SAO PAULO, March 24, 2011 /PRNewswire/ -- BHG S.A. – Brazil Hospitality Group has announced the results of its activities for the fourth quarter and the year 2010. Net Operating Revenues (NOR) reached R$ 123.7 million in 2010, with a growth of 60.8% in relation to 2009. In 4Q10, NOR reached R$ 37.2 million, with a growth of 74.5% over 4Q09. This impressive increase in BHG's earnings is the result of the Company's strong growth strategy based on the acquisition and management of hotels, and the adoption of an aggressive commercial policy with a sustainable increase of RevPar and a focus on corporate clients.
The Hotel EBITDA is the highest ever achieved by the Company and came to R$ 34.8 million in 2010, representing a growth of 80.3% in relation to that for 2009. Hotel EBITDA margin in 2010 stood at 28.2%, which amounts to 3.1 percentage points above the margin of 25.1% obtained in 2009. This significant increase of Hotel EBITDA margin is the result of cost control actions, seeking out synergies and economies of scale with the growth of the asset base of hotels operated by BHG.
BHG's Consolidated EBITDA, after Corporate expenses and expenses for maintenance and development of the beach landbank (previously belonging to GR Capital), underwent a 180 degrees turn around, from a negative result of R$10.9 million in 2009 to a positive result of R$10.7 million in 2010.
With the entry of several hotels acquired over the course of 2010 that were not operating in an optimized fashion, the Company's average occupancy suffered a small decline from 65.1% in 2009 to 64.2% in 2010, while the daily average fell from R$200.2 in 2009 to 194.5 in 2010.
Nonetheless, considering the same hotels that were already in the network in 2009 as a basis for comparison, for a total of 1,611 own rooms (the concept of Same Store Sales), we note a 20.4% increase in Hotel EBITDA, which leapt from R$22.0 million in 2009 to R$26.5 million in 2010. The occupation of these same hotels (Same Store Sales) leaped from 65.1% in 2009 to 69.7% in 2010.
BHG came into being following an operation of corporate amalgamation involving Invest Tur Brasil and Latin America Hotels (LAHotels), carried out in February of 2009. In 2010, the name of the company was changed upon the approval of an Extraordinary Shareholders Meeting, which also authorized a split of BHG stock at a ratio of 20 (twenty) shares for each existing share. With the change, Company shares began to be traded with the ticker code BHGR3, in the Novo Mercado segment of the BM&Fbovespa.
Also in 2010, the Company went through a new phase of its growth plan and added to its strategy the business of constructing economy hotels, called 'limited services' hotels. This project comprises part of an ambitious plan of development and construction in the next 5 years of more than 4,000 rooms in 40 cities that exhibit a strong demand and potential for growth of business tourism. The two first projects were announced in the last quarter of the year, and will be implemented in Itaguai and Campos dos Goytacazes, in Rio de Janeiro.
In addition to its hotel portfolio, BHG has a landbank of 16 holdings inherited from Invest Tur, which are going to be monetized. In 2010, we signed a financial swap for land located in the area of the Avenida Faria Lima, in Sao Paulo. The deal resulted in an agreement for the advance of receivables relating to the land, which was concluded in January of 2011 and yielded the Company R$ 52.4 million, which is being paid in 5 equal, consecutive monthly installments.
In November, BHG announced the launch of its Txai Ganchos Project, in partnership with Lindencorp Desenvolvimento Imobiliario S.A., and Cipasa Desenvolvimento Urbano S.A. This development project will be made up of 132 hotel units built on 530,000 m² of land, occupying only 6.6% of the area and preserving all the rest, with nearly 30% of the first phase already sold.
Moving forward with its plan to invest in urban hotels focusing on business tourism, in the beginning of 2011 BHG announced that it had signed a memorandum of understanding for sale of the shares of Txai Itacare and the Txai brand. The Company will continue to manage the hotel for the next 10 years, and retain the right to use the brand for the development of future launchings from the landbank, if necessary.
Recently, at a meeting held on February 4, 2011, the Board of Directors approved an increase in Company stock of approximately R$ 85 million, through the issue of 4,594,594 shares of common stock, raising the capital stock of BHG to R$ 725,774,759.16.
In 2010 we announced the acquisition of hotels and companies owning hotel assets as well as management of hotels that added 1,505 rooms to our network, also including the signing of an irrevocable and non-negotiable promise to purchase shares representing the stock of Brascan Imobiliaria Hotelaria e Turismo S.A., called the "Hotel Intercontinental," in Sao Conrado – Rio de Janeiro, with 418 suites (the deal was finalized in March of 2011).
In 2010 we also announced the acquisition of a minority participation in Rede Everest Hoteis (two hotels in Rio de Janeiro and 1 hotel in Porto Alegre) and the signing of an irrevocable and non-negotiable promise to purchase the Hotel Rio Palace (Sofitel Copacabana), an establishment with 388 rooms, between the beachfront of Copacabana and Ipanema, in Rio de Janeiro, which is subject to a pending court ruling.
BHG closes the year with R$ 174.1 million in cash and debt of R$128.0 million, which makes it, therefore, a Company with net cash of R$46.1 million. The Company will surge ahead at the same pace in 2011, seeking growth that is sustainable and robust, through the acquisition, management and development of hotels all over Brazil.
Who we are:
BHG S.A. – Brazil Hospitality Group is one of the leading companies in the Brazilian hotel industry, with its own hotels as well as those it manages divided into categories of 3, 4 and 5 stars. The company is responsible for the Golden Tulip brand in South America.
BHG is a public company, whose shares are traded on the Novo Mercado of Bovespa.
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