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Accor's Polish unit Orbis meets 2013 forecast, plans EUR 24mn investments in 2014

February 23, 2014

Poland's biggest hotel chain operator Orbis - controlled by France'sAccor - has exceeded its 2013 EBITDA forecast of PLN 192mn as it reported profit at that level of PLN 196mn (down by 0.4% y/y). At that time, its EBITDA margin improved by 1.0pps on the year to 28.7%. After eliminating the impact of one-off events, EBITDA was PLN 199mn in 2013. Orbis also announced that considering the necessity to continually improve the standard of offered services, it plans to invest PLN 100mn (EUR 24mn) by the end of 2014 in modernisations of key operating hotels (vs PLN 62mn spent on such projects in 2013). It stressed that 90% of this amount will be channelled into the Group's most important market, i.e. Warsaw.

Substantial amount of expenditure, i.e. nearly PLN 40mn, was expended already in 2013, predominantly for the modernisation of the Mercure Warszawa Centrum hotel and the first stage of comprehensive modernisation of the Sofitel Warszawa Victoria. In Sofitel, modernisation works will continue in 2014 and will cover subsequent rooms, public areas on the ground floor, including the main entrance, conference rooms and technical installations. Works are scheduled to come to an end in Q3 of 2014. The total cost of the two-year modernisation has been assessed at around PLN 33mn.

Subsequent renovations of interiors will be carried out in the Novotel Warszawa Centrum, the biggest hotel in this part of Europe, for which the Company will expend approximately PLN 18.5mn. The reception area and the lobby will be altered, and the conference rooms will be rendered even more comfortable and modern. Modernisation works will be performed in further hotel rooms, corridors and the food & beverage area, the firm also reported.

In addition to investments on the Warsaw market, in 2014 the Orbis Gdynia hotel will undergo modernisation, combined with hotel rebranding to the Mercure brand, covering selected rooms, public areas and facades. The total planned budget for implementation of this project will exceed PLN 22mn.

Other properties to be modernised in 2014 include economy hotels. These hotels' public areas will be redesigned in line with the Avanzi concept that brings street art and graffiti to hotels. Some economy hotels, including ibis Warszawa Centrum, ibis Ostrobramska and ibis Krakow Centrum, were modernised already in 2013.

In 2013, the Orbis Hotel Group added four new hotels to the network, namely Mercure Piotrkow, Mercure Krynica Zdroj,Mercure Warszawa Airport and Mercure Wisla Patria. New hotel openings are planned for 2014, the company also announced. Based on agreements signed to date, the Orbis Hotel Group will expand by six franchised properties, offering 533 rooms in aggregate, including four Mercure hotels (Bydgoszcz Sepia, Raclawice Doslonce, Mercure Riga Centre in Latvia and Mercure Marijampole in Lithuania) as well as two ibis Styles hotels (in Wroclaw and Nowy Sacz).

At the end of 2013, the Group consisted of 63 hotels (vs. 57 units a year earlier). Last year, its occupancy rate improved by 3.0pps y/y to 58.8%, while the average room rate was down to PLN 211.2 from PLN 233.2 a year earlier.

The firm's management also pledged to recommend dividend at a level not lower than last year, when it amounted to PLN 1.4 per share.


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Source: IntelliNews - Weekly Reports

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