Spain’s Sol Melia Sees Profits Soar into Double Digits

Spanish hotel company Sol Melia celebrated its fiftieth anniversary in 2006 with a 7.9 percent increase in revenues, a 13.2 percent increase in EBITDA, and an increase in net profits of 51.2 percent.

The results have been influenced by the positive performance of the company’s three hotel divisions and Sol Melia Vacation Club (SMVC), together with improvements in financial ratios.

The results of the fourth quarter also reflect this positive trend. EBITDA grew by 13.9 percent, reaching €60.7 million while net profits increased by 113.6 percent (€16.1 million).

In addition, and as confirmation of the positive performance of the company, the outlook for the future, the reduction in debt of €333 million that Sol Melia has achieved between 2004 and 2006, along with improvements to its credit rating, the Moody’s credit rating agency has classified the hotel chain as investment grade BAA3 with stable outlook.

The recovery in the performance of Spanish city hotels in 2006 and the positive trends seen in company resort hotels, particularly in Spain and the Dominican Republic, boosted results in the three hotel divisions, with overall RevPAR increasing by 7.5 percent.

Sol Melia Vacation Club has also increased the number of weeks it has sold by 70 percent, generating an increase in revenues of 51 percent. Sol Melia has also improved its financial results over the year by 20 percent.