Belmond Ltd (BEL) has reported an 129 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $22.90 million, or $0.23 a share in the quarter, compared with $10 million, or $0.10 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $23.30 million, or $0.23 a share compared with $14.60 million or $0.14 a share, a year ago.
Revenue during the quarter grew 9.09 percent to $183.70 million from $168.40 million in the previous year period. Gross margin for the quarter expanded 303 basis points over the previous year period to 96.08 percent. Total expenses were 12.47 percent of quarterly revenues, down from 17.10 percent for the same period last year. This has led to an improvement of 464 basis points in operating margin to 87.53 percent.
Operating income for the quarter was $160.80 million, compared with $139.60 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $65.70 million compared with $51.90 million in the prior year period. At the same time, adjusted EBITDA margin improved 495 basis points in the quarter to 35.76 percent from 30.82 percent in the last year period.
Roeland Vos, president and chief executive officer, remarked: “Results for our third quarter were strong and benefited from our heightened focus on driving top- and bottom-line growth at our existing properties. The primary drivers of our third quarter growth were Belmond Copacabana Palace in Rio de Janeiro, Brazil as a result of the 2016 Summer Olympic Games and our European hotels during their traditional high seasons in the summer. In both cases, we capitalized on periods of peak demand, driving enhanced results for the quarter while at the same time increasing awareness for the Belmond brand. At Belmond Copacabana Palace, we leveraged a full hotel and increased foot traffic to generate not only strong rooms growth but also outstanding results for our food and beverage outlets. In Europe, we used the continued strong demand for our prime Italian assets to drive even higher rates, and for the rest of our hotels in Europe, we continued to successfully stimulate incremental demand from new markets. With total adjusted EBITDA growth of 25% over the prior-year quarter on a constant currency basis, I am pleased with what we accomplished and the results we delivered.
Working capital increases
Belmond Ltd has recorded an increase in the working capital over the last year. It stood at $123.60 million as at Sep. 30, 2016, up 12.53 percent or $13.76 million from $109.84 million on Sep. 30, 2015. Current ratio was at 1.86 as on Sep. 30, 2016, up from 1.70 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 61 days for the quarter from 68 days for the last year period. Days sales outstanding went down to 23 days for the quarter compared with 24 days for the same period last year.
Days inventory outstanding has decreased to 172 days for the quarter compared with 213 days for the previous year period. At the same time, days payable outstanding went up to 256 days for the quarter from 169 for the same period last year.
Debt remains almost stable
Total debt of Belmond Ltd remained almost stable for the quarter at $601.60 million, when compared with the last year period. Total debt was 37.88 percent of total assets as on Sep. 30, 2016, compared with 37.75 percent on Sep. 30, 2015. Debt to equity ratio was at 0.86 as on Sep. 30, 2016, down from 0.88 as on Sep. 30, 2015. Interest coverage ratio improved to 21.16 for the quarter from 14.10 for the same period last year.
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