DiamondRock Hospitality Company (DRH) has reported a 22.37 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $29.94 million, or $0.15 a share in the quarter, compared with $24.46 million, or $0.12 a share for the same period last year.
Revenue during the quarter dropped 7.66 percent to $220.24 million from $238.50 million in the previous year period.
Cost of revenue dropped 8.96 percent or $14.83 million during the quarter to $150.65 million. Gross margin for the quarter expanded 98 basis points over the previous year period to 31.60 percent.
Total expenses were $178.94 million for the quarter, down 9.21 percent or $18.15 million from year-ago period. Operating margin for the quarter expanded 139 basis points over the previous year period to 18.75 percent.
Operating income for the quarter was $41.30 million, compared with $41.42 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $65.65 million compared with $69.34 million in the prior year period. At the same time, adjusted EBITDA margin improved 73 basis points in the quarter to 29.81 percent from 29.07 percent in the last year period.
For financial year 2016, DiamondRock Hospitality Company projects net income to be in the range of $107.45 million to $118.45 million.
Occupancy revenue was $163.16 million for the quarter, down 8.61 percent or $15.37 million. Food and beverage revenue was $44.07 million during the quarter, down 6.74 percent or $3.19 million from year-ago period. Revenue from other hotel operating activities was $13.01 million for the quarter, up 2.32 percent or $0.29 million from year-ago period.
Mark W. Brugger, president and chief executive officer of DiamondRock Hospitality Company, stated, "Our portfolio gained 2.1 points of market share in the quarter despite moderating transient demand. Our tight cost controls resulted in impressive third quarter profit margins. Year-to-date, the Company has kept total expenses flat. Additionally, the Company has successfully executed on its strategic priority of increasing liquidity and expects to end the year with over $200 million in corporate cash, no outstanding borrowings on our corporate credit facility, and more than half the portfolio unencumbered by debt. DiamondRock continues to pay a competitive, well-covered dividend and remains well positioned to deploy capital opportunistically, including through share repurchases, which began at the end of the quarter."
Total assets declined 3.51 percent or $111.90 million to $3,078.45 million on Sep. 30, 2016. On the other hand, total liabilities were at $1,234.07 million as on Sep. 30, 2016, down 9.76 percent or $133.52 million from year-ago.
Return on assets moved up 11 basis points to 1.28 percent in the quarter. At the same time, return on equity moved up 28 basis points to 1.62 percent in the quarter.
Debt comes down
Total debt was at $922.96 million as on Sep. 30, 2016, down 12.61 percent or $133.24 million from year-ago. Shareholders equity stood at $1,844.38 million as on Sep. 30, 2016, up 1.19 percent or $21.62 million from year-ago. As a result, debt to equity ratio went down 8 basis points to 0.50 percent in the quarter.
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