Morgans Hotel Reports $11.8 Million EBITDA in Q2 2011
[wikichart align="right" ticker="NASDAQ:MHGC" showannotations="true" livequote="true" startdate="03-02-2011" enddate="03-08-2011" width="300" height="245"]
Morgans Hotel Group (MHG) recently reported an adjusted EBITDA for the second quarter in 2011 amounting to $11.8 million. The adjustment shows an increase of $3.7 million compared to the previous year.
Increased RevPar
For System-Wide Comparable Hotels, RevPar is up by 16.1 percent, which is mainly due to the 11.1 percent average daily rate (ADR) increase. There is also a 26 percent increase from EBITDA of Owned Comparable Hotels. The increase can be attributed to the 340-point increase in operating margins. As a result of strong domestic and international travels, all of the company’s major markets increased. Key EBITDA contributors are the RevPar increases of the three hotels: Delano by 22 percent, London Hotel by 19.2 percent, and Hudson by 7.3 percent. MHG’s Modrian Soho also posted an impressive 84.3 percent occupancy growth rate with an ADR of $297.31.
$0.6 million Income Growth for June
MHG has also experienced a 7.7 percent revenue decrease because of the May 2011 sale of Los Angeles Mondrian, Royalton and Morgans. Furthermore, there are also decreases regarding several expenses that involve operation, depreciation, amortization and interest. Despite the setbacks the company continued to manage the three hotels pursuant to management agreements. The company recorded a $.6 million income growth during three months ending June 30, 2011. Currently, the company has remaining $140 million net operating loss that can be offset to future income.
New $100 million Senior Credit Facility
In June 2011, MHG acquired 50 percent interest from its joint venture with China Grill Management (CGM) for $20 million. Thus, it gives the company operational control over food and beverage. Last month, the hospitality company entered into a new $100 million senior credit facility with additional $110 million borrowing capacity.
CEO of Morgans Hotel Group Michael Gross said, “Second quarter results outperformed industry averages across all our markets and we’re particularly pleased with the early success of the Mondrian SoHo, which we view as a reflection of our brands’ untapped growth potential.” In addition, he also said that the company is moving towards becoming a worldwide leader in lifestyle hospitality management.
The company’s goal is to drive growth and long-term shareholder value. It is reflected in the newly signed agreement for a 310-room Baha Mar Resort in the Bahamas. The company is “excited about its robust development pipeline that is already beginning to show results, as reflected by the just-announced Mondrian management agreement at Baha Mar,” Gross said.
Short URL: http://www.timesharepages.com/?p=7394
