued operations, net of tax provision of $Nil, $Nil, $Nil and $Nil 0.1
       
Net earnings/(losses) 12.6 7.7 (3.9 ) (15.3 )
 
Net losses attributable to non-controlling interests 0.1
       
Net earnings/(losses) attributable to Belmond Ltd. 12.6   7.8   (3.9 ) (15.3 )
 
EPS attributable to Belmond Ltd. 0.12 0.08 (0.04 ) (0.15 )
Weighted average number of shares – millions   102.96     102.33     102.72     102.11  
 

BELMOND LTD.

SEGMENT INFORMATION

(Unaudited)

                 
$ millions  

Three months ended

September 30,

 

Nine months ended

September 30,

2018   2017 2018   2017
 
Revenue
 
Owned hotels
- Europe 109.4 96.7 210.0 180.8
- North America 27.6 32.9 91.0 115.2
- Rest of world 25.8   26.8   85.5   88.6  
Total owned hotels 162.8 156.4 386.5 384.6
Owned trains & cruises 26.4 23.7 57.9 50.6
Management fees 4.0 2.9 10.1 8.5
       
Revenue 193.2 183.0 454.5 443.7
 
Adjusted EBITDA
 
Owned hotels
- Europe 54.8 48.7 79.9 71.5
- North America 5.1 2.3 25.2 21.8
- Rest of world 3.9   3.5   14.3   15.9  
Total owned hotels 63.8 54.5 119.4 109.2
Owned trains & cruises 8.3 5.4 11.5 5.3
Management fees 4.6 4.7 11.7 11.5
Share of pre-tax earnings from unconsolidated companies 6.6   6.0   14.1   11.9  
83.3 70.6 156.7 137.9
 
Central overheads (6.9 ) (7.0 ) (23.0 ) (21.7 )
Share-based compensation (1.6 ) (1.5 ) (4.9 ) (5.0 )
Central marketing costs 0.3 0.1 (4.5 ) (3.2 )
       
Adjusted EBITDA   75.1     62.2     124.3     108.0  
 

BELMOND LTD.

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                 
 

Three months ended

September 30,

 

Nine months ended

September 30,

2018   2017 2018   2017
 
Room Nights Available
Europe 90,895 86,817 224,516 214,135
North America 57,531 66,872 170,837 198,270
Rest of world 94,392   94,392   278,286   280,818  
Worldwide 242,818 248,081 673,639 693,223
 
Room Nights Sold
Europe 70,334 66,974 148,749 143,262
North America 37,302 43,210 119,137 134,914
Rest of world 47,360   43,767   146,755   144,944  
Worldwide 154,996 153,951 414,641 423,120
 
Occupancy
Europe 77 % 77 % 66 % 67 %
North America 65 % 65 % 70 % 68 %
Rest of world 50 % 46 % 53 % 52 %
Worldwide 64 % 62 % 62 % 61 %
 
ADR (in U.S. dollars)
Europe 1018 928 887 791
North America 368 383 410 432
Rest of world 335 376 360 378
Worldwide 653 618 563 535
 
RevPAR (in U.S. dollars)
Europe 788 716 588 529
North America 239 248 286 294
Rest of world 168 174 190 195
Worldwide 417 383 347 327
 
Same Store RevPAR (in U.S. dollars) (1)
Europe 793 716 589 529
North America 239 245 286 276
Rest of world 168 174 188 194
Worldwide 413 388 344 323
 
Same Store RevPAR (% change)

U.S.

dollar

Constant

currency

U.S.

dollar

Constant

currency

Europe 11 % 7 % 11 % 5 %
North America (2 )% (2 )% 4 % 4 %
Rest of world (3 )% 10 % (3 )% 2 %
Worldwide   6 %   6 %   7 %   4 %
 
(1) Same store RevPAR data for the three and nine months ending September 30, 2018 and September 30, 2017 excludes the operations of Belmond Castello di Casole, which was acquired in February 2018, Belmond Cap Juluca, which was acquired in May 2017, Belmond La Samanna, which is closed for refurbishment following Hurricanes Jose and Irma in September 2017 and Belmond Savute Elephant Lodge which was closed for refurbishment from November 2017 to June 2018.
 

BELMOND LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

         
$ millions   September 30,   December 31,
2018 2017
 
Assets
Cash 145.5 180.2
Restricted cash 3.9 3.1
Accounts receivable 53.5 34.4
Due from unconsolidated companies 15.0 12.8
Prepaid expenses and other 14.5 13.3
Inventories 21.8 23.1
   
Total current assets 254.2 266.8
 
Property, plant & equipment, net of accumulated depreciation 1,246.2 1,168.0
Investments in unconsolidated companies 68.8 64.6
Goodwill 114.7 120.2
Other intangible assets 20.6 19.8
Other assets 17.2 14.1
   
Total assets (1) 1,721.7 1,653.6
 
Liabilities and Equity
Accounts payable 26.0 15.8
Accrued liabilities 111.1 79.5
Deferred revenue 50.8 32.8
Current portion of long-term debt and capital leases 6.4 6.4
   
Total current liabilities 194.3 134.5
 
Long-term debt and obligations under capital leases 740.1 700.8
Liability for pension benefit 0.1 0.7
Other liabilities 3.0 3.0
Deferred income taxes 108.9 115.4
Liability for uncertain tax positions 0.6 0.5
   
Total liabilities (2) 1,047.0 954.8
 
Shareholders’ equity 674.1 698.5
Non-controlling interests 0.6 0.3
Total equity 674.7 698.8
   
Total liabilities and equity   1,721.7   1,653.6
 
(1) Balance at September 30, 2018 includes $202.0 million (December 31, 2017 - $206.3 million) of assets of consolidated variable interest entities ("VIEs") that can only be used to settle obligations of the VIEs.
(2) Balance at September 30, 2018 includes $168.2 million (December 31, 2017 - $123.0 million) of liabilities of consolidated VIEs whose creditors have no recourse to Belmond Ltd.
 

BELMOND LTD.

RECONCILIATIONS - ADJUSTED EBITDA AND OUTLOOK ADJUSTED EBITDA

(Unaudited)

                 
$ millions

Three months ended

September 30,

 

Nine months ended

September 30,

2018   2017 2018   2017
 
Adjusted EBITDA reconciliation:
 
Earnings/(losses) from continuing operations 12.6 7.7 (3.9) (15.4)
Depreciation and amortization 15.0 17.0 45.6 46.0
Interest income (0.2) (0.2) (0.8) (0.6)
Interest expense 8.4 9.0 24.9 24.5
Foreign currency, net 0.7 1.5 4.3 2.7
Provision for income taxes 14.5 20.7 5.9 17.6
Share of provision for income taxes of unconsolidated companies 2.4 2.1 5.1 4.1
53.4 57.8 81.1 78.9
 
Insurance gains and deductibles 1.2 (10.0)
Labor restructuring cost 14.9
Net operating losses at two closed Caribbean properties 4.4 2.0 11.4 2.0
Cost to terminate right of first refusal and purchase option 13.1 13.1
Strategic review costs 2.4 2.4
Other restructuring and special items (1) 0.5 2.3 3.7 5.3
Acquisition-related costs (2) 0.1 0.3 0.9 14.1
Gain on disposal of property, plant and equipment (0.2) (0.2) (0.5) (0.5)
Loss on disposal of property, plant and equipment in unconsolidated joint venture 0.2 0.2
Impairment of goodwill, property, plant and equipment and other assets 7.1 8.2
       
Adjusted EBITDA   75.1   62.2   124.3   108.0
 
(1) Represents costs in relation to restructuring, severance and redundancy costs, pre-opening costs, and other items, net.
(2) Represents acquisition fees in relation to the purchase of Castello di Casole in February 2018 and Cap Juluca in May 2017.
                 
$ millions    

Twelve months ending

December 31, 2018

    Low case   High case
 
Reconciliation of outlook adjusted EBITDA:
 
(Losses)/earnings from continuing operations (37.0) 0.0
Depreciation and amortization 61.8 60.8
Net interest expense 33.3 32.3
Foreign currency, net 4.3 4.3
Provision for income taxes 7.6 8.6
Share of provision for income taxes of unconsolidated companies 5.0 6.0
75.0 112.0
Insurance gains and deductibles (10.0) (10.0
Labor restructuring cost 16.0 15.0
Net operating losses at two closed Caribbean properties 19.0 17.0
Cost to terminate right of first refusal and purchase option 25.0 3.0
Strategic review costs 4.5 3.5
Other restructuring and special items 4.0 3.0
Gain on disposal of property, plant and equipment (0.6) (0.6
Impairment of goodwill, property, plant and equipment and other assets 7.1 7.1
   
Adjusted EBITDA           140.0   150.0
 

BELMOND LTD.

RECONCILIATIONS - ADJUSTED NET EARNINGS / (LOSSES) AND ADJUSTED SHARE OF PRE-TAX

EARNINGS FROM UNCONSOLIDATED COMPANIES

(Unaudited)

                 
$ millions – except per share amounts  

Three months ended

September 30,

 

Nine months ended

September 30,

2018   2017 2018   2017
 
Adjusted net earnings reconciliation:
 
Earnings/(losses) from continuing operations 12.6 7.7 (3.9) (15.4)
Insurance gains and deductibles 1.2 (10.0)
Labor restructuring cost 14.9
Net operating losses at two closed Caribbean properties 4.4 2.0 11.4 2.0
Cost to terminate right of first refusal and purchase option 13.1 13.1
Strategic review costs 2.4 2.4
Other restructuring and special items (1) 0.5 2.3 3.7 5.3
Acquisition-related costs (2) 0.1 0.3 0.9 14.1
Gain on disposal of property, plant and equipment (0.2) (0.2) (0.5) (0.5)
Loss on disposal of property, plant and equipment in unconsolidated joint venture 0.2 0.2
Impairment of goodwill, property, plant and equipment and other assets 7.1 8.2
Accelerated depreciation 1.0 1.8 3.2 1.8
Interest adjustments 0.6 0.6
Foreign currency, net (3) 0.7 1.4 4.3 2.8
Tax-related adjustments (8.1)
Income tax effect of adjusting items (4) (0.5) (0.4) (2.0) (0.4)
       
Adjusted net earnings from continuing operations 35.5 15.5 36.7 18.5
 
EPS from continuing operations 0.12 0.08 (0.04) (0.15)
Adjusted EPS from continuing operations 0.34 0.15 0.36 0.18
Weighted average number of shares (millions)   102.96   102.33   102.72   102.11
(1) Represents costs in relation to restructuring, severance and redundancy costs, pre-opening costs, and other items, net.
(2) Represents acquisition fees in relation to the purchase of Castello di Casole in February 2018 and Cap Juluca in May 2017.
(3) Non-cash item arising from the translation of certain assets and liabilities denominated in currencies other than the functional currency of the respective entity.
(4) Represents income tax effect of adjusting items by applying the applicable statutory tax rate to the adjusting items.
 
                 
$ millions  

Three months ended

September 30,

 

Nine months ended

September 30,

2018   2017 2018   2017
 
Adjusted share of pre-tax earnings from unconsolidated companies reconciliation:
 
Earnings from unconsolidated companies (1) 4.0 3.9 8.8 7.8
Share of provision for income taxes of unconsolidated companies 2.4 2.1 5.1 4.1
Loss on disposal of property, plant and equipment in unconsolidated joint venture 0.2 0.2
 
Adjusted share of pre-tax earnings from unconsolidated companies   6.6   6.0   14.1   11.9
 
(1) Represents the Company's share of earnings from unconsolidated companies.
 

BELMOND LTD.

NET DEBT TO ADJUSTED EBITDA

(Unaudited)

         
$ millions - except ratios   Twelve months ended and as at

September 30,

2018

 

December 31,

2017

 
Cash
Cash and cash equivalents 145.5 180.2

Restricted cash (including $0.9 million and $0.8 million classified within long-term other

assets on the balance sheet for 2018 and 2017, respectively)

4.8 3.9
   
Total cash 150.3 184.1
 
Total debt
Current portion of long-term debt and capital leases 6.4 6.4
Long-term debt and obligations under capital leases (1) 740.1 700.8
   
Total debt 746.5 707.2
 
Net debt 596.2   523.1
 
Adjusted EBITDA 140.3 124.0
 
Net debt / adjusted EBITDA   4.2   4.2
 

(1) Long-term debt is after the deduction of unamortized debt issuance costs and discount on secured term loans.

 
$ millions  

For the twelve months ended

September 30, 2018

 
Trailing twelve months adjusted EBITDA calculation:
 
Adjusted EBITDA for the twelve months ended December 31, 2017 (1) 124.0
Less: Adjusted EBITDA for the nine months ended September 30, 2017 (108.0)
Plus: Adjusted EBITDA for the nine months ended September 30, 2018 124.3
 
Adjusted EBITDA for the trailing twelve months     140.3
 
(1) As disclosed in the Company's 2017 earnings news release issued on February 26, 2018.
 

About Belmond Ltd.

Belmond is a global collection of exceptional hotel and luxury travel adventures in some of the world’s most inspiring and enriching destinations. Established over 40 years ago with the acquisition of Belmond Hotel Cipriani in Venice, its unique and distinctive portfolio now embraces 46 hotel, rail and river cruise experiences, excluding one scheduled for an early 2019 opening in London, in many of the world’s most celebrated destinations. From city landmarks to intimate resorts, the collection includes Belmond Grand Hotel Europe, St. Petersburg; Belmond Copacabana Palace, Rio de Janeiro; Belmond Maroma Resort & Spa, Riviera Maya; and Belmond El Encanto, Santa Barbara. Belmond also encompasses safaris, seven luxury tourist trains, including the Venice Simplon-Orient-Express, and two river cruises. Belmond also operates ‘21’ Club, one of New York’s most storied restaurants.



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