Hyatt Hotels Corp. saw its earnings and net income increase in the second quarter of 2012.
Adjusted EBITDA was $180m in the second quarter of 2012 compared to $151m in the second quarter of 2011, an increase of 19.2 percent.
Hyatt announced its net income was $39m, or 24 cents per share in 2Q 2012 compared to net income of $37m or 22 cents per share, in the 2Q 2011. However, the publicly traded hotel company noted net income attributable to Hyatt of $46m, or 27 cents per share, during the second quarter of 2011 ‘benefited from a $12m, or 7 cents per share, release of a tax valuation allowance against certain foreign net operating losses.’
Comparable owned and leased hotel RevPAR increased 7.6 percent in the second quarter of 2012 compared to the second quarter of 2011. RevPAR in North America increased even greater – more than 8 percent – the company attributed to ‘strong transient demand.’
The company opened five properties during the second quarter of 2012. And its board of directors authorized a repurchase of common stock of up to $200m.
Mark S. Hoplamazian, president and chief executive officer of Hyatt Hotels Corp., said, ‘Our second quarter results were strong, with Adjusted EBITDA increasing over 19 percent compared to last year. RevPAR increased over 8 percent in North America as we experienced strong transient demand. Owned and leased RevPAR grew over 9 percent in constant dollars as we benefited from last year’s significant renovations.
‘Our international hotels continued to perform well, with RevPAR up over 8 percent in constant dollars. In particular, most of our hotels in China continued to show solid results, with a sequential increase in year-over-year RevPAR growth for comparable hotels in the second quarter. In addition, results from our hotels in Europe, which are primarily located in gateway cities such as Paris and London, remained good, despite the economic uncertainty in the wider region.
‘Over the last 18 months, we have completed hotel acquisitions totaling over $900m. These properties are performing well, with re-branding largely complete and the benefits of our system leading to strong growth in RevPAR and in market share.
‘Looking ahead, we are encouraged by recent trends in transient travel and positive group pace as compared to last year. Our base of executed contracts for future openings is the largest it has ever been – at 175 hotels. We are on track to open over 20 hotels this year, including our first select service hotel outside the US. In addition, the company is well positioned to take advantage of growth opportunities, as our balance sheet remains strong. Our organizational realignment is progressing well and slated for completion during the fourth quarter of 2012. Hyatt’s realignment costs totaled $7m in 2Q 2012, according to its report.
‘The decision to authorize a repurchase of common stock reflects the board’s judgment as to what is in the best interests of all shareholders in the context of our strategy, financial position, business results and macro-economic factors.’
In North America, revenue from management and franchise fees increased 17.9 percent in the second quarter of 2012 compared to the same period in 2011.
The following four hotels were added to the portfolio during the second quarter:
During the second quarter of 2012, Hyatt purchased a 756-room hotel in Mexico City for $190m and rebranded it as a Hyatt Regency Mexico City. It claimed a $1m loss in 2Q 2012 in connection with the buy.
On June 30, 2012, the company had total debt of approximately $1.2bn, and it had cash and cash equivalents of approximately $400m and short-term investments of approximately $500m. At the end of 2Q 2012, Hyatt had approximately $1.4bn available under its revolving credit facility. The company expects to open more than 20 hotels before the end of 2012.
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