Market Overview

Belmond Ltd. Reports Third Quarter 2017 Results

Share:
  • Revenue of $183.0 million, down $0.7 million from the prior-year
    quarter; down $3.8 million or 2% on a constant currency basis; up $9.6
    million or 6% on a constant currency basis excluding Brazil
  • Net earnings attributable to Belmond Ltd. of $7.8 million compared
    with $22.9 million for the prior-year quarter
  • Adjusted EBITDA of $62.2 million, down $3.5 million or 5% from the
    prior-year quarter; down $4.5 million or 7% on a constant currency
    basis
  • Adjusted EBITDA excluding Brazil up $4.6 million or 8% from the
    prior-year-quarter on a constant currency basis
  • Adjusted net earnings from continuing operations of $15.5 million,
    compared with $23.3 million for the prior-year quarter
  • Same store revenue per available room ("RevPAR") down 1% from the
    prior-year quarter; down 3% on a constant currency basis; up 6% on a
    constant currency basis excluding Brazil
  • Launches new website and brand campaign "The Art of Belmond"

Belmond Ltd. (NYSE:BEL) (the "Company"), owners, part-owners or
managers of 47 luxury hotel, restaurant, train and river cruise
properties, including one scheduled for a 2018 opening in London, which
operate in 24 countries, today announced its results for the third
quarter ended September 30, 2017.

Roeland Vos, president and chief executive officer, remarked: "Our
underlying operational performance continued to advance through the
third quarter of 2017. Notable year-over-year growth was again recorded
in our European hotels, with good demand for our properties in Italy,
Spain and Russia continuing from the first half of the year. We have
been particularly pleased with the ongoing strength of our safaris and
portfolio of trains and cruises worldwide, including Belmond Grand
Hibernian, which we launched in the same period last year.

"Challenging conditions in Brazil this year, coupled with the Olympics
taking place in the third quarter of last year, resulted in a
significant fall in EBITDA from that country, albeit mitigated by a
number of cost reduction initiatives. Economic data point to a gradual
improvement in the Brazilian economy, and we expect to see a moderate
improvement in results from next year. Elsewhere, we are heartened that
enhanced revenue-driving initiatives coupled with healthy demand has
seen EBITDA for the portfolio increase, with adjusted EBITDA excluding
Brazil up 8%.

"A number of key projects were delivered in the third quarter and serve
as examples of our continued progress against our strategic growth plan.
Our new website went live, as scheduled, and we continued to make good
progress with our CRM program. Our exciting new brand campaign 'The Art
of Belmond' launched as planned, supported by global media and marketing
activities to drive even greater brand awareness. We look forward to the
benefit of all these initiatives as we move into next year.

"Looking ahead, as we factor in the increased headwinds we have been
experiencing in Brazil we expect to come in at the low end of our
previously guided range for constant currency RevPAR growth and now
expect to finish the year with growth of between 0% and 2%."

Third Quarter 2017 Operating Results

Revenue for the third quarter of 2017 was $183.0 million, a $0.7 million
decrease from revenue for the third quarter of 2016. In constant
currency, revenue for the third quarter of 2017 decreased $3.8 million
or 2% from the third quarter of 2016. The year-over-year decrease comes
principally from the Company's two hotels in Brazil which have been
impacted by the political and economic instability in the country
coupled with a comparison period when both hotels recorded exceptionally
high revenue as a result of Rio de Janeiro hosting the Summer Olympics.
Excluding Brazil, revenue for the third quarter of 2017 increased $9.6
million or 6% on a constant currency basis from the third quarter of
2016.

Same store RevPAR for owned hotels for the third quarter of 2017
decreased 1% from the prior-year quarter. On a constant currency basis,
same store RevPAR for owned hotels decreased 3% from the prior-year
quarter as a result of a 2 percentage point decrease in occupancy offset
by a 2% increase in average daily rate ("ADR").

Net earnings attributable to Belmond Ltd. for the third quarter
of 2017 were $7.8 million ($0.08 per common share), which compared to
net earnings attributable to Belmond Ltd. of $22.9 million ($0.23 per
common share) for the third quarter of 2016.

Adjusted EBITDA for the third quarter of 2017 was $62.2 million, a $3.5
million or 5% decrease from adjusted EBITDA of $65.7 million for the
third quarter of 2016. In constant currency, adjusted EBITDA for the
third quarter of 2017 decreased $4.5 million or 7% from the third
quarter of 2016. Excluding Brazil, adjusted EBITDA for the third quarter
of 2017 on a constant currency basis increased $4.6 million or 8% from
the third quarter of 2016.

Adjusted net earnings from continuing operations for the third quarter
of 2017 were $15.5 million ($0.15 per common share), a $7.8 million
decrease from adjusted net earnings from continuing operations of $23.3
million ($0.23 per common share) for the third quarter of 2016.

In September the islands of Anguilla and St Martin were hit by
Hurricanes Irma and Jose when both Belmond La Samanna on St Martin and
Belmond Cap Juluca on Anguilla were closed for the season. While there
is still great uncertainty associated with St Martin and the speed of
its recovery, based on our preliminary assessment, we anticipate that
Belmond La Samanna will re-open in the fourth quarter of 2018. Belmond
Cap Juluca is undergoing planned renovations and we also currently
expect to re-open the resort in the fourth quarter of 2018.

Both properties are included in Belmond's global insurance program which
provides a combined property damage and twelve month business
interruption cover of $30.0 million. In addition, Belmond La Samanna has
a separate property damage insurance policy of Euro 4.9 million ($5.8
million) covering the eight villas at the resort.

We have made preliminary assessments regarding the nature and extent of
the damage sustained and we are preparing the insurance claim. Based on
our preliminary estimate at this time, we anticipate that the property
damage elements of the claim alone could absorb the available cover,
which therefore would not be sufficient to cover business interruption
claims of approximately $8.0 million to $10.0 million over the next 12
months. A deductible of $1.3 million has been expensed in the third
quarter.

The Company also believes this situation presents an opportunity to
re-examine proposed capital expenditures for Belmond Cap Juluca and
Belmond La Samanna, potentially increasing the scope of the projects but
also increasing the impact of the ultimate build-outs. This
re-evaluation, which will continue to be updated, is subject to a number
of uncertainties, such as the speed of the recovery of St Martin and
Anguilla and the impact of the hurricane on fuel, transportation and
labor prices over the coming year.

During the quarter, the Company agreed to sell its shares in Northern
Belle Limited, which owns the Belmond Northern Belle rolling stock, for
£2.5 million ($3.4 million) to a joint venture that operates other rail
charter operations in the UK. This business was operating at a
break-even level of EBITDA and was considered non-core to our trains and
cruises segment. This sale closed on November 2, 2017 and no gain or
loss is expected to be recorded upon completion.

In October 2017, the Company provided notice of termination to the owner
of Belmond Orcaella in respect of its charter agreement that is to be
effective by early November. This business was operating at a loss and
in the nine months to September 30, 2017 had contributed an adjusted
EBITDA loss of $0.8 million. The Company continues to own its Road to
Mandalay vessel and to operate that cruise business in Myanmar.

Recent Company Highlights

  • Unveils new Global Brand Campaign to drive brand awareness - On
    October 10, 2017, ‘The Art of Belmond' campaign launched globally with
    print and digital advertising supported by targeted social media and
    display marketing in key markets. Media events were held in core
    strategic cities: New York, London and Rio de Janeiro. Early results
    have been encouraging and the campaign will be unveiled in China later
    this month.
  • Launches new website bringing the brand's new visual identity to
    life online
    - On September 23, 2017, the Company's new
    cloud-hosted website went live with fully refreshed content,
    completing the first phase of this project. The Company launched the
    new brand campaign across the site in mid-October. The next phase will
    include an overhaul of the booking engine, which will unlock
    cross-selling and upselling opportunities for each of our assets. The
    booking engine is expected to be fully rolled out in the fourth
    quarter and the integration of customer profiles is also expected to
    complete before year end.
  • Continues to deliver projects in line with strategic reinvestment
    program
    - The full refurbishment of the Pergula restaurant at
    Belmond Copacabana Palace was completed in mid-October and included a
    renovation of the outdoor dining, bar and kitchen. The Company's
    long-term commitment to this strategically significant market remains
    unchanged and this investment underlines the Company's confidence in
    the future recovery of the asset. This iconic hotel is now well
    positioned to capitalise once the market recovers.
  • Further strengthens development team - On September 11, 2017,
    in line with its strategic growth plan, the Company expanded its
    development team in Asia with the appointment of Sandeep Jain,
    Director of Development, who joins the Company with deep experience in
    the Asian development market from his tenure with other leading luxury
    hotel operators. A further key appointment in the Americas region is
    expected to be made in due course and will complete the resource
    requirement for the Company's footprint expansion.
  • Iconic trains involved with two Hollywood Movies - On November
    3, 2017, ‘Murder on the Orient Express' was released. Belmond
    partnered with 20th Century Fox Productions on the film adaptation,
    with carriages from the Company's Venice-Simplon-Orient Express luxury
    train business part of the story's heritage. Additionally, the
    Belmond British Pullman features in Paddington Bear 2, to be released
    November 10, 2017.
  • Secures brand recognition at top industry Awards - On October
    30, 2017, Belmond was awarded the prize for 'Excellence in Luxury
    Leisure' at the 21st annual Luxury Briefing Awards. In the same month,
    Belmond Cipriani was voted as the best hotel in Italy in the Conde
    Nast Traveller Awards (US), and the Inn at Perry Cabin by Belmond was
    recognized as the Top Resort in New York and the Mid-Atlantic.

Third Quarter 2017 Business Unit Results

Owned hotels:

Europe:
For the third quarter of 2017, revenue from owned
hotels was $96.7 million, an increase of $4.4 million or 5% from $92.3
million for the third quarter of 2016. In constant currency, revenue for
the region for the third quarter of 2017 increased $2.6 million or 3%
from the prior year quarter primarily due to a $1.8 million or 3%
revenue increase for the Company's Italian hotels and a $0.9 million or
11% increase at Belmond La Residencia, Mallorca, Spain. Revenue growth
for the Company's Italian hotels was largely driven by the performances
of Belmond Hotel Cipriani, Venice, Italy, which benefited from the
Biennale Arts Festival that takes place every other year in Venice, and
Belmond Hotel Splendido, Portofino, Italy, which saw an increase in
rates year-over-year following the addition of balconies to twelve of
its rooms in March 2017. Growth in revenue at Belmond La Residencia was
primarily due to an increase in rates following the addition of six new
suites.

In constant currency, same store RevPAR for owned hotels in the region
increased 6% from the prior-year quarter as a result of an 8% increase
in ADR offset by a 2 percentage point fall in occupancy.

Adjusted EBITDA for the region for the quarter of $48.7 million
represented an increase of $3.1 million or 7% from $45.6 million for the
third quarter of 2016. In constant currency, revenue for the region for
the third quarter increased $2.8 million or 6% from the prior year
quarter mainly due to a $2.6 million or 7% increase in adjusted EBITDA
at the Company's Italian hotels and a $0.6 million or 14% increase in
adjusted EBITDA at Belmond La Residencia, Mallorca.

North America:
Revenue from owned hotels for the third
quarter of 2017 was $32.9 million, up $2.3 million or 8% from $30.6
million for the third quarter of 2016. In constant currency, revenue for
the region for the third quarter of 2017 increased $2.3 million or 8%
from the prior year quarter primarily due to revenue growth of $0.7
million or 4% at Belmond Charleston Place, Charleston, South Carolina,
and $1.5 million from the newly acquired Belmond Cap Juluca, Anguilla.
Belmond Charleston Place continued to benefit from group business and
also saw an increase in demand from leisure travelers attracted to the
solar eclipse in August. However, stronger year-over-year growth was
hindered by cancellations after the South Carolina Governor's
declaration of a state of emergency in advance of Hurricane Irma
reaching the state, resulting in $1.2 million in lost revenue.

In constant currency, same store RevPAR for owned hotels in the region
increased 2% from the prior-year quarter due to a 5% increase in ADR
offset by a 2 percentage point decrease in occupancy.

Adjusted EBITDA for the region for the quarter was $2.3 million, a
decrease of $0.9 million or 28% from $3.2 million for the third quarter
of 2016. In constant currency, adjusted EBITDA for the region for the
third quarter of 2017 decreased $1.0 million or 31% primarily as a
result of $0.7 million in losses at Belmond Cap Juluca that were
anticipated in its seasonal quiet period prior to closure for renovation
at the end of August 2017.

Rest of world:
Revenue from owned hotels for the third
quarter of 2017 was $26.8 million, a decrease of $10.2 million or 28%
from $37.0 million for the third quarter of 2016. In constant currency,
revenue for the third quarter of 2017 decreased $12.0 million or 32%
from the prior year quarter, principally as a result of decline in
revenue of $13.5 million or 56% at the Company's two Brazilian
properties. This resulted from a combination of exceptionally high
revenue in the third quarter of 2016 due to the Summer Olympics held in
Rio de Janeiro and the impact in the third quarter of 2017 of continued
political and economic instability in the country. This was partially
offset by an increase in revenue of $0.4 million or 13% at Belmond
Safaris, Botswana which benefited from refurbishment in 2016 and 2017
that has been well received by the media and guests. Additionally,
revenue at Belmond La Résidence d'Angkor, Siem Reap, Cambodia,
contributed a $0.6 million increase in revenue following a full
renovation of the property in 2016.

In constant currency, same store RevPAR for owned hotels decreased 31%
from the prior-year quarter as a result of a 5 percentage point decrease
in occupancy and 23% decrease in ADR.

Adjusted EBITDA for the region for the quarter of $3.5 million decreased
$7.8 million or 69% from adjusted EBITDA of $11.3 million for the
prior-year quarter. In constant currency, adjusted EBITDA for the region
decreased $8.5 million or 75% from the prior-year quarter largely as a
result of an adjusted EBITDA decrease of $9.1 million or 104% at the
Company's two Brazilian properties.

Owned trains & cruises:
Revenue
for the third quarter of 2017 was $23.7 million, up $4.5 million or 23%
from $19.2 million for the third quarter of 2016. In constant currency,
revenue increased $4.9 million or 26% primarily as a result of the
Belmond Grand Hibernian train in Ireland, which commenced its first full
year of operations in April 2017 and recorded $3.2 million of revenue
for the third quarter. Additionally, the Belmond Royal Scotsman train in
Scotland grew revenue by $1.1 million or 39% year-over-year following
high demand and the addition of a spa car and four new berths.

Adjusted EBITDA for the quarter was $5.4 million, a $2.2 million or 69%
increase from adjusted EBITDA of $3.2 million for the third quarter of
2016 largely due to adjusted EBITDA growth for Belmond Royal Scotsman
and Belmond Grand Hibernian of $1.0 million and $0.7 million,
respectively.

Management fees:
Adjusted
EBITDA from management fees for the third quarter of 2017 was $4.7
million, an increase of $0.1 million or 2% from $4.6 million for the
third quarter of 2016.

Share of pre-tax earnings from unconsolidated
companies
:
Adjusted share of pre-tax earnings from
unconsolidated companies for the third quarter of 2017 was $6.0 million,
a decrease of $0.7 million or 10% against $6.7 million for the third
quarter of 2016 due to an adjusted EBITDA decrease of $0.7 million or
13% for the Company's Peruvian train joint venture, PeruRail, as a
result of increases in fuel costs and other operating expenses.

Central overheads:
For
the third quarter of 2017, adjusted central overheads of $7.0 million
were $0.6 million or 9% higher than adjusted central overheads of $6.4
million for the prior-year quarter mainly due to increased development
and other corporate headcount to support the strategic growth plan.

Depreciation and amortization:
For
the third quarter of 2017, depreciation and amortization of $17.0
million was $3.9 million or 30% higher than depreciation and
amortization of $13.1 million for the prior-year quarter primarily as a
result of the recent completion of various capital projects and
accelerated depreciation expense to write-off assets that are expected
to be replaced.

Investments

The Company continued its strategy of disciplined re-investment in core
assets and projects with attractive forecasted returns. During the third
quarter of 2017, the Company invested a total of $15.6 million in its
portfolio, including $2.6 million on the full refurbishment of the
Pergula Restaurant at Belmond Copacabana Palace, Rio de Janeiro, Brazil;
$1.4 million at Belmond Casa de Sierra Nevada, Mexico for the renovation
of 37 rooms and the Andanza restaurant; $1.3 million at Belmond Villa
Sant' Andrea, Taormina Mare, Italy for the creation of three new suites
and a boardroom; $1.1 million at Belmond Mount Nelson Hotel, Cape Town,
South Africa largely for the refurbishment of the tea lounge, veranda
and terrace; and $1.4 million for corporate projects, which included the
Company's new enterprise resource planning system and website.

Balance Sheet

At September 30, 2017, the Company had total debt of $705.1 million and
cash balances of $212.5 million, resulting in total net debt of $492.6
million and a ratio of net debt to trailing-twelve-months adjusted
EBITDA of 4.0 times, which compared to net debt of $435.1 million and a
ratio of net debt to trailing-twelve-months adjusted EBITDA of 3.4 times
at December 31, 2016.

Outlook

The Company is providing the following RevPAR and other guidance for the
fourth quarter and full year 2017:

  Fourth Quarter 2017   Full Year 2017
 
Same store worldwide owned hotel RevPAR growth guidance (1)
 
On a constant currency basis 3% - 7% 0% - 2%
In U.S. dollars 10% - 14% 4% - 6%
 
Statement of operations guidance ($ millions)
 
Adjusted central overheads $6.9 - $7.9 $28.7 - $29.7
Adjusted share-based compensation $1.2 - $2.2 $6.3 - $7.3
Adjusted central marketing costs $1.7 - $2.7 $4.8 - $5.8
Depreciation and amortization (2) $14.5 - $15.5 $60.3 - $70.3
Interest expense (3) $7.8 - $8.8 $31.1 - $32.1
Tax expense (4) $(1.3) - $(2.3) $19.4 - $20.4
 
Cash flow guidance ($ millions)
 
Cash interest expense (3) $6.1 - $7.1 $27.8 - $28.8
Cash tax expense (5) $8.5 - $9.5 $19.5 - $20.5
Scheduled loan repayments (3) $1.1 - $2.1 $4.9 - $5.9
(1) Projected same store RevPAR growth for the fourth quarter ending
December 31, 2017 and full year ending December 31, 2017 excludes
the operations of Belmond Cap Juluca, Anguilla, British West Indies,
which was acquired in May 2017, and Belmond La Résidence d'Angkor,
Siem Reap, Cambodia, which closed for refurbishment from May to
November 2016.
(2) Projected depreciation and amortization expense for the fourth
quarter ending December 31, 2017 and full year ending December 31,
2017 includes forecasted accelerated depreciation related to an
expected renovation at one of the Company's properties, which
accelerated depreciation had not been assumed in the Company's prior
depreciation and amortization guidance.
(3) Interest expense, cash interest expense and scheduled loan
repayments guidance includes the impact of the Company's corporate
credit facility refinancing, which closed on July 3, 2017.
(4) Tax expense guidance includes the Company's share of provision
for income taxes of unconsolidated companies.
(5) Cash tax expense guidance does not include the Company's share
of provision for income taxes of unconsolidated companies.

BELMOND LTD.
EARNINGS RELEASE SCHEDULES
TABLE
OF CONTENTS

 
Statements of Condensed Consolidated Operations

9

Segment Information - Revenue and Adjusted EBITDA 10
Summary of Operating Information for Owned Hotels 11
Condensed Consolidated Balance Sheets 12
Reconciliations - Adjusted EBITDA and Adjusted Share of Pre-Tax
Earnings from Unconsolidated Companies
13
Reconciliations - Adjusted Net Earnings / (Losses) 14
Net Debt to Adjusted EBITDA 15

BELMOND LTD.
STATEMENTS OF CONDENSED CONSOLIDATED
OPERATIONS

(Unaudited)

                 
$ millions – except per share amounts  

Three months ended
September 30,

 

Nine months ended
September 30,

2017   2016 2017   2016
 
Revenue 183.0 183.7 443.7 435.6
 
Expenses:
Cost of services 72.0 72.0 184.8 186.5
Selling, general and administrative (1) 59.4 53.3 184.2 150.2
Depreciation and amortization 17.0 13.1 46.0 39.6
Impairment of property, plant and equipment 1.0 8.2 1.0
       
Total operating costs and expenses 148.4 139.4 423.2 377.3
 
Gain on disposal of property, plant and equipment 0.2 0.5 0.5 0.8
       
Earnings from operations 34.8 44.8 21.0 59.1
 
Gain on extinguishment of debt 1.2
Interest income 0.2 0.3 0.6 0.6
Interest expense (9.0 ) (7.8 ) (24.5 ) (23.0 )
Foreign currency, net (1.5 ) 1.4 (2.7 ) 9.2
       
Earnings / (losses) before income taxes and earnings from
unconsolidated companies, net of tax
24.5 38.7 (5.6 ) 47.1
 
Provision for income taxes (20.7 ) (20.4 ) (17.6 ) (25.1 )
       
Earnings / (losses) before earnings from unconsolidated companies,
net of tax
3.8 18.3 (23.2 ) 22.0
 
Earnings from unconsolidated companies, net of tax provision of
$2.0, $1.7, $4.1 and $3.9
3.9 4.6 7.8 7.7
       
Earnings / (losses) from continuing operations 7.7 22.9 (15.4 ) 29.7
 
Net earnings from discontinued operations, net of tax provision of
$Nil, $Nil, $Nil and $Nil
0.1 0.1
       
Net earnings / (losses) 7.7 22.9 (15.3 ) 29.8
 
Net losses / (earnings) attributable to non-controlling interests 0.1 (0.1 )
       
Net earnings / (losses) attributable to Belmond Ltd. 7.8   22.9   (15.3 ) 29.7  
 
EPS attributable to Belmond Ltd. 0.08 0.23 (0.15 ) 0.29
Weighted average number of shares – millions   102.33     101.75     102.11     101.53  
(1) Selling, general and administrative expenses include operating
costs of businesses plus central overheads, share-based compensation
and central marketing costs. Selling, general and administrative
expenses also included acquisition-related costs associated with the
May 26, 2017 acquisition of Cap Juluca of $0.3 million and $14.1
million for the three and nine months ended September 30, 2017,
respectively. Selling, general and administrative expenses also
included certain trains and cruises expenses of $1.7 million and
$6.0 million respectively that were reclassified from cost of
services in the three and nine months ended September 30, 2017.

BELMOND LTD.
SEGMENT INFORMATION
(Unaudited)

                 
$ millions  

Three months ended
September 30,

 

Nine months ended
September 30,

2017   2016 2017   2016
 
Revenue
 
Owned hotels
- Europe 96.7 92.3 180.8 172.8
- North America 32.9 30.6 115.2 108.2
- Rest of world 26.8   37.0   88.6   96.6  
Total owned hotels 156.4 159.9 384.6 377.6
Owned trains & cruises 23.7 19.2 50.6 47.1
Management fees 2.9 4.6 8.5 10.9
       
Revenue 183.0 183.7 443.7 435.6
 
Adjusted EBITDA
 
Owned hotels
- Europe 48.7 45.6 71.5 66.4
- North America 2.3 3.2 21.8 21.7
- Rest of world 3.5   11.3   15.9   24.9  
Total owned hotels 54.5 60.1 109.2 113.0
Owned trains & cruises 5.4 3.2 5.3 4.0
Management fees 4.7 4.6 11.5 10.9
Share of pre-tax earnings from unconsolidated companies 6.0   6.7   11.9   12.1  
70.6 74.6 137.9 140.0
 
Central overheads (7.0 ) (6.4 ) (21.7 ) (19.4 )
Share-based compensation (1.5 ) (2.1 ) (5.0 ) (5.9 )
Central marketing costs 0.1 (0.4 ) (3.2 ) (3.0 )
       
Adjusted EBITDA   62.2     65.7     108.0     111.7  

BELMOND LTD.
SUMMARY OF OPERATING INFORMATION FOR
OWNED HOTELS

                 
 

Three months ended
September 30,

   

Nine months ended
September 30,

2017   2016   2017   2016
 
Room Nights Available
Europe 86,817 86,112 214,135 213,056
North America 66,872 62,986 198,270 192,752
Rest of world 94,392 94,944   280,818 282,008
Worldwide 248,081 244,042 693,223 687,816
 

Room Nights Sold

Europe 66,974 68,102 143,262 142,965
North America 43,210 42,246 134,914 132,518
Rest of world 43,767 46,985   144,944 152,872
Worldwide 153,951 157,333 423,120 428,355
 
Occupancy
Europe 77% 79% 67% 67%
North America 65% 67% 68% 69%
Rest of world 46% 49% 52% 54%
Worldwide 62% 64% 61% 62%
 
ADR (in U.S. dollars)
Europe 928 839 791 731
North America 383 359 432 418
Rest of world 376 479 378 390
Worldwide 618 603 535 512
 
RevPAR (in U.S. dollars)
Europe 716 664 529 490
North America 248 241 294 287
Rest of world 174 237 195 211
Worldwide 383 389 327 319
 
Same Store RevPAR (in U.S. dollars) (1)
Europe 716 664 529 490
North America 247 241 294 287
Rest of world 181 252 201 219
Worldwide 393 397 332 325
 

Same Store RevPAR (% change)

U.S.
dollar

Constant
currency

U.S.
dollar

Constant
currency

Europe 8% 6% 8% 7%
North America 2% 2% 2% 3%
Rest of world (28)% (31)% (8)% (16)%
Worldwide   (1)%   (3)%     2%   —%
(1) Same store RevPAR data for the three and nine months ended
September 30, 2017 and September 30, 2016 excludes the operations of
Belmond Cap Juluca, which was acquired in May 2017, and Belmond La
Résidence d'Angkor, which closed for refurbishment in May 2016 and
re-opened in November 2016.

BELMOND LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

         
$ millions   September 30,   December 31,
2017 2016
 
Assets
Cash 205.4 153.4
Restricted cash 6.4 1.8
Accounts receivable 43.0 25.8
Due from unconsolidated companies 14.1 12.2
Prepaid expenses and other 13.3 12.3
Inventories 23.9 23.9
Assets held for sale 3.8
   
Total current assets 309.9 229.4
 
Property, plant & equipment, net of accumulated depreciation 1,167.5 1,074.7
Investments in unconsolidated companies 83.1 79.3
Goodwill 125.1 113.3
Other intangible assets 20.3 13.9
Other assets 12.5 13.5
   
Total assets (1) 1,718.4 1,524.1
 
Liabilities and Equity
Accounts payable 16.3 16.4
Accrued liabilities 98.8 69.0
Deferred revenue 38.6 31.3
Liabilities held for sale 0.9
Current portion of long-term debt and capital leases 6.8 5.3
   
Total current liabilities 161.4 122.0
 
Long-term debt and obligations under capital leases 698.3 585.8
Liability for pension benefit 0.4 1.4
Deferred income taxes 133.2 122.3
Other liabilities 1.0 5.4
Liability for uncertain tax positions 0.4 0.3
   
Total liabilities (2) 994.7 837.2
 
Shareholders' equity 723.3 686.5
Non-controlling interests 0.4   0.4
Total equity 723.7 686.9
   
Total liabilities and equity   1,718.4     1,524.1
(1) Balance at September 30, 2017 includes $207.7 million (December
31, 2016 - $210.3 million) of assets of consolidated variable
interest entities ("VIEs") that can only be used to settle
obligations of the VIEs.
(2) Balance at September 30, 2017 includes $122.3 million (December
31, 2016 - $121.6 million) of liabilities of consolidated VIEs whose
creditors have no recourse to Belmond Ltd.

BELMOND LTD.
RECONCILIATIONS - ADJUSTED EBITDA AND
ADJUSTED
SHARE OF PRE-TAX EARNINGS FROM UNCONSOLIDATED COMPANIES

(Unaudited)

                 
$ millions

Three months ended
September 30,

 

Nine months ended
September 30,

2017   2016 2017   2016
 
Adjusted EBITDA reconciliation:
 
Earnings / (losses) from continuing operations 7.7 22.9 (15.4 ) 29.7
Depreciation and amortization 17.0 13.1 46.0 39.6
Gain on extinguishment of debt (1.2 )
Interest income (0.2 ) (0.3 ) (0.6 ) (0.6 )
Interest expense 9.0 7.8 24.5 23.0
Foreign currency, net 1.5 (1.3 ) 2.7 (9.1 )
Provision for income taxes 20.7 20.4 17.6 25.1
Share of provision for income taxes of unconsolidated companies 2.1   1.7   4.1   3.9  
57.8 64.3 78.9 110.4
 
Restructuring and other special items (1) 4.3 0.9 7.3 1.1
Acquisition-related costs (2) 0.3 14.1
Gain on disposal of property, plant and equipment (0.2 ) (0.5 ) (0.5 ) (0.8 )
Impairment of property, plant and equipment 1.0 8.2 1.0
       
Adjusted EBITDA   62.2     65.7     108.0     111.7  
(1) Represents adjustments for insurance deductibles and losses
while Belmond Cap Juluca and Belmond La Samanna are closed following
the impact of Hurricanes Irma and Jose, restructuring, severance and
redundancy costs, pre-opening costs and other items, net.
(2) Represents professional fees incurred in preliminary design and
planning, structuring, assessment of financing opportunities, legal,
tax, accounting and engineering due diligence and the negotiation of
the purchase and sale agreements, and other ancillary documents,
with the principal owner and leaseholder, together with three owners
of villas and separate subleases, as well as a memorandum of
understanding and ground lease with the Government of Anguilla.
         
$ millions  

Three months ended
September 30,

 

Nine months ended
September 30,

2017   2016 2017   2016
 
Adjusted share of pre-tax earnings from unconsolidated companies
reconciliation:
 
Earnings from unconsolidated companies (1) 3.9 4.6 7.8 7.7
Share of provision for income taxes of unconsolidated companies 2.1 1.7 4.1 3.9
Other adjusting items   0.4     0.5
 
Adjusted share of pre-tax earnings from unconsolidated companies   6.0     6.7     11.9     12.1
(1) Represents the Company's share of earnings from unconsolidated
companies.

BELMOND LTD.
RECONCILIATIONS - ADJUSTED NET
EARNINGS / (LOSSES)

(Unaudited)

                 
$ millions – except per share amounts  

Three months ended
September 30,

 

Nine months ended
September 30,

2017   2016 2017   2016
 
Adjusted net earnings reconciliation:
 
Earnings / (losses) from continuing operations 7.7 22.9 (15.4 ) 29.7
Restructuring and other special items (1) 4.3 0.9 7.3 1.1
Acquisition-related costs (2) 0.3 14.1
Gain on disposal of property, plant and equipment (0.2 ) (0.5 ) (0.5 ) (0.8 )
Impairment of property, plant and equipment 1.0 8.2 1.0
Gain on extinguishment of debt (3) (1.2 )
Accelerated depreciation 1.8 1.8 1.3
Interest adjustments 0.6 0.6
Foreign currency, net (4) 1.4 (1.4 ) 2.8 (9.2 )
Tax-related adjustments 0.6
Income tax effect of adjusting items (5) (0.4 ) 0.4 (0.4 ) 1.7
       
Adjusted net earnings from continuing operations 15.5   23.3   18.5   24.2  
 
EPS from continuing operations 0.07 0.22 (0.15 ) 0.29
Adjusted EPS from continuing operations 0.15 0.23 0.18 0.24
Weighted average number of shares (millions)   102.33     101.75     102.11     101.53  
(1) Represents adjustments for insurance deductibles and losses
while Belmond Cap Juluca and Belmond La Samanna are closed following
the impact of Hurricanes Irma and Jose, restructuring, severance and
redundancy costs, pre-opening costs and other items, net.
(2) Represents professional fees incurred in preliminary design and
planning, structuring, assessment of financing opportunities, legal,
tax, accounting and engineering due diligence and the negotiation of
the purchase and sale agreements, and other ancillary documents,
with the principal owner and leaseholder, together with three owners
of villas and separate subleases, as well as a memorandum of
understanding and ground lease with the Government of Anguilla.
(3) Represents $4.0 million negotiated discount on repayment less
$2.8 million tax indemnification provided to partners in respect of
such discount.
(4) Non-cash item arising from the translation of certain assets and
liabilities denominated in currencies other than the functional
currency of the respective entity.
(5) Represents income tax effect of adjusting items by applying the
applicable statutory tax rate to the adjusting items.

BELMOND LTD.
NET DEBT TO ADJUSTED EBITDA
(Unaudited)

         
$ millions - except ratios   Twelve months ended and as at

September 30,
2017

 

December 31,
2016

 
Cash
Cash and cash equivalents 205.4 153.4
Restricted cash (including $0.7 million and $0.8 million classified
within long-term other assets on the balance sheet for 2017 and
2016, respectively)
7.1 2.6
   
Total cash 212.5 156.0
 
Total debt
Current portion of long-term debt and capital leases 6.8 5.3
Long-term debt and obligations under capital leases (1) 698.3 585.8
   
Total debt 705.1 591.1
 
Net debt 492.6   435.1
 
Adjusted EBITDA 124.5 128.2
 
Net debt / adjusted EBITDA   4.0   3.4
(1) Long-term debt is after the deduction of unamortized debt
issuance costs and discount on secured term loans.
         
$ millions  

For the twelve months ended
September 30, 2017

   
Trailing twelve months adjusted EBITDA calculation:
 
Adjusted EBITDA for the twelve months ended December 31, 2016 (1) 128.2
Less: Adjusted EBITDA for the nine months ended September 30, 2016 (111.7 )
Plus: Adjusted EBITDA for the nine months ended September 30, 2017 108.0  
 
Adjusted EBITDA for the trailing twelve months       124.5  
(1) As disclosed in the Company's 2016 earnings news release issued
on February 27, 2017.

Conference Call
Belmond Ltd.
will conduct a conference call on Tuesday, November 7, 2017 at 10:00
a.m. EST (3:00 p.m. GMT). Participants may listen to a simultaneous
webcast of the conference call by accessing the presentations and events
section of the Company's investor relations website at: investor.belmond.com/presentations-and-events.

Alternatively, participants may dial into the call by using any of the
following telephone numbers: +1 866 966 9439 (U.S. toll free), +44
(0)145 255 5566 (standard international access) or 0800 694 0257 (U.K.
free phone). The conference ID number is 96347399. A re-play of the
conference call will be available by telephone until 1:00 p.m. EST on
Tuesday, November 14, 2017 and can be accessed by calling +1 866 247
4222 (U.S. toll free), +44 (0)145 255 0000 (standard international
access) or 0800 953 1533 (U.K. free phone). The conference ID number is
96347399. A replay will also be available on the Company's website: investor.belmond.com.

About Belmond Ltd.
Belmond (belmond.com)
is a global collection of exceptional hotel and luxury travel adventures
in some of the world's most inspiring and enriching destinations.
Established over 40 years ago with the acquisition of Belmond Hotel
Cipriani in Venice, its unique and distinctive portfolio now embraces 47
hotel, rail and river cruise experiences, including one scheduled for a
2018 opening in London, in many of the world's most celebrated
destinations. From city landmarks to intimate resorts, the collection
includes Belmond Grand Hotel Europe, St. Petersburg; Belmond Copacabana
Palace, Rio de Janeiro; Belmond Maroma Resort & Spa, Riviera Maya; and
Belmond El Encanto, Santa Barbara. Belmond also encompasses safaris,
seven luxury tourist trains, including the Venice
Simplon-Orient-Express, and two river cruises. Belmond also operates
‘21' Club, one of New York's most storied restaurants. Further
information on the Company can be found at investor.belmond.com.

Definitions
All references to
constant currency, which is a non-GAAP measure, represent a comparison
between periods excluding the impact of foreign exchange movements. The
Company calculates these amounts by translating prior-year results at
current-year exchange rates. The Company analyzes certain key financial
measures on a constant currency basis to better understand the
underlying results and trends of the business without distortion from
the effects of currency movements.

Revenue per available room ("RevPAR") is calculated by dividing room
revenue by room nights available for the period. Same store RevPAR is a
comparison of RevPAR based on the operations of the same units in each
period, by excluding the effect of any hotel acquisitions in the period
or major refurbishment where a property is closed for a full quarter or
longer. The comparison also excludes the effect of dispositions
(including discontinued operations) or closures. Management uses RevPAR
and same store RevPAR to identify trend information with respect to room
revenue and to evaluate the performance of a specific hotel or group of
hotels in a given period.

Average daily rate ("ADR") is calculated by dividing room revenue by
rooms sold for the period. Management uses ADR to measure the level of
pricing achieved by a specific hotel or group of hotels in a given
period.

Occupancy is calculated by dividing total rooms sold by total rooms
available for the period. Occupancy measures the utilization of a
hotel's available capacity. Management uses occupancy to measure demand
at a specific hotel or group of hotels in a given period.

Earnings before interest, taxes, depreciation and amortization
("EBITDA"), reflects earnings / (losses) from continuing operations
excluding interest, foreign exchange (a non-cash item), tax (including
tax on unconsolidated companies), depreciation and amortization.

Adjusted EBITDA is calculated by adjusting EBITDA for asset
acquisitions, leases and sales, disposals of assets and investments, and
certain other items (some of which may be recurring) that management
does not consider indicative of ongoing operations or that could
otherwise have a material effect on the comparability of the Company's
operations.

Adjusted net earnings / (losses) is calculated by adjusting earnings /
(losses) from continuing operations for foreign exchange (a non-cash
item), asset acquisitions, leases and sales, disposals of assets and
investments, and certain other items (some of which may be recurring)
that management does not consider indicative of ongoing operations or
that could otherwise have a material effect on the comparability of the
Company's operations.

Net debt is the sum of the Company's current portion of long-term debt
and capital leases and long-term debt and obligations under capital
leases minus the sum of the Company's cash, cash equivalents and
restricted cash. The Company measures long-term debt after deducting
unamortized debt issuance costs and discount on secured term loans.

Use of Non-GAAP Financial Measures
To
supplement the Company's consolidated financial statements presented in
accordance with U.S. generally accepted accounting principles ("U.S.
GAAP"), which are filed with the Securities and Exchange Commission
("SEC") as part of the Company's annual report on Form 10-K and interim
reports on Form 10-Q, management analyzes the operating performance of
the Company on the basis of adjusted EBITDA. Adjusted EBITDA is the
measure used by the Company's management team to assess the operating
performance of the Company's businesses and, as disclosed in Note 21 to
the financial statements and in Management's Discussion and Analysis of
the Company's periodic report beginning with the Form 10-Q for the
period ended March 31, 2017. Adjusted EBITDA is also presented on a
consolidated basis because management believes it helps our investors
evaluate the Company's profitability on a basis consistent with that of
its operating segments. Adjusted EBITDA is also a financial performance
measure commonly used in the hotel and leisure industry, although the
Company's EBITDA may not be comparable in all instances to that
disclosed by other companies. Adjusted EBITDA should not be considered
as an alternative to earnings from operations or net earnings under U.S.
GAAP for purposes of evaluating the Company's operating performance as
presented in the Company's consolidated financial statements filed with
the SEC.

Adjusted EBITDA, when presented on a consolidated basis, including the
items set forth in the Company's reconciliations tables, and adjusted
net earnings / (losses) of the Company are non-GAAP financial measures
and do not have any standardized meanings prescribed by U.S. GAAP.
Adjusted EBITDA provides useful information to investors about the
Company because it is not affected by non-operating factors such as
leverage (affecting interest expense), tax positions (affecting income
tax expense), the historical cost of assets (affecting depreciation
expense) and the extent to which intangible assets are identifiable
(affecting amortization expense). Adjusted EBITDA and adjusted net
earnings / (losses) are unlikely to be comparable to similar measures
presented by other companies, which may be calculated differently, and
should not be considered as an alternative to net earnings or any other
measure of performance prescribed by U.S. GAAP. Management considers
adjusted EBITDA and adjusted net earnings / (losses) to be meaningful
indicators of operations and uses them as measures to assess operating
performance. Adjusted EBITDA and adjusted net earnings / (losses) are
also used by investors, analysts and lenders as measures of financial
performance because, as adjusted in the described manner, the measures
provide a consistent basis on which the performance of the Company can
be assessed from period to period. However, these measures are not
intended to substitute for U.S. GAAP measures of Company performance as
reflected in the Company's consolidated financial statements filed with
the SEC.

EBITDA, adjusted EBITDA and adjusted net earnings / (losses) have
limitations as analytical tools. Some of these limitations are: they do
not reflect the Company's cash expenditures or future requirements for
capital expenditure or contractual commitments; they do not reflect
changes in, or cash requirements for, the Company's working capital
needs; they do not reflect interest expense, or the cash requirements
necessary to service interest or principal payments, on the Company's
debt; although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be replaced in
the future, and EBITDA and adjusted EBITDA do not reflect any cash
requirements for such replacements; and they are not adjusted for all
non-cash income or expense items that are reflected in the Company's
statements of cash flows.

Cautionary Statements
This news
release and related oral presentations by management contain, in
addition to historical information, forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
These include statements regarding the Company's three-point growth
strategy, future revenue, earnings, RevPAR, EBITDA and adjusted EBITDA,
statement of operations and cash flow outlook, investment plans, debt
refinancings, asset acquisitions, leases and sales, entry into
third-party management contracts, operating synergies and revenue
opportunities, operating systems, and benefits of the Company's brand
and similar matters that are not historical facts and therefore involve
risks and uncertainties. These statements are based on management's
current expectations and beliefs regarding future developments, are not
guarantees of performance and are subject to a number of uncertainties
and risks that could cause actual results to differ materially from
those described in the forward-looking statements. Factors that may
cause actual results, performance and achievements to differ from those
express or implied in the forward-looking statements include, but are
not limited to, those mentioned in the news release and oral
presentations, our ability to execute and achieve our three-point growth
strategy, future effects, if any, on the travel and leisure markets of
terrorist activity and any police or military response, varying customer
demand and competitive considerations, failure to realize expected hotel
bookings and reservations and planned real estate sales as actual
revenue, inability to sustain price increases or to reduce costs, rising
fuel costs adversely impacting customer travel and the Company's
operating costs, fluctuations in interest rates and currency values,
uncertainty of negotiating and completing any future asset acquisitions,
leases, sales and third-party management contracts, debt refinancings,
capital expenditures and acquisitions, inability to reduce funded debt
as planned or to obtain bank agreement to any future requested loan
agreement waivers or amendments, adequate sources of capital and
acceptability of finance terms, possible loss or amendment of planning
permits and delays in construction schedules for expansion projects,
delays in reopening properties closed for repair or refurbishment and
possible cost overruns, shifting patterns of tourism and business travel
and seasonality of demand, adverse local weather conditions, possible
challenges to the Company's ownership of its brands, the Company's
reliance on technology systems and its development of new technology
systems, changing global or regional economic conditions and weakness in
financial markets which may adversely affect demand, legislative,
regulatory and political developments (including the evolving political
situation in Ukraine and Brazil, in the United Kingdom in respect of its
withdrawal from the European Union and in the United States in respect
of its evolving immigration, tax and trade policies, and the resulting
impact of these situations on local and global economies, exchange rates
and on current and future demand), the threat or current transmission of
epidemics, infectious diseases, and viruses, such as the Zika virus
which may affect demand in Latin America, including the Caribbean, and
elsewhere, and possible challenges to the Company's corporate governance
structure. Further information regarding these and other factors that
could cause management's current expectations and beliefs not to be
realized is included in the filings by the Company with the U.S.
Securities and Exchange Commission. Except as otherwise required by law,
the Company undertakes no obligation to update or revise publicly any
forward-looking statement, whether due to new information, future events
or otherwise.

* * * * * *

Belmond Ltd., Canon's Court, 22 Victoria Street, P.O. Box HM1179,
Hamilton HM EX, Bermuda
investor.belmond.com

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