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PRESS RELEASE, 19 FEBRUARY 2014 - Year-end report 2013

19 Feb, 2014, 11:12
Year-end report 2013
  • On December the 1st 2013, Pandox AB (publ) acquired the outstanding 50 per cent share of the Norgani group. As a result, the Norgani group will be consolidated as a fully owned subsidiary of Pandox AB (publ) from that date.
  • Pandox’ operating cash flow, excluding non-recurring items but including the 50 per cent share in the Norgani group for the first 11 months, amounted to SEK 639.7 M (664.5), down 3.7 per cent compared to 2012. The decrease is largely explained by the significant decrease in capacity due to planned investments and a higher cost of financing.
  • Property management revenues amounted to SEK 997.4 M (960.6). For comparable entities, including an adjustment for currency effects, the property management revenues were essentially unchanged from the previous year.
  • Revenues from Pandox' own operations were SEK 1,285.6 M (1,156.0), representing an increase of 2.9 per cent for comparable units. The improvement is mainly explained by the facts that The Hotel, Brussels, has been operating at full capacity during the last quarter and that Hyatt Montreal, which was badly affected by a strike in 2012, had a very strong year. 
  • Profit before tax, excluding non-recurring items but including Pandox’ share in Norgani, amounted to SEK 389.1 M (435.2).
  • Pandox manages a hotel property portfolio consisting of 120 hotels with 25,000 rooms and one congress centre. The company operates across 10 countries, in 59 locations and under 19 different brands. Since December 1st 2013, Pandox has sole ownership of all hotel properties plus a management agreement for one hotel which belongs to one of Pandox’ shareholders.

The numbers in this report is based on the full figures for the 47 hotels which have been wholly owned by Pandox throughout the year, plus the attributable share, according to the equity method, of the 11 month results for the remaining 72 hotels and a conference centre. From Dec 1st 2013 and onwards, all hotels are 100 per cent owned by Pandox and, as a result, all the numbers from all the hotels are consolidated from that date.

For the sake of comparison, we also publish a pro forma profit and loss statement for the combined Pandox/Norgani operations in 2013 and 2012.

The US economy displayed clear signs of improvement during 2013 with rising house prices and an improvement in labour markets among the positives. By the end of the year, unemployment had dropped to 7 per cent compared to 10 per cent in October 2009. Most commentators believe that the US economy can expect to see steady improvements and stable growth during 2014-2015. China’s growth seems to have levelled out at the high level while other emerging markets are expected to be supported by a global upturn in general.

The Eurozone came out of recession before the summer of 2013, but has not shown any signs of real improvement in growth rates since. Demand expansion is mainly driven by Germany, but also heavily indebted countries, such as Ireland, Portugal, Greece and Spain, have seen meaningful improvements. Austerity measures have also been cut back which bodes well for the future. A number of challenges still remain though.

2013 has been a year of slow growth for the Swedish economy, but multiple signs are now pointing towards improved GNP-growth as manufacturing and exports start to grow and strong household finances drive consumption. The risk of increased inflation seems low and labour markets are seen as fairly stable. Economists are predicting a 3 per cent GDP growth for 2014 and the already historically strong Krona is expected to firm even further. Also in Denmark, which has been hampered by the recession and falling house prices for some time, the future looks brighter? House prices have started to recover and an upturn in economic activity can be detected, particularly in Copenhagen. However, the recovery is still slow and relatively weak.

The Norwegian economy has seen weak growth mainly due to falling house prices and declining investments in the construction and energy sectors coupled with a persistently weak demand on the consumer side. In addition, a currency that has stayed strong over a longer time continues to dampen GDP growth and the 2014 forecast has been revised down to 1.5 per cent.

Yet again, Finland has the gloomiest outlook of the Nordic countries. The slow growth in the Eurozone, the dip in the Russian economy as well as higher taxes weighs on the export dependent economy. GDP fell in 2013 for the second year running and there is still a lack of real drivers of growth.

Enclosed: Complete Year-End Report.

For more information, please contact:

Anders Nissen, CEO Pandox AB, +46 708 46 02 02,

Liia Nõu, CFO Pandox AB, +46 70 237 44 04,