1Q11 Results. Highlights Revenues and Ebitda increase by 13.6% and 28.9% Profit & Loss Account. Operational Ratios. Interest Cover Ratios

Transcription

1 1Q11 Results Profit & Loss Account (million Euros) RevPAR % EBITDAR MARGIN 23.7% 22.1% 158 bp EBITDA MARGIN 17.8% 15.7% 211 bp EBT MARGIN 2.0% 0.4% 161 bp NET PROFIT MARGIN 1.6% 0.4% 119 bp Interest Cover Ratios EBITDA / Net Interest Expense 3.5x 3.6x -2.0% EBIT / Net Interest Expense 2.0x 1.5x 32.6% Stock Performance SOL VOLUME SOL LAST IBEX LAST Average Daily Volume 2011 ( ) Week High, May Week Low, June Market cap May 12 th 11 ( ) 1,647.3Mn / 2,339.0 Mn $ Bloomberg: SOL SM ; Reuters: SOL.MC Mar 11 Mar 10 % REVENUES % EXPENSES ( ex - Operating leases) % EBITDAR % Rental expenses % EBITDA % Depreciation and amortisation % EBIT % Total financial profit / (loss) (20.5) (15.2) -35.2% Profit/(loss) from equity investments (3.1) (0.8) % Continuing EBT % Discontinuing Operations Profit before taxes and minorities % Net Profit % Net Profit attributable % Operational Ratios 0 Highlights Revenues and Ebitda increase by 13.6% and 28.9% Results are explained by double digit growth in RevPAR, primarily explained by LatAm where US consumption is reinforcing both the Leisure and Business segments, together with the Canary Islands and European cities. The Canary Islands (RevPAR: +24.7%) are benefiting from political and social unrest in the Middle East and North Africa, while the performance of European cities (+10.3%) is due to the properties in Germany, Paris and London. Performance in the Spanish cities, especially in Tryp by Wyndham hotels, was sluggish in January/February but recovering in March/April. Figures for Q1 are partially skewed by the timing of the Easter Holiday (2010 Q1; 2011 Q2). Revenues include 16.7 mn derived from the sale of one property in Q1. In overall terms this evolution has led to an increase in total revenues of 13.6%, partially offset by the increase in total operating expenses mainly due to: 1) Higher rental expenses due to three sale & lease back operations; 2) Operational Expenses derived from the sale of the Tryp brand amounting to 1.4 mn; 3) a 2.7% increase in cost per stay partially due to the evolution of electricity, fuel and raw material prices. The Financial Result has gone up due to a increase of spreads in the framework of the forward start facility signed last August, together with an increase in Exchange Rate Differences that represent 2.6 mn negative. Better outlook in resorts. Robust summer bookings During the Easter holidays, although many reservations were made at the last minute, the Company achieved improvements both in occupancy and price. This has led Sol Meliá to post a +10.4% RevPAR increase in Spain for April. Regarding the Spanish cities, although prudence is required in light of the situation with domestic consumption and the elections in May, the Company foresees positive evolution in RevPAR for Q2 and Q3. Going into the summer season, the current booking position from European tour operators mainly from the UK and Central Europe and company-owned channels indicate a positive Q3 to date around 40% of the annual Hotel Ebitda in both occupancy and average price in Sol Meliá s resorts. Since it is early days for other feeder markets - Spain, Russia and Italy this trend is yet to be fully confirmed on the books. Taking into consideration that the Company has already sold more than 53% of what it sold in the whole of last year, the group is now able to work on improving yield management. Development Pipeline represents 11% of current portfolio Year to date, Sol Meliá has signed the addition of five hotels totalling 1,300 rooms, leading to a current pipeline of 30 new hotels with rooms, of which 88% are in the Upscale/Premium category, 88% under low capital-intensive formulas and 91% outside Spain.

2 Table of contents 1. Letter from the C.E.O. and Vice-Chairman Information on Operations Hotels Sol Meliá Vacation Club Leisure Real Estate Income Statement

3 1. Letter from the C.E.O. and Vice-Chairman Dear friend, no major changes in macro forecasts, increased risks, inflation of electricity, fuel and raw materials positive industry KPI s in Q1. RevPAR growth forecasted going further into the cycle Sol Meliá s RevPAR goes up by +11.5% in Q1 +3.4% in weeks sold and +5.5% qualified prospective buyers at (SMVC) Sol Meliá is releasing its first quarter 2011 results in an environment which has seen no major changes in the GDP forecast made by the International Monetary Fund for the advanced economies. One of the few exceptions is the upwards revision of Spanish GDP both for 2011 and On a global basis the IMF points out that risks have increased, focusing on electricity, fuel and raw material prices or financial stress on airlines due to fuel inflation, as well as other macroeconomic circumstances such as the financial stress on the periphery of the Euro zone, most recently in Greece, high unemployment rates, and the depreciation of the US dollar. As far as Travel & Tourism is concerned, figures as of March showed an improvement across the board in Europe, the Americas and Asia, with RevPAR increasing and double digit growth. Airlines have also posted increases so far in both passenger numbers and airplane capacity. In Spain, Exceltur a lobby group of 25 of Spain's major travel groups and companies has recently improved their estimate for Spanish Tourism GDP, forecasting an increase of +2.2% versus last year (+1.2% above its previous estimate made in January 2011). In Europe, the summer season demand from mainstream tour operators remains positive. According to international lodging analysts, the historical hotel trend line in a typical cycle points towards 16 to 26 quarters of rising RevPAR in Europe. This trend is likely to be protected by a limited supply of new hotel rooms coming on stream. As far as Sol Meliá is concerned, we have seen a progressive positive trend in RevPAR through the quarter on the back of the LatAm hotels and resorts primarily Mexico, Puerto Rico and the Dominican Republic -, the Canary Islands, and European gateway cities, i.e. London, Paris, Frankfurt, Milan. The performance of the Canary Islands where RevPAR has gone up by +24.7% -has been influenced by the social and political unrest in Northern Africa and the Middle East, and its perception as a safe haven, leading occupancies in February and March to reach 82.9% ( +19 occupancy points). This effect should be added to the previous increase of air capacity seen in the archipelago. All in all, RevPAR has increased by +11.5% in Q1 also within a framework of high guest satisfaction levels, as the rating has gone up to 80.3%. With regard to our Sol Melia Vacation Club (SMVC), the increases in weeks sold, revenue and qualified prospects were due principally to stronger results in our resorts in Cancun (Mexico), and to a somewhat lesser extent in Punta Cana (Dominican Republic). Throughout the Caribbean in general, we saw significant growth in upgrade activity from existing members and in the area of bi-annual sales, which combined with improvements in our capture rates of potential customers and overall growth in the closing efficiency of our sales operations, had a positive impact on results. During the first quarter of 2011, we have undertaken a number of important steps to increase the growth of our vacation club, not only in Spain, a destination which clearly benefits from the confidence and credibility of our brands, but also with the initiation of pre-sales programs for our soon-to-open resort in Playa del Carmen, Mexico. These initiatives, such as the launch of a new resort in the Spanish peninsula (Marbella), are designed to minimize the adverse impacts of the economic crisis and strengthen our base of operations to allow for increased future growth in the region. The operation of a vacation club component at the Melia Marbella Banus is a direct response to our members who have clearly indicated a preference for a vacation club alternative in the Spanish peninsula, not only in terms of our domestic Spanish market but also in other markets which we believe have excellent potential such as the British market. In terms of Playa Del Carmen, based on initial results we are seeing approximately 25% of the sales generated in the Cancun area being sales of this new product. 3

4 perspectives: comparatively better in the worldwide resorts more conservative in the Spanish cities, but solid in European Capitals positive booking position in the Spanish resorts. Price Strategy and Yield Management continues to be increasingly important Caribbean contribution to be increased with the opening of two resorts in Mexico Sol Meliá offset increases in Raw Materials costs with improvements F&B margins Continuing with the Hotel Business, in relation to the Easter holidays in April, the Company is happy to verify a rewarding performance in the Spanish resort destinations, principally the Canary Islands and Costa del Sol, even taking into consideration the bad weather conditions. Cancellations were very limited in some destinations/hotels. RevPAR in cities like Madrid, Seville and Valencia, and also in the Caribbean, has also been positive during the holiday period. RevPAR in April has gone up by +10.4% in Spain, also explained by the effect of the Iceland volcano eruption in April last year, plus the timing of the Easter Holiday which in 2010 fell in the first quarter, unlike this year. Going further into the second quarter, the performance of the major European cities is continuing to post a very positive performance, a trend that is forecasted to be maintained up until year end. In Spanish cities, we maintain a more conservative outlook, especially in those destinations more affected by Spanish consumer spending. This part of our business is where we have the lowest RevPAR evolution expectations, broadly in the medium to high range up until year-end, affected by events such as the municipal and autonomous community elections in May, and the events which occurred last year, i.e. Spanish Presidency of the European Community and high occupancy in airport hotels due to air flight disruptions. Regarding the second half of the year, if we look at the summer season, current bookings from European tour operators and, especially, our direct channels are pointing to a clear improvement versus 2010 in both volume and prices. This enables us to carry out more efficient yield management in the hotels. The Company points out that price strategy continues to be increasingly important.the evolution of feeder markets, especially the UK, the impact of the unrest in Northern Africa, and the reduced number of special offers made by Sol Meliá are behind the forecast so far. The trend remains to be confirmed in the Italian, Russian and, more importantly, Spanish feeder markets. In Latin America and the Caribbean, on a same exchange rate basis, the Company foresees a continuation of the trend in our destinations on the back not only of leisure demand, but also the meetings and incentives segment. Regarding the latter, we also see a positive trend in our Caribbean resorts in In relation to next year the negotiations with North American tour operators have resulted in positive terms for the Company. This is also expected to be the case when it comes to the meetings, incentives, congresses and events (MICE) whose bookings and requests for proposals (RFP) continue to strengthen. Within this context, we are happy to mention that later this year the Company will open two all-inclusive resorts (one for families with 512 rooms and one for adults with 394 rooms) in Playa del Carmen (Mexico), implying the reintroduction of the Paradisus brand in Mexico, currently one of the fastest growing destinations. Although these hotels will not open their doors for a good few months, they are already showing a healthy booking position, especially when it comes to the MICE segment. In addition, the announcement of a new resort in Costa Rica in July 2013 the Paradisus Papagayo Bay (300) will help solidify the Paradisus Resorts brand as a leader in the luxury all-inclusive market segment. All in all, current trading and outlook has somewhat improved as to the last quarterly report. On the cost side, for the whole year we must take into consideration some effects that already had an effect in Q1, i.e. the increase of operating expenses at the overheads level due to the Tryp by Wyndham franchise agreement that represent an increase of 3 million Euros for the whole year, an increase in rental expenses following the sale and lease back agreements for two hotels which when combined represent an additional impact of 6.5 million Euros versus We should also take into consideration the evolution of prices of electricity, fuel and raw materials in international markets and their potential impact on Food and Beverage margins. Nevertheless in Q1, Food and Beverage margins have improved by 119 basis points 4

5 Development Plan with emphasis in China Following with the development Plan we refer to on the front page of this report, we are happy to highlight the agreement to open a new hotel under a management contract in Indonesia in 2013, the five star Meliá Surabaya, increasing our presence in the Asia-Pacific region, where the main priority remains China. The expansion plans will continue to materialize mainly through local partners in order to develop further hotels & resorts. In this regard, we are happy to remind that Sol Meliá recently signed an agreement with Jin Jiang, the leading Chinese hotel chain and second largest travel agency group in China. The alliance with Jin Jiang lays the foundation for a long term partnership encompassing hotel development, marketing and sales, reservations systems and loyalty programmes. The partnership will focus in a first stage on 6 hotels managed by Jin Jiang in major Chinese cities and 6 hotels managed by Sol Meliá in major European capitals. The 12 hotels will be incorporated in both Companies respective owned distribution channels. alliance with Jin Jiang in China This strategic agreement will allow both chains to grow in the market in which the other enjoys competitive advantages through a joint growth strategy in China and Europe. Sol Meliá is already working on the incorporation of new hotels in cities and resorts in the country. It is important to point out that the adaptation of hotel services to the needs of Chinese and European guests is one of the major challenges for both companies. As far as development is concerned, Sol Meliá as a leading resort Company worldwide has recently widened its geographical reach in key resort destinations thanks to the signature of new management contracts in the Upscale/Premium segment in Cape Verde, Zanzibar (Tanzania) and Dubai. These establishments are currently open or will be throughout the year, adding to the leisure diversification strategy of the Company and increase in the ties with partners while reaffirming customer loyalty. Liquidity guarantees short and mid term maturities. IRS signed in 2009 and 2010, protects Company interests cost more efficient asset rotation going into the future In terms of liquidity, the Company has increased the amount of credit facilities that expired throughout the year. As occurred last year, exploiting the current market situation in which interest rates are particularly low, Sol Meliá works to maintain the weight of the fixed rate debt at approximately 70%. The interest rate swaps signed in an environment of low interest rates are now paying off with the recent rise of Euribor and the forecasts on its evolution therefore protecting the interest cost for the current year. Cash interest expense is forecasted to be around 4.5% in Financially speaking, considering current liquidity level up to March 2011, stands at close to million Euros, therefore guaranteeing short and medium-term debt repayments that represent million Euros for the remaining of the year and 2012 ( 87.1 million plus million). Strategically speaking, as previously discussed, the Company s senior management team is creating the basis for the Strategic Plan where the reinforcement of our role as a strong and reliable management company will be one of the priorities. Guest experience and the consolidation of brand equity will be a must in this regard, in addition to an appropriate approach to our people talent strategy. It is our commitment to strengthen our real estate management by revising the minimum required return on capital employed in Company owned hotels, therefore assuring a more efficient asset rotation model. In terms of expansion, the Company will continue to reinforce the markets mentioned before, i.e. China, Latin America, the Arab Gulf States, certain gateway cities in the US and European cities primarily via low capital intensive formulas and, when capital is required, primarily via joint ventures. Gabriel Escarrer Vice Chairman and CEO 5

6 2. Information on Operations 2.1. Hotels RevPAR for owned and leased hotels has increased by 11.5% during the first quarter of the year, mainly explained by the 7.1% increase in occupancy, while ARR also increased by +4.1%. Positive RevPAR evolution during the quarter is explained by the favourable evolution of occupancy rates (Jan: +5.1%, Feb: +7.2%, Mar: +8.5%). In terms of prices, the Company has improved its ARR by 4.1% in overall terms, achieving increases in all brands and in 58% of the hotels. Food & Beverage revenues have increased by 9.0% while F&B margin has increased by 119 bps up to 37.6%. Room revenues increased by 9.8% while room margin increased by 23 bps up to 66.7%. The overall effect is positive in light of GOP margins and the Ebitda margin, with increases of 108 and 52 bps respectively. RevPAR for the Sol brand (100% resort, 100% Spain) has presented the best performance compared with the whole portfolio of brands, increasing RevPAR by +23.7% mainly due to Occupancy (+18.7). The positive performance of the brand may be explained by the positive development of the Canary Islands (RevPAR +20.9%) due in part to the political unrest in Northern Africa impacting positively in February and especially in March, together with an increase in the number of flights arriving to the islands. In terms of segmentation, tour operator business, the most important segment for the brand, recovered to generate the performance in occupancy. Regarding nationalities, the Company highlights the increase in the number of Scandinavian guests, given that tour operators from these feeder markets changed their schedules quicker and more extensively after the protests in northern Africa. The increase in the number of tourists from Germany, Netherlands and Italy also contributed positively. Operating Expenses (excluding rental expenses) for the Sol Brand increased by 4.7%. while total cost per Stay decreased by -2.6% on the back of the decrease in personnel costs per stay thanks to the rationalization of personnel management according to opening periods. In terms of Available Rooms, the decrease (-11.5%) is partially (about 27%) related to the late opening of Sol Magalluf in the Balearic Islands. 6 Me Madrid

7 The Tryp by Wyndham brand (100% City; 75% Spain) has seen a RevPAR decrease of -0.1% mainly explained by a decrease in Occupancy of -3.2%, partially offset by increases in ARR of +3.2%. The performance of the hotels in Italy, and to a lesser extent in France and Germany, did not compensate the evolution of the hotels in Spain, especially in Madrid, affected by lower demand in Business Segment (mainly Corporate and Transient Business guests), still affected by corporate travel savings policies. In the case of Madrid it is fair to comment that the brand has had difficult comparables due to the fact that during the first quarter last year there were some one-off events such as the air traffic controllers' strikes in Spain and France and the problems caused by snow in Madrid in January 2010, both benefiting airports hotels. On the other hand we should take into consideration the fact that last year Spain held the Presidency of the European Union, which allowed increases in occupancy in the main capital cities. Despite the decrease in RevPAR in overall terms, the evolution of RevPAR in March grew by 6.0% for the brand on the back of: 1) a better yield management strategy 2) a recovery in the leisure segment at the weekends which also allowed the Company to increase prices; 3) the increase in occupancy between Tuesday and Thursday thanks to negotiations with Key Accounts, and; 4) the positive impact of the launch of some sales programmes focused on transient guests. Operating expenses (excluding rental expenses) increased by +4.4% in the first quarter of 2011, while total cost per stay has increased by +8.0%. The decrease in total stays generates part of the increase in Personnel Costs per Stay, given that hotels must retain a certain component of permanent staff. The increase in Available Rooms (+0.9%) item is explained by the opening of Tryp by Wyndham Condalmar (Barcelona, Spain) and Tryp by Wyndham Berlin Mitte (Berlin, Germany), compensated by the disaffiliation of Tryp by Wyndham Almussafes (Valencia, Spain) and Tryp by Wyndham San Lázaro (Santiago, Spain). In Q1, the Meliá brand (49% Spain, 20% LatAm, 31% EMEA) has seen RevPAR increase by +9.7%, on the back of both increases in Occupancy (+6.0%) and ARR (+3.5%). Regarding the Resorts, during the first quarter RevPAR increased by +9.3%, on the back of the performance of the Spanish Resorts (RevPAR +16.3%), especially those located in the Canary Islands given the increase in Occupancy of +35.5%, leading to a +30.2% RevPAR increase. Regarding LatAm (RevPAR +2.0%), the best performance was registered in our resort in Cozumel (RevPAR by +14.7%), benefiting from the increase in the number of flights arriving from Canada. In Cities, the positive evolution is due the performance of our hotels in the main core markets: Germany (RevPAR: +16.0%), France (RevPAR: +13.0%), United Kingdom (RevPAR %) and Italy (RevPAR +10.8%) with an important recovery in ARR. The strong performance of the cities mentioned before, compensated the slower performance of the Spanish Cities, where RevPAR increased by 2.7% mainly due to the recovery in Business Groups, especially those related to Meetings and Conventions. During first quarter of 2011, Operational Expenses (excluding rental expenses) increased by +6.5% while total cost per stay increased by 2.0%, +1.8% when excluding the changes in the perimeter. In terms of Available Rooms, the increase (+1.4%) is explained by the incorporation of the Meliá Valencia Palacio de Congresos (Valencia, Spain) in February Me Barcelona

8 During the first quarter of 2011, Premium brands (77% of the portfolio in the Americas) increased their RevPAR by 15.8%, mainly due to increases in Occupancy of +12.8%. In LatAm, RevPAR increased by 17.6% (+19.4% in US dollars) on the back of the evolution of our resorts in Mexico and the Dominican Republic, where occupancy grew by 14.3% as consequence of 1) a recovery in the business group segment as well as Tour Operator activity, and 2) more favourable comparables in the Dominican Republic given the earthquake in Haiti in January Furthermore, it is important to mention the evolution of our resort in Puerto Rico, where the hotel has recovered the business group base, leading to an increase in occupancy of +20%. In Europe, RevPAR grew by 10.1% thanks to the increase in occupancy in the hotel Gran Meliá Salinas (Canary Island) and the Gran Meliá Fénix in Madrid. Regarding the Operational expenses, they increased by 14.1% while cost per stay decreased by -0.5%. Table 1: Hotel statistics Owned and Leased hotels 11 / 10 (RevPAR & A.R.R. in Euros) % Occupancy RevPAR A.R.R. Available rooms ( 000 units) SOL % % o/ % 23.7% 4.2% -11.5% % TRYP BY WYNDHAM % % o/ % -0.1% 3.2% 0.9% % MELIÁ % % o/ % 9.7% 3.5% 1.4% % PREMIUM % % o/ % 15.8% 2.6% -0.2% % TOTAL % ,555.8 % o/ % 11.5% 4.1% -1.5% % , Paradisus Palma Real

9 Table 2: Hotel revenues split 11 / 10 for owned/leased hotels Room Revenues F&B and Other Total Revenues SOL % o/ % 6.4% 8.2% TRYP % o/ % -6.7% -1.4% MELIÁ % o/ % 4.5% 8.4% PREMIUM % o/ % 12.5% 13.8% TOTAL % o/ % 6.5% 8.3% Gran Meliá Palacio de Isora 9

10 2.2 Sol Meliá Vacation Club Total number of weeks sold represented a 3.4% increase versus 1Q 10. The increase in the number of unit sales is mainly explained by the performance of our resorts in Mexico and, to a lesser extent, in the Dominican Republic, which have increased occupancy rates together with the implementation of alternative prospecting methods such as the launch of in-house marketing programmes to increase the rate of closing efficiency. 2.3 Leisure Real Estate In the first quarter, 16.7 million Euros of capital gains were generated from the sale of the hotel Meliá Lebreros (Seville Spain) for 49.3 million Euros, compared to 5.5 million Euros in capital gains generated in Q from the sale of Tryp by Wyndham Los Gallos (Córdoba Spain). Regarding the other real estate businesses, by country: In the Dominican Republic, revenues increased by 15.8% (an additional 0.4 million Euros) mainly derived from the increase in the stock of land for re-sale once the Company recovered some plots of lands owned by delinquent clients. In Venezuela, rentals of shopping premises in the basement of the hotel Gran Meliá Caracas remained flat versus the same period in Meliá Barcelona

11 3. Income Statement Revenues Total revenues grew by +13.6% (additional 35.2 million Euros). Revenues from the Hotel Division increased by 8.3% while Leisure Real Estate generated millon Euros (5.5 million in 2010) on the back of the capital gains generated through the sale of the hotel Meliá Lebreros. Regarding Sol Meliá Vacation Club, revenues increased by +10.2% (additional 2.0 million Euros) while Other Revenues remained flat (-0.1million Euros). Operating Expenses Total Operating expenses have increased by 11.3% (22.8 million Euros). Raw Materials increased by 10% (additional 3.5 million Euros) mainly explained by Sol Caribe Tours (Tour Operator in Cuba) derived from the increase in its activity. Excluding that effect, raw materials would have increased by 3.0%. Total Personnel Expenses increased by 7.7% (6.8 million Euros) while at the hotel level increased by 5.8% (3.9 million Euros). Regarding hotel division, excluding changes in the perimeter Personnel expenses would have increased by 4.8% while per stay increases by 1.1%. Other Operating Expenses at the Hotel Level increased by 9.0% (+4.9 million Euros). When excluding perimeter and exchange rate differences, other operating expenses would have increased by 7.8%. At the Consolidated Level, this item increased by 16.1% (12.4 million Euros).When excluding perimeter, forex and extraordinary, this item would have increased by 12.8%.This increase could be explained by the fees paid to Wyndham Hotel Group after the sale of the Tryp Brand and the new franchise agreement, together with higher advertising expenses mainly in the Americas to complement the efforts made by the sales force to increase the activity in our hotels and resorts as well as the expenses linked to our loyalty programme due higher activity. Regarding rentals, it increased by 4.1% (0.7 million Euros) mainly due to three operations of sale & lease back (Tryp by Wyndham Gallos, Sol Pelicanos-Ocas, Meliá Lebreros) as well as the incorporation of four hotels (Innside Dresden, Tryp Condal Mar, Tryp Berlin Mitte and Meliá Valencia Palacio de Congresos) compensated by the disaffiliation of two rental contracts in Spain. Excluding the changes in the perimeter, rentals would have increased by 1.7% (0.3 million Euros). Ordinary Profit / Net Profit Total financial loss increased by 35.2% mainly due to the increase in the Net Interest Expense by 3.5 million Euros on the back of: 1) the impact of the 3 Month Euribor pick-up by 44 pbs, 2) Increment of spreads within the framework of Forward Start Facility signed in August 2010 and 3) decrease in 1 mn in Financial Income partially explained by financial capital gain generated last year. Additionally, Total Financial loss also has been affected by the Exchange Rate Differences, which decreased by 1.7 million Euros, due to the depreciation of the US dollar. 11 ME Vienna

12 Table 3: Sol Meliá Consolidated Income Statement Million Euros Mar 11 Mar 10 % Hotels Leisure Real Estate Vacation Club Other Revenues Total revenues % Raw Materials (38.9) (35.4) Personnel expenses (95.7) (88.8) Other operating expenses (89.6) (77.2) Total operating expenses (224.2) (201.4) 11.3% EBITDAR % Rental expenses (17.2) (16.5) EBITDA % Depreciation and amortisation (22.9) (23.7) EBIT % Net Interest Expense (14.8) (11.3) 31.5% Exchange Rate Differences (2.6) (0.9) Other Interest Expense (3.1) (3.0) Total financial profit/(loss) (20.5) (15.2) 35.2% Profit/(loss) from equity investments (3.1) (0.8) Continuing Earnings Before Taxes % Discontinuing Operations Profit before taxes and minorities % Taxes (0.9) (0.1) Group net profit/(loss) % Minorities (P)/L (0.3) 0.2 Profit/(loss) of the parent company % 12 Meliá Istrian - Croatia