China Lodging Group (Huazhu) announced its unaudited financial results for the fourth quarter and full year 2015 on March 11, 2016.
Highlights
· A total of 2,763 hotels or 278,843 hotel rooms in operation as of December 31, 2015
· Net revenues increased 16.2% year-over-year to RMB1,506.3 million (US$232.5 million)1 for the fourth quarter and 16.3% to RMB5,774.6 million (US$891.4 million) for the full year of 2015, in line with the guidance previously announced.
· Adjusted EBITDA (non-GAAP) increased 55.4% year-over-year to RMB320.4 million (US$49.5 million) for the fourth quarter and increased 32.2% to RMB1,324.2 million (US$204.4 million) for the full year of 2015.
· Net income attributable to China Lodging Group, Limited was RMB70.8 million (US$10.9 million) for the fourth quarter and RMB436.6 million (US$67.4 million) for the full year of 2015, increasing 51.1% year-over-year for the fourth quarter and increasing 42.1% for the full year of 2015.
"In 2016, we continue our consistent execution of asset-light and multiple-brand strategy. We plan to open 750 to 800 hotels, with 80% for economy hotels and 20% for midscale and upscale hotels. The manachised ("franchised-and-managed") and franchised hotels continue to be the vast majority of our new openings in 2016, which is similar to 2015." commented Qi Ji, founder and executive chairman of the company.
As of 31 December, 2015, Huazhu had a total of 2763 hotels in operation, including 616 leased hotels, 2067 manachised hotels and 80 franchised hotels, covering 352 cities in China. The company had a total of 310 midscale and upscale hotels, including 186 JI Hotels, 118 Starway Hotels, 3 Joya Hotels, 2 Manxin Hotels & Resorts and 1 Mercure Hotel.
The midscale and upscale hotels registered a 7.8% same-hotel RevPAR improvement for the fourth quarter, with a 4.7% increase in ADR and 2.4-percentage-point increase in occupancy rate. For full-year 2015, they registered a 6.5% same-hotel RevPAR improvement, with a 5.5% increase in ADR and 0.8-percentage-point increase in occupancy rate.
As of December 31, 2015, the Company's loyalty program had more than 49 million members, who contributed more than 80% of room nights sold during the full year of 2015. In 2015, more than 90% of room nights were sold through the Company's own channels.
In January 2016, Huazhu completed the transaction of strategic alliance with AccorHotels. The Company has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region. The company takes a non-controlling stake of 29.3% and two board seats in a joint venture for AccorHotels Luxury and Upscale hotel operating platform in Greater China. AccorHotels has a 10.8% stake in of Huazhu, including newly issued 24,895,543 ordinary shares at a price of $6.6375 per ordinary share (or 9.0% of Huazhu's outstanding shares after issuance; 4 ordinary shares=1 American depositary shares) and the Company's American depositary shares purchased by AccorHotels from the open market. Sebastien Bazin, Chaiman and CEO of AccorHotels, has been appointed to Huazhu's Board of Directors.
For full year of 2015, the Company repurchased 0.77 million ADS for $17.5 million; the Company also declared cash dividend of $0.68 per ADS in 2015 which was paid in early 2016.
"In spite of the soft Chinese macro economy, our comparable mature hotels (in operation at least 18 months) achieved occupancy rate of 88%. In particular, our midscale and upscale hotels registered a 6.5% same-hotel RevPAR improvement. Our increasing unit growth and solid operational performance should continue to fuel improving margin, growing cash flow and steady returns to shareholders in the long term." Mr. Ji added.
In the first quarter of 2016, the Company expects net revenues to grow 14% to 15% year-over-year. For the full year 2016, the Company expects net revenues to grow 12% to 15% from 2015.
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