DiamondRock Hospitality Company (DRH) has reported a 6.99 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $23.91 million, or $0.12 a share in the quarter, compared with $25.70 million, or $0.14 a share for the same period last year.
Revenue during the quarter dropped 11.62 percent to $206.62 million from $233.80 million in the previous year period.
Cost of revenue dropped 12.36 percent or $20.16 million during the quarter to $142.95 million. Gross margin for the quarter expanded 58 basis points over the previous year period to 30.82 percent.
Total expenses were $172.87 million for the quarter, down 11.58 percent or $22.64 million from year-ago period. Operating margin for the quarter contracted 4 basis points over the previous year period to 16.33 percent.
Operating income for the quarter was $33.75 million, compared with $38.29 million in the previous year period. However, the adjusted EBITDA for the quarter stood at $58.74 million compared with $66.95 million in the prior year period. At the same time, adjusted EBITDA margin contracted 21 basis points in the quarter to 28.43 percent from 28.64 percent in the last year period.
For fiscal year 2017, DiamondRock Hospitality Company forecasts net income to be in the range of $87.80 million to $98.80 million.
Occupancy revenue was $151.91 million for the quarter, down 10.03 percent or $16.94 million. Food and beverage revenue was $42.91 million during the quarter, down 18.29 percent or $9.61 million from year-ago period. Revenue from other hotel operating activities was $11.80 million for the quarter, down 5.10 percent or $0.63 million from year-ago period.
Mark W. Brugger, president and chief executive officer of DiamondRock Hospitality Company stated, "In 2016 DiamondRock implemented rigorous cost controls, resulting in zero growth in total hotel expenses, a record for the Company. This strong asset management led the company to achieve its original EBITDA guidance despite a softer demand environment. With the recent addition of Tom Healy, a proven industry leader, as Chief Operating Officer we look to build upon this success." Mr. Brugger added, "The company also executed on its strategic priority to create $450 million investment capacity through asset sales and financings in 2016, which positions DiamondRock to be opportunistic headed into 2017."
Net receivables were at $77.93 million as on Dec. 31, 2016, down 10.12 percent or $8.77 million from year-ago.
Total assets declined 7.34 percent or $243.05 million to $3,069.46 million on Dec. 31, 2016. On the other hand, total liabilities were at $1,232.68 million as on Dec. 31, 2016, down 17.15 percent or $255.23 million from year-ago.
Return on assets moved down 10 basis points to 1.09 percent in the quarter. At the same time, return on equity moved down 11 basis points to 1.30 percent in the quarter.
Debt comes down
Total debt was at $920.54 million as on Dec. 31, 2016, down 21.30 percent or $249.21 million from year-ago. Shareholders equity stood at $1,836.79 million as on Dec. 31, 2016, up 0.67 percent or $12.18 million from year-ago. As a result, debt to equity ratio went down 14 basis points to 0.50 percent in the quarter.
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