Accor posts record profit as restructuring pays off
PARIS: Accor SA, Europe’s largest hotelier, said yesterday that it had achieved a record operating profit last year, reaping the first fruits of its restructuring amid recovering demand for hotel rooms in Europe and robust emerging markets.
The world’s fourth-largest hotel player, which is undergoing a reorganisation initiated by chief executive Sebastien Bazin, said it aimed to further improve its operating and financial performance this year.
It however remained cautious on its core French market in view of the constrained economic climate and deadly attacks by Islamist militants in January.
“The year 2014 was busy. We have laid the groundwork to become the most innovative, best performing and most highly valued hotel group,” Bazin told reporters, though he declined to provide specific targets for 2015.
Accor said yearly earnings before interest and tax (EBIT) reached a record €602 million ($687 million), a like-for-like rise of 11.7%, underpinned by cost savings and strong demand in most markets.
This compared with the company’s revised guidance of around €600 million and analysts’ average estimate of €589 million in a Thomson Reuters I/B/E/S poll.
The French group, with 3,700 hotels ranging from the luxury Sofitel to the budget Ibis, said it would pay a 2014 dividend of €0.95 a share, up 19% from 2013.
Bazin, who took over in August 2013, has split Accor into two divisions, Hotel-Services and Hotel-Invest, to separate its operating and franchising business from its real estate activity in an effort to boost profitability.
The group has also announced plans to spend €225 million ($256 million) over five years to beef up its digital business, responding to competition from online booking rivals such as Expedia and Booking.com.
Net debt reached €159 million ($181 million) at end-December, a reduction of €67 million.