Accor posts €599m loss

The French hotel group Accor said on Wednesday it had suffered a net loss of 599 million euros ($804 million) last year owing to the sale of the US budget chain Motel 6, and said it would seek to generate 100 million euros in savings over the next two years to remain competitive. Stripping out exception items the company said its results were solid, with revenue up by 2.7 percent on a like-for-like basis to 5.65 billion euros as rates for rooms increased steadily. On a headline basis it dropped by 8 percent due to the disposal of Motel 6, which Accor sold to the Blackstone investment fund in October for $1.9 billion (1.4 billion euros). Operating profit as measured by earnings before tax and recurring items rose by 4.1 percent on a like-for-like basis to 468 million euros. Accor said net profit would have been 80 million euros if not for the impact of the Motel 6 disposal. The company reaffirmed its strategy of making a swift shift to emerging markets and having most of its hotels under franchise and management contracts. Accor said by the end of 2016 it aimed to have half of earnings before interest and tax from emerging markets, compared to 15 percent in 2011. By the same date it aims to have 40 percent of its hotel rooms run under franchise agreements, 40 percent under management contracts, and only 20 percent in owned or leased hotels. The hotel group said the asset management plan would help it reduce its adjusted net debt by 2 billion euros. Accor also confirmed it aimed to add 30,000 rooms per year not including acquisitions and keep its operating margin above 15 percent. It said it added a record 38,000 rooms in 2012, 85 percent of which were under franchise or management contracts. The company is present in 92 countries with nearly 3,500 hotels and 450,000 rooms. In 2012 the company said revenue in Europe held steady overall, led by good performance in capital cities, while the situation in southern Europe remained difficult. Accor said business in emerging markets remained robust. The company said it was launching a programme to generate 100 million euros in savings in 2013 and 2014 "in response to the structural increase in operational costs" and "a more competitive market environment". The company's board proposed a dividend of 0.76 euros per share for 2012, an increase of 17 percent from 2011, when it posted a net profit of 27 million euros. Accor's shares were down 3.2 percent in morning trading to 28.11 euros while the Paris market was flat overall.