Four Seasons Hotels Inc. reports first quarter 2006 results
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Four Seasons Hotels Inc. reports first quarter 2006 results
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Category: Worldwide -
This is a press release selected by our editorial committee and published online for free on 2006-05-08
Four Seasons Hotels Inc. (TSX Symbol "FSH"; NYSE Symbol "FS") today reported its results for the first quarter ended March 31, 2006.
All amounts disclosed in this news release are in US dollars unless otherwise noted. Endnotes can be found at the end of this news release.
Highlights of the First Quarter of 2006
For the three months ended March 31, 2006, as compared to the same period in 2005:
Hotel and Resort Operating Results:
- RevPAR(1) at our worldwide Core Hotels(2) increased 11.7%. RevPAR
at our US Core Hotels increased 12.6%.
- Gross operating margins(3) at our worldwide Core Hotels increased
250 basis points to 32.4%. At our US Core Hotels, gross operating
margins increased 210 basis points to 30.2%.
- Revenues under management increased 15.1% to $692.3 million. We
had approximately 17,500 rooms under management in the first
quarter of 2006, as compared to approximately 16,500 rooms in the
first quarter of 2005.
"We are very pleased with our operating results in the first quarter, which reflect continued strong travel demand, particularly for luxury travel experiences. We are also pleased with the strong profitability improvements at the hotels and resorts we manage," commented Isadore Sharp, Chairman and Chief Executive Officer. "Recently opened properties in Hong Kong, Geneva, Palo Alto and a new tented camp in the Golden Triangle, Thailand are garnering immediate critical acclaim and a strong positive customer response, which further enhances the Four Seasons brand."
Company Operating Results:
- Overall, we recorded net earnings of $13.4 million ($0.36 basic
and diluted earnings per share), compared to net earnings of
$5.2 million ($0.14 basic and diluted earnings per share).
- As a result of improved results at properties under our management
and an increase in the number of rooms under management, hotel
management fees increased 23.1%.
- Base fees increased 12.1%, generally in line with RevPAR
improvements for the quarter.
- As a result of improved profitability and the addition of new
properties under our management, incentive fees increased 50.3%.
Incentive fees from resorts under our management had the most
significant year over year increase.
- Other fees improved 44.7%, primarily as a result of an increase in
branded residential royalty fees.
- Operating earnings before other items(4) increased $8.4 million to
$20.5 million.
"We are pleased with the growth in our management fees. Our financial results are tracking with the operational improvements at the properties we manage," said John Davison, Chief Financial Officer. "Our base fees increased generally in line with the overall RevPAR performance of properties under our management, which was ahead of our expectations. We are also pleased with the progress we have made on certain corporate initiatives related to cost control and foreign exchange management."
Expanding and Refining the Portfolio:
- Negotiations continue with the owner of the Ritz-Carlton Chicago
concerning the sale of that property and the potential cessation
of our management on acceptable terms.
- Since the beginning of the year, we have announced new projects in
the following five locations: Barbados, Macau, Seychelles,
Shanghai and Taipei.
"We are delighted with the strength of our development pipeline, which continues to grow in depth and breadth," said Kathleen Taylor, President Worldwide Business Operations. "Each of these new locations will be exciting additions to our portfolio and will help support the future growth of the Company."
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