Pandox' cash flow increased by 13 percent to SEK 502.5 million (446.4), leading to the Company passing half a billion kronor in available cash flows for the first time. When including the cash flow from Norgani for the two months that Pandox has owned the company, total cash flow was SEK 518.9 million.
Property management revenues amounted to SEK 923.3 million (895.2), representing an increase of 5.1 percent for comparable units, including an adjustment for currency effects.
Revenues from Pandox' own operations were SEK 1,208.6 million (1,095.0), representing an increase of 12 percent for comparable units and adjusted for currency effects.
Profit before tax, excluding capital gains and portion of earnings from Norgani, amounted to SEK 307.8 million (252.5). Including the capital gain from the sale of shares in the hotel property company Host Hotels & Resorts Inc and the portion of earnings from Norgani, the profit amounted to SEK 744.7 million before tax.
The driving force behind the rise in profits and cash flow is a combination of an improved hotel market, high quality in the hotel property portfolio, lower financing costs, improved productivity, and the Company's active ownership.
On 24 August, Pandox announced the acquisition of Norgani Hotels AS in close cooperation with Pandox' owners. The acquisition price was SEK 9.7 billion. Norgani's portfolio is composed of 73 hotel properties in Sweden, Finland, Norway and Denmark with a total of 12,900 rooms. Possession took place on 4 November 2010. Pandox' proportion of ownership amounts to 50 percent, and is being reported in accordance with the equity method.
On 6 September, Pandox acquired the Brussels Hilton with 433 rooms, located in central Brussels. The acquisition price was EUR 29 million, and covers the hotel property and its operating activities. Further to possession, the hotel changed name to The Hotel, Brussels.
In September, Pandox announced the acquisition of Park Inn in Solna Centrum in northern Stockholm. The acquisition price was SEK 205 million before an adjustment for deferred tax. Possession took place on 28 January 2011.
The global recovery further to the finance crisis continues and surprised positively in the second half-year 2010 both in the United States and in Europe. However, the American economy still has problems with high unemployment, falling house prices and a budget deficit. Like in the US, several European countries are wrestling with large deficits in their public finances, which could restrain growth in the region. However, Europe is showing considerable variations in growth preconditions whereby Germany and Sweden are breathing optimism while certain countries, particularly in southern Europe, see a tougher future ahead of them. The current trend is that the general pace of improvement is continuing, although the overall picture is still split and developments are uneven.
Within this global environment, Pandox' hotel property portfolio performed well. Property management revenues grew by 3.1 percent during the period, and even 5.1 percent for comparable units and exchange rates. Growth within operational activities was 12 percent, which is partly due to hotels that have undergone major investment programs are now once again being operated with full capacity. The rate of improvement was better than the market on average, which implies that the hotels in Pandox' portfolio in general took market shares. Profits and cash flows continued to rise.
The driving force is a combination of an improved hotel market, the Company's strategy, high quality in the portfolio, lower financing costs, and the Company's active ownership.
For further information, please contact:
+46 (0)8 506 205 50
+46 (0)708 46 02 02
Senior Vice President, CFO
+46 (0)8 506 205 80
+46 (0)70 237 44 04
PANDOX - One of the leading hotel property companies
PANDOX AB | Orgnr 556030-7885 | P.O. Box 53694 | SE-102 49 Stockholm, Sweden | Grev Turegatan 44 | Phone +46 8 506 250 50 | email@example.com | www.pandox.se