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Spain's Melia returns to profit after completing Cuba exit

By Reuters News

MADRID, Nov 3 (Reuters) - Spanish hotel group Melia MEL.MC on Tuesday reported a consolidated profit of €89.4 million ($100 million) in the third quarter, virtually unchanged from a year earlier, but showing a recovery from a first-half net loss of €7.5 million caused by the company's exit from Cuba.

  • The net profit came in above analysts' average forecast of €80.3 million.

  • Demand at Melia's resorts during the summer season offset the impact of ceasing operations at its 34 hotels in Cuba amid the hardening of US sanctions and the island’s growing economic crisis. The exit occurred between June and July.

  • Revenues at Spain's largest hotel chain, which also operates across Europe, Asia and the Caribbean, rose 8% from a year ago to €659.6 million.

  • Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 4% from a year earlier to €198.3 million, broadly in line with the consensus estimate for the period in an LSEG survey.

  • Revenue per available room (RevPAR) rose 7.5% at constant currency in the third quarter, excluding the ceasing of Cuba operations, and the Mallorca-based company expects RevPAR to grow in high single digits this year.

  • The company said its fourth-quarter bookings are rising at a double-digit rate through its direct sales channels compared with a year ago.

  • Still, it warned that the deadly October 28 train crash on the Madrid-Seville line and the suspension of service there could slow demand for its southern Spain destinations in the fourth quarter.

($1 = 0.8937 euros)

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