Dalata Hotel Group Reports Lower Earnings, Shares Drop 4.4%
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Dalata Hotel Group's Earnings Report
Shares of Dalata Hotel Group (IR: DHG) faced a drop recently after the company revealed its earnings for the first half of the year. The results showed a slight disappointment compared to market forecasts, prompting concerns among investors.
Trading Overview
As of the morning trading session, Dalata's shares were down by 4.4%, trading at approximately €4.160. Investors noted the company's total sales for this period reached around €302 million. While this figure marks a 6% increase from the previous year, it falls short of the anticipated €309 million, highlighting a potential slowdown in growth momentum.
Financial Performance Breakdown
Dalata's adjusted EBITDA came to roughly €108 million, slightly under the consensus estimate of €110 million. Notably, the company had earlier indicated that they expected at least €105 million in EBITDA. This ongoing trend of lower-than-expected earnings could raise questions about the company’s future performance.
Executive Insights
Dermot Crowley, the CEO of Dalata Hotel Group, commented on the situation, mentioning that recent trading has not lived up to expectations. He noted a shift towards more cautious spending patterns among domestic customers in both Ireland and the UK.
Net Income Analysis
The net income reported was about €36 million, falling short of the consensus estimate of €40 million. This discrepancy was attributed to higher-than-expected depreciation costs and various adjusting items, including an impairment charge nearing €3 million. Such factors contribute to the ongoing scrutiny of the company's financial health.
Future Outlook
Looking forward, Dalata provided updates on its trading performance for July and August, indicating that the like-for-like Revenue Per Available Room (RevPAR) was 1% ahead of levels seen in 2023. Despite the solid demand from corporate and international sectors, the domestic market appears to have softened, particularly outside of special events.
Analysts' Perspectives
UBS analysts weighed in, highlighting a robust demand for services, particularly in corporate and international aspects. However, they also emphasized the need for vigilance in the domestic market, which remains temperate, apart from spikes during events.
Frequently Asked Questions
What led to the decline in Dalata's share price?
The decline was primarily due to the company's first half earnings report, which fell short of market expectations, prompting investor concerns.
How much did Dalata's total sales amount to?
Dalata reported total sales of approximately €302 million for the first half of 2024, which was below the expected €309 million.
What is Adjusted EBITDA, and how did it perform for Dalata?
Adjusted EBITDA for Dalata stood at around €108 million, slightly below the consensus estimate of €110 million.
What insights did the CEO provide about the company's trading environment?
CEO Dermot Crowley indicated that recent trading has been softer than expected, signaling a shift to more cautious spending by domestic customers in Ireland and the UK.
What is the outlook for Dalata Hotel Group's RevPAR?
Dalata reported that like-for-like RevPAR was 1% above 2023 levels, reflecting some positive developments amidst overall cautious domestic trends.
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