Kingdom Hotel Investments (“KHI”) Interim results for the six months to June 30, 2006

Published September 26th, 2006 - 07:41 GMT

Kingdom Hotel Investments (“KHI”) (ticker: KHIq), the leading international hotel and resort investment company, today reports its interim results for the six months to June 30, 2006.

Financial Highlights – continuing strong performance across the KHI portfolio

• Revenue up 71 per cent to US$42.7 million (2005: US$24.9 million)
• Gross profit up 36 per cent to US$11.7 million (2005: US$8.6 million)
• EBITDA up by 8 per cent to US$11.7 million (2005: US$10.8 million)
• Net Income up by 282 per cent to US$27.9 million* (2005:  US$7.3 million)
• EPS up 157 per cent to US$0.18 (2005: US$0.07) **
• Like-for-like RevPAR weighted by equity invested up by 12 per cent to US$259 (2005: US$231)
• During the first six months of 2006, KHI invested US$290.5 million in acquisitions, of which US$168.9 million was in cash
• KHI free uncommitted cash as at September 2006 amounted to US$278.3 million
• KHI raised US$237 million of financing and refinancing proceeds of which US$46 million was during H1 2006 and US$191 million was subsequent to June 30, 2006
• KHI reduced its portfolio weighted average cost of debt from 250bps above 6 months LIBOR as at December 2005 to the current rate of 196 bps above 6 months LIBOR
• Completed a US$398.5 million IPO on March 1, 2006, with primary listing on DIFX and GDS’s on LSE

Includes a US$12.8 million deferred credit (a non-recurring item). Removing the deferred credit would result in a 168 per cent CAGR since 2004

** Using weighted average number of share outstanding

Operational Highlights – dynamic expansion in key markets

• Ongoing expansion: In H1 2006, KHI signed agreements to acquire and/or develop 7 hotels in 6 countries adding 1,630 rooms:
- In total, KHI’s equity commitment was US$292.1 million***

• Resilient operational performance across the balanced portfolio - particularly strong performances from:
 Four Seasons Hotel Cairo at Nile Plaza (EBITDA growth of 69.6 per cent)
 Mövenpick Hotel Bur Dubai (EBITDA growth of 25.2 per cent)
 Four Seasons Hotel George V in Paris (EBITDA growth of 24.5 per cent)

• Continued strategic investment programme and progress in acquiring minority interests in hotel assets, including:
- Four Seasons Hotel Cairo at Nile Plaza
- Four Seasons Hotel Damascus
- Fairmont Palm Hotel, Dubai

• Further acquisitions in key markets since June 30, 2006 and up to the date of the Earnings Release:
 September 2006: Raffles Resort, Phang Nga, Thailand  - Signed an agreement to become an 80 per cent shareholder in a joint venture with European Hotels Corporation Limited to build a five star deluxe resort with substantial ancillary real estate
 September 2006: Mövenpick Bur Dubai Residences, UAE – acquisition (100 per cent ownership)
 September 2006: Acquisition of the Intercontinental Lusaka, Zambia
 July 2006: Mövenpick Resort El Quseir – increased ownership from 30.5 per cent to 87.3 per cent

• KHI is currently actively negotiating contracts on 5 signed MOUs with an envisaged equity deployment of some US$235.5 million, of which US$64.3 million is targeted for existing projects
- In line with KHI’s policy, deal specifics will be announced once definitive agreements are signed
- Additionally KHI continues to originate a strong deal pipeline

• Strong ancillary real estate sales, particularly at the Four Seasons Private Residences Marrakech, where 95 per cent of the residential units are now reserved, thereby reducing KHI’s equity commitment from US$45.6 million to US$10.0 million

*** Includes US$95.5 million share swap in respect of the George V acquisition

Commenting on the results, Chairman HRH Prince Alwaleed Bin Talal said:
“We have had a strong six months with continued development throughout a number of key territories where we continue to see considerable potential.”

Chief Executive Officer Sarmad Zok said:
“Our year to date has been an exciting combination of fast-paced expansion while consolidating our holdings in key properties. We are pleased with our ongoing strong earnings growth and look forward to further delivery of our ambitions.”


 


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