PRN: Orient-Express Hotels Reports Second Quarter 2012 Results

01/ago/2012 23.01.02 PR Newswire Turismo Contatta l'autore

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Orient-Express Hotels Reports Second Quarter 2012 Results

 
[01-August-2012]
 

HAMILTON, Bermuda, August 1, 2012 /PRNewswire/ --


  • Same store revenue per available room ("RevPAR") for the quarter up 3% in local currency and down 2% in US dollars
  • Second quarter total revenue before real estate down 2% to $163.8 million from $167.8 million
  • Second quarter revenue from owned hotels down 4% to $130.7 million from $135.6 million
  • Adjusted EBITDA before real estate for the second quarter down 3% to $41.5 million from $42.7 million
  • Adjusted net earnings from continuing operations for the second quarter up to $14.8 million from $10.2 million
  • Opened Palacio Nazarenas, a 55-key all-suite hotel in Cuzco, Peru
  • Entered into agreements to sell The Observatory Hotel in Sydney and The Westcliff in Johannesburg

Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com) (the "Company"), owners or part-owners and managers of 46 luxury hotel, restaurant, tourist train and river cruise properties operating in 23 countries, today announced its results for the second quarter ended June 30, 2012.

"We have experienced a challenging second quarter," said Philip Mengel, Director and Interim Chief Executive Officer. "The continued economic uncertainty in the Eurozone has affected demand for luxury travel from European sources, and the weakening of the euro and other currencies against the dollar has reduced the dollar value of our revenues.

"Despite these challenges," Mr. Mengel continued, "we are pleased that our underlying revenue in local currencies has continued to grow. Excluding the effects of currency movements, total revenue before real estate for the second quarter was $6.1 million, or 4%, ahead of the second quarter of 2011. If we look forward, total owned hotels' revenue on the books for the full year 2012 shows a 5% increase compared to 2011 when the effects of currency are excluded.

"Our strategy to redeploy capital from non-core properties is proceeding on plan. We have recently announced agreements to sell The Observatory Hotel and The Westcliff. The sale proceeds will be allocated to debt reduction, corporate liquidity and our active program of investments in core properties. In June, our Peruvian hotel joint venture opened Palacio Nazarenas, an all-suite property in Cuzco, Peru, and we have exciting revenue-enhancing investment projects in progress across the portfolio."

Second Quarter 2012 Earnings Summary

Revenue before real estate was $163.8 million in the second quarter of 2012, down $4.0 million or 2% from $167.8 million in the second quarter of 2011. Excluding the effects of weaker local currencies compared to the US dollar, revenue before real estate was $6.1 million or 4% ahead of the second quarter in the prior year.

Revenue from owned hotels for the second quarter was $130.7 million, down $4.9 million or 4% from $135.6 million in the second quarter of 2011. On a same store basis, owned hotels RevPAR was up 3% in local currency and down 2% in US dollars.

Trains & cruises revenue in the second quarter was $27.0 million compared to $25.3 million in the second quarter of 2011, an increase of 7%.

Adjusted EBITDA before real estate was $41.5 million for the second quarter, down $1.2 million from $42.7 million in the prior year period. The principal increases were in the Company's share of earnings from PeruRail (up $2.1 million compared to the same period in the prior year) and earnings from Venice Simplon-Orient-Express (up $1.0 million). Other improvements included the two Sicilian properties (up $0.9 million) and La Samanna, St. Martin (up $0.8 million), offset by decreases at Grand Hotel Europe, St. Petersburg, (down $1.3 million), Hotel Cipriani, Venice (down $1.2 million), Copacabana Palace, Rio de Janeiro (down $0.8 million), and an increase in central overheads of $0.9 million.

Adjusted EBITDA for the second quarter includes an add-back of share-based compensation costs of $1.6 million (2011 - $2.0 million). Revenue and adjusted EBITDA before real estate do not include the results of The Observatory Hotel, Sydney, and The Westcliff, Johannesburg, both of which have been moved to discontinued operations.

Adjusted net earnings from continuing operations for the second quarter were $14.8 million ($0.14 per common share) compared with $10.2 million ($0.10 per common share) in the second quarter of 2011. This increase was in part due to a $4.7 million reduction in interest expense compared to the second quarter of 2011.

Company Highlights

On June 15th, the Company's 50% Peru hotels joint venture opened its latest property, Palacio Nazarenas. The 55-key luxury urban retreat and former 16th century convent in Cuzco features oxygenated suites, a full-service spa offering a range of indigenous products, iPads for each room loaded with insider city guides, Cuzco's first outdoor swimming pool, and an all-day dining experience showcasing contemporary Andean cuisine by exciting young Peruvian chef, Virgilio Martinez.  During the four-year renovation process, archaeologists discovered many Incan artifacts, several of which are on display in the hotel.  Incan walls uncovered during excavations are preserved beneath glass floors in the spa's treatment rooms.

During the quarter, the Company entered into an agreement to sell The Observatory Hotel.  The proceeds of the sale will be used to repay debt of $10.9 million, with the balance held in cash or reinvested in the Company's portfolio. Orient-Express will continue to operate the hotel until the expected closing of the transaction in mid-August 2012.  

In July, the Company also entered into an agreement to sell The Westcliff. The transaction, which is conditional on the satisfaction of certain regulatory approvals, is expected to close by the end of the year. Under the terms of that transaction, Orient-Express has agreed to remain as manager of The Westcliff for a maximum period of twelve months from completion while the new owner develops its long-term refurbishment plans.

Total gross proceeds from the sale of these two properties are expected to be $66.0 million. During the second quarter, $2.5 million cash was received from the completion of the sale of Bora Bora Lagoon Resort & Spa.

The Company commenced in June the refurbishment of 121 rooms and suites in the main building of the Copacabana Palace.  As part of the three-month project, which is being carried out during the hotel's traditional low season, the lobby area will be enlarged and arrival experience improved. This project is the second phase of a major investment project started in the fourth quarter of 2011 when the Company refurbished 26 rooms and suites on the fifth floor of the main building, as well as the Cipriani restaurant.

The Company will also complete the refurbishment of public areas and additional rooms at La Samanna during the third quarter, and has recently committed to refurbish rooms in the Oasis Wing of Mount Nelson Hotel in Cape Town, as well as ongoing improvements to the Company's three safari camps in Botswana. During August, the Company will complete a major renovation of the ballroom at the '21' Club in New York that will enhance the space for events and celebrations.

In May, the Company introduced a new Orient-Express.com website, integrating responsive web design to deliver a seamless experience across all devices and platforms, from smartphones and tablets to internet-enabled televisions.  The project consolidated the Company's communications and commercial channels around its recently upgraded booking engine and is part of an overall strategy to speak to new audiences and markets while achieving efficiency of message and content across the Company.  Features of the new design include real time social media feeds and TripAdvisor reviews, enhanced online reservation capabilities and greater access to recommended travel experiences across the Company's portfolio.

Operating Performance

Europe:  

In the second quarter, revenue from owned hotels was $70.9 million, down $5.8 million or 8% from $76.7 million in the second quarter of 2011. This decrease is largely attributable to a weaker euro, which lost 11% of its value from the same time last year compared to the US dollar. Excluding the effects of currency movements, the underlying revenue in local currencies was $2.3 million ahead of the second quarter of 2011, led by the two Sicilian properties where the refurbishments have had a positive effect on demand from higher-spending clientele.

Same store RevPAR in Europe was flat compared to the prior year in local currency and down 7% in US dollars, where a weaker euro contributed to a 3% drop in average daily rate ("ADR").

EBITDA for the quarter was $26.8 million, down $2.0 million from $28.8 million in the second quarter of 2011. Excluding the effects of weaker local currencies, EBITDA was $1.1 million ahead of the second quarter of 2011. The growth in underlying trading was primarily driven by the two Sicilian properties, Villa San Michele, Florence and Grand Hotel Europe.

North America:  

Revenue from owned hotels for the quarter was $30.0 million, up $2.3 million or 8% from $27.7 million in the second quarter of 2011. The growth was spread across most properties but continued to be led by Charleston Place where strong results were driven by corporate and group business. Same store RevPAR in the region increased by 9% in US dollars due to a 7% increase in ADR and a 2 percentage point improvement in occupancy.

EBITDA in North America grew by 30% to $6.9 million compared to $5.3 million in the second quarter of 2011. This EBITDA growth included $0.6 million at Charleston Place and $0.8 million at La Samanna where the 2011 investment in rooms had a positive effect. There was also a $0.3 million increase in EBITDA at the two Mexican properties.

Rest of World:

Southern Africa:  

Second quarter revenue from owned hotels was $3.6 million, down $0.4 million or 10% from $4.0 million in the second quarter of 2011. Same store RevPAR was up 19% in local currency and down 3% in US dollars due to currency movements affecting ADR in US dollar terms. EBITDA was a loss of $0.5 million compared to an EBITDA loss of $0.8 million in the second quarter of 2011, as the properties benefited from labor and other cost savings.

South America:  

Second quarter revenue from owned hotels was $20.0 million, down $1.7 million or 8% from $21.7 million in the second quarter of 2011. This decrease included a $0.5 million increase at Hotel das Cataratas, Iguassu, offset by a decrease of $2.3 million at Copacabana Palace. Compared to the second quarter of 2011, the Brazilian real depreciated by 23% versus the US dollar, negatively impacting the revenue reported by the Brazilian hotels.

Same store RevPAR in the region decreased by 2% in US dollars as a result of a 6% decrease in ADR offset by an increase in occupancy to 61% from 59% in the second quarter of 2011.

EBITDA for the quarter was $4.3 million, a decrease of $0.3 million compared to $4.6 million in the second quarter of last year. This was due to an increase of $0.6 million at Hotel das Cataratas where business from the domestic Brazilian market was strong, offset by a decrease of $0.8 million at Copacabana Palace.

Asia-Pacific:  

Revenue for the second quarter of 2012 was $6.3 million, an increase of $0.8 million or 15% compared to $5.5 million in the second quarter of 2011. Revenue growth in the region was led by Napasai, Koh Samui (up $0.5 million), which benefited from its new lagoon, and The Governor's Residence, Yangon (up $0.4 million), as Myanmar further opens up to international tourism, which is expected to continue due to the recent relaxing of US restrictions in the country. Same store RevPAR increased by 15% in US dollars due to a 9% increase in ADR in US dollar terms and an additional 2 percentage point increase in occupancy compared to the second quarter of 2011.

EBITDA was $1.3 million compared to $1.2 million in the second quarter of 2011.

Hotel management & part-ownership interests:  

EBITDA for the second quarter of 2012 was $1.6 million compared to $2.5 million in the second quarter of 2011. The quarterly result included a $0.7 million decline from Hotel Ritz, Madrid, which has struggled in the difficult economic conditions prevailing in Spain.

Restaurants:  

Revenue from '21' Club in the second quarter of 2012 was $3.9 million compared to $4.1 million in the same quarter of 2011, due to temporary noise disruption from neighboring construction. EBITDA was $0.5 million compared to an EBITDA loss of $0.4 million in the same quarter of 2011 due to a non-recurring legal settlement of $1.0 million recorded in the second quarter of 2011.

Trains & cruises:  

Revenue increased by $1.7 million or 7% to $27.0 million in the second quarter of 2012 from $25.3 million in the prior year period, largely due to a $2.1 million increase from the Company's PeruRail joint venture generated by increased passenger numbers and a $1.1 million increase from the Venice Simplon-Orient-Express, which is on target to achieve a record year.

EBITDA was $8.0 million compared to $6.1 million in the second quarter of 2011. This improvement was largely due to a $2.1 million increase in share of results from PeruRail and a $1.0 million increase from Venice Simplon-Orient-Express compared to the second quarter of 2011.

Central costs:  

In the second quarter of 2012, central overheads were $8.0 million compared with $6.6 million in the prior year period. This increase was attributable to a $0.5 million increase in cash compensation costs, a $0.8 million increase in legal and professional fees and a $0.5 million receivable write-off (a non-recurring item added back for the purposes of calculating adjusted EBITDA).

In addition, the Company incurred $1.6 million of non-cash share-based compensation expense compared to $2.0 million in the second quarter of 2011. Starting in the second quarter of 2012, the Company has begun adding back share-based compensation costs in calculating adjusted EBITDA before real estate and adjusted net earnings from continuing operations.

The Company incurred $0.3 million of central marketing costs, as it continued to invest in developing awareness of the Orient-Express brand.

Real estate:  

In the second quarter of 2012, there was an EBITDA loss of $1.5 million from real estate activities, related to Porto Cupecoy, Sint Maarten, compared with a loss of $1.9 million in the second quarter of 2011. One condominium unit was sold at Porto Cupecoy during the quarter, bringing cumulative sales at the end of the quarter to 118, or 64% of the total number of units.

Depreciation and amortization:  

The depreciation and amortization charge for the second quarter of 2012 was $10.5 million, down from $10.9 million in the second quarter of 2011.

Interest:  

The interest charge for the second quarter of 2012 was $6.4 million, down $4.7 million from $11.1 million in the prior year quarter. This decrease was due to the reduction in net debt over the last twelve months, a non-recurring charge of $1.7 million in the second quarter of 2011 related to the write-off of deferred finance costs and $1.0 million of interest capitalized in the second quarter of 2012 in relation to the construction at El Encanto, Santa Barbara, compared to $nil in the second quarter of 2011.

Tax:  

The tax charge for the second quarter of 2012 was $7.5 million compared to a charge of $10.0 million in the same quarter in the prior year. The primary reason for the movement was that the charge in the second quarter of 2012 included a deferred tax credit of $2.4 million arising in respect of fixed asset timing differences following depreciation of local currencies against the US dollar, compared to a charge of $1.0 million in the second quarter of 2011.

Investment:  

The Company invested a total of $26.0 million during the second quarter of 2012, including $10.6 million for the ongoing restoration of El Encanto, $2.1 million primarily related to the construction of five new suites at Hotel Splendido, Portofino, $2.6 million primarily for the ongoing refurbishment of Copacabana Palace, $1.7 million for completing the remaining works at the two Sicilian properties and the balance for routine capital expenditures.

Balance Sheet

At June 30, 2012, the Company had long-term debt (including the current portion and debt of consolidated variable interest entities) of $615.1 million, working capital loans of $0.5 million and cash balances of $86.1 million (including $14.5 million of restricted cash), resulting in total net debt of $529.5 million compared with total net debt of $531.1 million at the end of 2011. At June 30, 2012, the ratio of net debt to trailing 12-month adjusted EBITDA (before real estate) was 4.5 times.

Undrawn amounts available to the Company at June 30, 2012 under short-term lines of credit were $3.9 million, bringing total cash availability (excluding restricted cash) at June 30, 2012 to $75.5 million.

At June 30, 2012, approximately 50% of the Company's debt was at fixed interest rates and 50% was at floating interest rates. The weighted average maturity of the debt was approximately 2.8 years and the weighted average interest rate was approximately 4.2%. The Company had $114.7 million of debt repayments due within 12 months. These amounts are expected to be met through a combination of operating cash flow, proceeds from divestments of non-core assets, refinancing of the facilities and utilization of available cash.

* * * * * * * *


ORIENT-EXPRESS HOTELS LTD.

SUMMARY OF OPERATING RESULTS

(Unaudited)

                                                   Three months ended                                                           June 30,     $'000 - except per share amounts               2012        2011     Revenue and earnings from unconsolidated     companies     Owned hotels     - Europe                                     70,850      76,684     - North America                              29,995      27,740     - Rest of world                              29,838      31,161     Total owned hotels                          130,683     135,585     Hotel management & part-ownership interests   2,237       2,853     Restaurants                                   3,942       4,097     Trains & cruises                             26,963      25,273     Revenue and earnings from unconsolidated       companies before real estate                163,825     167,808     Real estate revenue                           1,219       1,660     Total (1)                                   165,044     169,468       Analysis of earnings     Owned hotels     - Europe                                     26,807      28,817     - North America                               6,895       5,346     - Rest of world                               5,150       4,901     Hotel management & part-ownership interests   1,636       2,530     Restaurants                                     484        (409)     Trains & cruises                              8,011       6,122     Central overheads                            (7,977)     (6,621)     Share-based compensation                     (1,572)     (2,040)     Central marketing costs for brand awareness     campaign                                       (333)          -     EBITDA before real estate and loss on     disposal                                     39,101      38,646     Real estate                                  (1,505)     (1,876)     EBITDA before loss on disposal               37,596      36,770     Loss on disposal                                  -         (86)     EBITDA                                       37,596      36,684     Depreciation & amortization                 (10,518)    (10,889)     Interest                                     (6,402)    (11,052)     Foreign exchange                             (1,525)      1,092     Earnings before tax                          19,151      15,835     Tax                                          (7,479)    (10,023)     Net earnings from continuing operations      11,672       5,812     Discontinued operations                           6        (591)     Net earnings                                 11,678       5,221     Net loss/(earnings) attributable to     non-controlling interests                        96         (67)     Net earnings attributable to Orient-Express     Hotels Ltd.                                  11,774       5,154     Net earnings per common share attributable to     Orient-Express Hotels Ltd.                     0.11        0.05     Number of shares - millions                  102.89      102.47 


(1) Comprises earnings from unconsolidated companies of $3,336,000 (2011 - $2,198,000) and revenue of $161,708,000 (2011 - $167,270,000).

ORIENT-EXPRESS HOTELS LTD.

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                              Three months ended                                    June 30,                                 2012      2011     Average Daily Rate       (in US dollars)     Europe                       772       799     North America                372       349     Rest of world                341       347     Worldwide                    502       514       Room Nights Available     Europe                    85,827    85,659     North America             63,791    64,155     Rest of world            100,282    99,554     Worldwide                249,900   249,368       Rooms Nights Sold     Europe                    52,139    54,323     North America             45,894    45,095     Rest of world             50,296    48,687     Worldwide                148,329   148,105       Occupancy     Europe                        61%       63%     North America                 72%       70%     Rest of world                 50%       49%     Worldwide                     59%       59%       RevPAR (in US dollars)     Europe                       469       507     North America                268       245     Rest of world                171       170     Worldwide                    298       305                                                       Change %     Same Store RevPAR                                     Local     (in US dollars)                            US dollar currency     Europe                       469       507       -7%       0%     North America                268       245        9%      10%     Rest of world                171       170        1%       3%     Worldwide                    298       305       -2%       3% 



ORIENT-EXPRESS HOTELS LTD.

SUMMARY OF OPERATING RESULTS

(Unaudited)

                                                    Six months ended                                                         June 30,     $'000 - except per share amounts                2012        2011     Revenue and earnings from unconsolidated     companies     Owned hotels     - Europe                                      86,638      91,364     - North America                               59,060      55,027     - Rest of world                               72,416      69,285     Total owned hotels                           218,114     215,676     Hotel management & part-ownership interests    1,975       2,777     Restaurants                                    7,808       7,438     Trains & cruises                              36,429      32,831     Revenue and earnings from unconsolidated       companies before real estate                 264,326     258,722     Real estate revenue                            3,033       3,315     Total (1)                                    267,359     262,037       Analysis of earnings     Owned hotels     - Europe                                      19,203      21,959     - North America                               14,086      11,063     - Rest of world                               18,868      15,868     Hotel management & part-ownership interests      892       2,310     Restaurants                                      823        (261)     Trains & cruises                               7,689       5,286     Central overheads                            (15,456)    (12,766)     Share-based compensation                      (3,582)     (3,612)     Central marketing costs for brand awareness     campaign                                        (611)          -     EBITDA before real estate and gain on     disposal                                      41,912      39,847     Real estate                                   (3,029)     (2,920)     EBITDA before gain on disposal                38,883      36,927     Gain on disposal                                   -         520     EBITDA                                        38,883      37,447     Depreciation & amortization                  (21,044)    (21,369)     Interest                                     (13,618)    (20,127)     Foreign exchange                                (598)      2,070     Earnings / (loss) before tax                   3,623      (1,979)     Tax                                           (7,713)     (5,051)     Net loss from continuing operations           (4,090)     (7,030)     Discontinued operations                          368      (2,429)     Net loss                                      (3,722)     (9,459)     Net earnings attributable to non-controlling     interests                                       (175)       (294)     Net loss attributable to Orient-Express     Hotels Ltd.                                   (3,897)     (9,753)     Net loss per common share attributable to     Orient-Express Hotels Ltd.                     (0.04)      (0.10)     Number of shares - millions                   102.80      102.45 


(1)   Comprises earnings from unconsolidated companies of $3,290,000 (2011 - $1,433,000) and revenue of $264,069,000 (2011 - $260,604,000).

ORIENT-EXPRESS HOTELS LTD.

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                              Six months ended                                  June 30,                                2012     2011     Average Daily Rate       (in US dollars)     Europe                      691      721     North America               404      374     Rest of world               374      355     Worldwide                   463      456       Room Nights Available     Europe                  135,206  133,832     North America           127,582  127,605     Rest of world           200,486  198,215     Worldwide               463,274  459,652       Rooms Nights Sold     Europe                   67,793   68,487     North America            86,527   85,719     Rest of world           116,237  111,411     Worldwide               270,557  265,617       Occupancy     Europe                       50%      51%     North America                68%      67%     Rest of world                58%      56%     Worldwide                    58%      58%       RevPAR (in US dollars)     Europe                      347      369     North America               274      251     Rest of world               217      200     Worldwide                   270      263                                                     Change %     Same Store RevPAR                                   Local     (in US dollars)                          US dollar currency     Europe                      347      369       -6%       1%     North America               274      251        9%      10%     Rest of world               217      200        9%      11%     Worldwide                   270      263        3%       7% 


ORIENT-EXPRESS HOTELS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

                                                          June 30, December 31,       $'000                                                    2012         2011       Assets       Cash and restricted cash                               86,050      103,318     Accounts receivable                                    50,718       44,599     Due from unconsolidated companies                      12,569       10,754     Prepaid expenses and other                             22,051       20,089     Inventories                                            44,491       44,499     Other assets held for sale                             65,910      105,173     Real estate assets                                     30,747       32,021     Total current assets                                  312,536      360,453       Property, plant & equipment, net of accumulated     depreciation                                        1,120,319    1,107,657     Property, plant & equipment, net of accumulated     depreciation       of consolidated variable interest entities            185,013      185,788     Investments in unconsolidated companies                63,411       60,012     Goodwill                                              159,531      161,460     Other intangible assets                                18,987       19,465     Other assets                                           39,534       36,034                                                         1,899,331    1,930,869       Liabilities and Equity       Working capital loans                                     487            -     Accounts payable                                       29,000       28,998     Accrued liabilities                                    96,326       87,617     Deferred revenue                                       38,677       29,400     Other liabilities held for sale                           937        3,262     Current portion of long-term debt and capital     leases                                                112,416       77,058     Current portion of long-term debt of consolidated     variable interest       entities                                                1,789        1,784     Total current liabilities                             279,632      228,119       Long-term debt and obligations under capital     leases                                                413,015      466,830     Long-term debt of consolidated variable interest     entities                                               87,849       88,745     Deferred income taxes                                  90,649       94,036     Deferred income taxes of consolidated variable     interest entities                                      60,690       61,072     Other liabilities                                      39,037       39,542     Total liabilities                                     970,872      978,344       Shareholders' equity                                  926,087      950,330     Non-controlling interests                               2,372        2,195     Total equity                                          928,459      952,525                                                         1,899,331    1,930,869   



ORIENT-EXPRESS HOTELS LTD.

RECONCILIATIONS AND ADJUSTMENTS

(Unaudited)

                                                                  Six months                                              Three months ended       ended     $'000 - except per share amounts            June 30,          June 30,                                              2012      2011     2012    2011       EBITDA                                    37,596    36,684  38,883  37,447     Real estate                                1,505     1,876   3,029   2,920     EBITDA before real estate                 39,101    38,560  41,912  40,367       Adjusted items:     Write-down of receivable (1)                 500         -     500       -     Pre-opening expenses (2)                     307         -     307       -     Write-off of fixed assets (3)                  -         -     391       -     Loss/(gain) on disposal (4)                    -        86       -    (520)     Legal settlement (5)                           -     1,000       -   1,000     Management restructuring (6)                   -       975       -   1,389     Share-based compensation (7)               1,572     2,040   3,582   3,612       Adjusted EBITDA before real estate        41,480    42,661  46,692  45,848       Reported net earnings/(loss)     attributable to Orient-Express Hotels     Ltd.                                      11,774     5,154  (3,897) (9,753)     Net loss/(earnings) attributable to     non-controlling interests                     96       (67    (175)   (294)     Reported net earnings/(loss)              11,678     5,221  (3,722) (9,459)     Discontinued operations net of tax           (6)       591    (368)  2,429     Net earnings/(losses) from continuing     operations                                11,672     5,812  (4,090) (7,030)       Adjusted items net of tax:     Write-down of receivable (1)                 500         -     500       -     Pre-opening costs (2)                        200         -     200       -     Write-off of fixed assets (3)                  -         -     313       -     Loss/(gain) on disposal (4)                    -        56       -    (338)     Legal settlement (5)                           -       650       -     650     Management restructuring (6)                   -       780       -   1,166     Share-based compensation (7)               1,572     2,040   3,582   3,612     Loan financing costs (8)                       -     1,148       -   1,148     Interest rate swaps (9)                     (189)      497     177     516     Foreign exchange (10)                      1,040      (797)    148  (1,469)       Adjusted net earnings/(loss) from     continuing operations                     14,795    10,186     830  (1,745)       Reported EPS attributable to     Orient-Express Hotels Ltd.                  0.11      0.05   (0.04)  (0.10)     Reported EPS from continuing     operations                                  0.11      0.06   (0.04)  (0.07)     Adjusted EPS from continuing     operations                                  0.14      0.10    0.01   (0.02)     Number of shares (millions)               102.89    102.47  102.80  102.45 


See footnotes on following page.

Footnotes:

  1. Write-down of receivable balance within central costs.
  2. Pre-opening expenses related to the development at El Encanto.
  3. Non-cash write-off of fixed asset balances.
  4. Gain on disposal of New York hotel project.
  5. Settlement of employee litigation at '21' Club.
  6. Restructuring and redundancy costs.
  7. Share-based compensation costs.
  8. Amortization of deferred financing costs on repayment of debt.
  9. Change in fair value of derivatives that are not designated in hedging relationships and the ineffective portion of derivatives that are designated in hedging relationships.
  10. Foreign exchange is a non-cash item arising on the translation of certain assets and liabilities denominated in currencies other than the functional currency.


ORIENT-EXPRESS HOTELS LTD.

RECONCILIATIONS AND ADJUSTMENTS (CONTINUED)

(Unaudited)

                                         Twelve                                         months                                     ended June   Six months ended     Year ended                                             30,        June 30      December 31,     $'000                                 2012     2012         2011      2011       EBITDA                              48,670   38,883       37,447    47,234     Real estate                          6,512    3,029        2,920     6,403     EBITDA before real estate           55,182   41,912       40,367    53,637       Adjusted items:     Write-down of receivable     (1)                                    500      500            -         -     Pre-opening expenses (2)               307      307            -         -     Write-off of fixed assets     (3)                                    391      391            -         -     Gain on disposal (4)               (16,024)       -         (520)  (16,544)     Legal settlement (5)                 1,546        -        1,000     2,546     Management restructuring     (6)                                  3,802        -        1,389     5,191     Share-based compensation     (7)                                  6,723    3,582        3,612     6,753     Impairment (8)                      59,231        -            -    59,231     Other (9)                            5,063        -            -     5,063       Adjusted EBITDA before     real estate                        116,721   46,692       45,848   115,877       EBITDA                              48,670   38,883       37,447    47,234       Depreciation and     amortization                       (43,573) (21,044)     (21,369)  (43,898)     Interest                           (33,753) (13,618)     (20,127)  (40,262)     Foreign exchange                    (6,939)    (598)       2,070    (4,271)     (Loss) / earnings before     tax                                (35,595)   3,623       (1,979)  (41,197)     Tax                                (25,012)  (7,713)      (5,051)  (22,350)     Net loss from continuing     operations                         (60,607)  (4,090)      (7,030)  (63,547)     Discontinued operations            (21,252)     368       (2,429)  (24,049)       Net loss                           (81,859)  (3,722)      (9,459)  (87,596)   


Footnotes:

  1. Write-down of receivable balance within central costs.
  2. Pre-opening expenses related to the development at El Encanto.
  3. Non-cash write-off of fixed asset balances.
  4. Gain on disposal of New York hotel project and excess '21' Club development rights.
  5. Settlement of employee litigation at '21' Club.
  6. Restructuring, redundancy and associated legal and other costs.
  7. Share-based compensation costs.
  8. Goodwill and fixed asset impairment charges on owned properties and Porto Cupecoy and share of impairment in unconsolidated companies.
  9. For year 2011, non-cash fixed asset write-off related to the refurbishment of La Samanna, non-recurring charge for settlement of VAT claim in Mexico, write-off of costs related to abandoned projects, and cost associated with office move of principal UK administrative subsidiary.


ORIENT-EXPRESS HOTELS LTD.

NET DEBT TO ADJUSTED EBITDA CALCULATION

(Unaudited)

                                                     Twelve months ended and as at                                                      June 30,         December 31,     $'000                                               2012               2011       Cash     Cash and cash equivalents                         71,562            90,104     Restricted cash                                   14,488            13,214       Total cash                                        86,050           103,318       Total debt     Working capital facilities                           487                 -     Current portion of long-term debt and     capital leases                                   112,416            77,058     Current portion of long-term debt of     consolidated variable interest entities            1,789             1,784     Long-term debt and obligations under     capital leases                                   413,015           466,830     Long-term debt held by consolidated     variable interest entities                        87,849            88,745       Total debt                                       615,556           634,417       Net debt (1)                                     529,506           531,099       Adjusted EBITDA before real estate               116,721           115,877       Net debt / adjusted EBITDA before real     estate                                             4.5 x             4.6 x 



Management evaluates the operating performance of the Company's segments on the basis of segment net earnings before interest, foreign exchange, tax (including tax on unconsolidated companies), depreciation and amortization (EBITDA), and believes that EBITDA is a useful measure of operating performance, for example to help determine the ability to incur capital expenditure or service indebtedness, because it is not affected by non-operating factors such as leverage and the historical cost of assets.  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.  EBITDA does not represent net cash provided by operating, investing and financing activities under US generally accepted accounting principles (US GAAP), is not necessarily indicative of cash available to fund all cash flow needs, and should not be considered as an alternat! ive to earnings from operations or net earnings under US GAAP for purposes of evaluating operating performance.

Adjusted EBITDA and adjusted net earnings/(loss) of the Company are non-GAAP financial measures and do not have any standardized meanings prescribed by US GAAP.  They are, therefore, 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, cash flow from operating activities or any other measure of performance prescribed by US GAAP.  Management considers adjusted EBITDA and adjusted net earnings/(loss) to be meaningful indicators of operations and uses them as measures to assess operating performance because, when comparing current period performance with prior periods and with budgets, management does so after having adjusted for non-recurring items, foreign exchange (a non-cash item), disposals of assets or 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 EBITDA and adjusted net earnings/(loss) are also used by investors, analysts and lenders as measures of financial performance because, as adjusted in the foregoing manner, the measures provide a consistent basis on which the performance of the Company can be assessed.

Because the principal activities of the Company relate to its hotels, restaurants, tourist trains and cruises, management considers the revenue from these activities to be a better measure of performance than total revenue which includes real estate sales from past developments of for-sale residences adjoining some of the Company's hotels, currently a small part of the Company's overall business.

This news release and related oral presentations by management contain, in addition to historical information, forward-looking statements that involve risks and uncertainties.  These include statements regarding earnings outlook, investment plans, debt reduction and debt refinancings, asset sales and similar matters that are not historical facts.  These statements are based on management's current expectations 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 a difference include, but are not limited to, those mentioned in the news release and oral presentations, unknown effects on the travel and leisure markets of terrorist activity and any police or military response, varying customer demand and competitive considerations, failure to realize hotel bookings and reservations and planned property development! 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 proposed asset sales, debt refinancings, capital expenditures and acquisitions, inability to reduce funded debt as planned or to agree bank 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 or development 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, changing global or regional economic conditions and weakness in financial markets which may adversely affect demand, legislative, regulatory and politica! l developments, and possible new challenges to the Company's c! orporate governance structure.  Further information regarding these and other factors is included in the filings by the Company with the U.S. Securities and Exchange Commission.

Orient-Express Hotels Ltd. will conduct a conference call on Thursday, August 2, 2012 at 10.00 hrs EDT (15.00 BST) which is accessible at +1 877 249 9037 (US toll free) or +44 (0)20 3140 8286  (Standard International).  The conference ID is 9423387.  A re-play of the conference call will be available until 7pm (EDT) Thursday, August 9, 2012 and can be accessed by calling +1 866 932 5017 (US toll free) or +44 (0)20 7111 1244 (Standard International) and entering replay access number 9423387#.  A re-play will also be available on the Company's website: http://www.orient-expresshotelsltd.com. Financial media requiring further information should contact Vicky Legg, Director of Corporate Communications, on +44 (0)20 3117 1380 or vicky.legg@orient-express.com.

Contacts:

Martin O'Grady        
Vice President, Chief Financial Officer        
Tel: +44-20-3117-1333        
E: martin.ogrady@orient-express.com        

Amy Brandt
Director of Investor Relations
Tel: +44-20-3117-1323
E: amy.brandt@orient-express.com



Company Codes: NYSE:OEH, Bloomberg:OEH@US, RICS:OEH.N, ISIN:BMG677431071
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