華住集團有限公司呈報2019年第四季度及全年財務業績
- A total of 5,618 hotels or 536,876 hotel rooms in operation as of
December 31, 2019 . - Hotel turnover1 increased 21% year-over-year to
RMB9 billion for the fourth quarter, and increased 19% toRMB35 billion for the full year of 2019. - Net revenues increased 8.5% year-over-year to
RMB2.9 billion (US$418 million )2 for the fourth quarter, and increased 11.4% toRMB11.2 billion (US$1.6 billion ) for the full year of 2019, in line with revenue guidance previously announced of 10% to 12%. - EBITDA (non-GAAP) for the fourth quarter of 2019 was
RMB1.1 billion (US$152 million ), compared with negativeRMB46 million for the fourth quarter of 2018. EBITDA (non-GAAP) increased 56.5% toRMB3.6 billion (US$510 million ) for the full year of 2019. - Excluding share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities, adjusted EBITDA (non-GAAP) for the fourth quarter increased 15.9% year-over-year to
RMB854 million (US$122 million ) and increased 2.4% toRMB3.3 billion (US$481 million ) for the full year of 2019. - Net income attributable to
Huazhu Group Limited wasRMB619 million (US$89 million ) for the fourth quarter of 2019, compared with net loss attributable toHuazhu Group Limited ofRMB419 million in the fourth quarter of 2018 and net income attributable toHuazhu Group Limited ofRMB431 million in the previous quarter. Net income attributable toHuazhu Group Limited increased 147.1% toRMB1.8 billion (US$254 million ) for the full year of 2019. - Excluding share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities, adjusted net income (non-GAAP) for the fourth quarter of 2019 was
RMB411 million (US$59 million ), compared withRMB364 million for the fourth quarter of 2018, and adjusted net income (non-GAAP) for the full year of 2019 wasRMB1.6 billion (US$225 million ), compared withRMB1.7 billion for the full year of 2018. Huazhu completed the acquisition of Deutsche Hospitality onJanuary 2, 2020 .
Fourth Quarter of 2019 Operational Highlights
- During the fourth quarter of 2019,
Huazhu opened 630 hotels, including 11 leased (“leased-and-operated”) hotels and 619 manachised (“franchised-and-managed”) hotels and franchised hotels.
- The Company closed a total of 163 hotels, which included 20 leased hotels and 143 manachised and franchised hotels, during the fourth quarter of 2019. This was mainly due to three reasons:
a) With strategic focus to upgrade product and service quality,Huazhu temporarily closed 56 hotels for brand upgrade and business model change purposes; and removed 42 hotels for non-compliance with Huazhu’s brand and operating standards.
b) Property-related issues, including rezoning and expiry of leases, which resulted in the closure of 33 hotels.
c) 32 manachised hotels were closed due to operating losses.
- The ADR, which is defined as the average daily rate for all hotels in operation, was
RMB232 in the fourth quarter of 2019, compared withRMB230 in the fourth quarter of 2018 andRMB245 in the previous quarter. The year-over-year increase of 0.9% was primarily due to an increase in the proportion of mid- and up-scale hotels with higher ADR in the Company’s brand mix. The sequential decrease resulted mainly from seasonality.
- The occupancy rate for all hotels in operation was 82.2% in the fourth quarter of 2019, compared with 85.2% in the fourth quarter of 2018 and 87.7% in the previous quarter. The year-over-year decrease of 3.0 percentage point was due to the soft macro economy and a dilutive impact from newly-opened hotels. The sequential decrease resulted mainly from seasonality.
- Blended RevPAR, defined as revenue per available room for all hotels in operation, was
RMB191 in the fourth quarter of 2019, compared withRMB196 in the fourth quarter of 2018 andRMB215 in the previous quarter. The year-over-year decrease of 2.7% was mainly attributable to the soft macro economy. Excluding our soft brands (Hi Inn , Elan, Starway, Madison and Grand Madison), the blended RevPAR for the fourth quarter of 2019 would have declined by 0.5% year-over-year. The sequential decrease resulted mainly from seasonality.
- For all hotels which had been in operation for at least 18 months, the same-hotel RevPAR was
RMB188 for the fourth quarter of 2019, representing a 5.4% decrease fromRMB199 for the fourth quarter of 2018, with a 2.7% decrease in ADR and a 2.4-percentage-point decrease in occupancy rate. The year-over-year decrease was mainly due to macroeconomic softness and more promotions.
Operational Highlights of full year 2019
- For the full year of 2019, the company opened 43 leased hotels and 1,672 manachised hotels and franchised hotels, and closed 54 leased hotels and 273 manachised and franchised hotels. As of
December 31, 2019 , the Company had 688 leased and owned hotels, 4,519 manachised hotels, and 411 franchised hotels in operation in 437 cities inChina andSingapore . The number of hotel rooms in operation totaled 536,876, an increase of 27.0% from a year ago.
- As of
December 31, 2019 , the Company had a total number of 2,262 hotels contracted or under construction, including 43 leased hotels and 2,219 manachised and franchised hotels. The pipeline represented 40% of the number of hotels in operation as the end of 2019.
- For the full year of 2019, the ADR for all hotels in operation was
RMB234 , increasing 3.6% year-over-year fromRMB226 in 2018. The occupancy rate for all hotels in operation was 84.4%, compared with 87.3% in 2018. As a result, the blended RevPAR for all hotels in operation wasRMB198 in 2019, a 0.1% increase fromRMB197 in 2018. Excluding our soft brands, the blended RevPAR for 2019 would have increased by 0.8% year-over-year.
- The same-hotel RevPAR was
RMB194 in 2019, a 3.1% decrease fromRMB201 in 2018, with a 0.3% decrease in ADR and a 2.5-percentage-point decrease in occupancy rate. In 2019, the economy hotels and the midscale and upscale hotels posted decreases of 3.0% and 3.2% in same-hotel RevPAR, respectively.
- As of
December 31, 2019 , H Rewards (Huazhu’s loyalty program) had approximately 153 million members, who contributed approximately 76% of room nights sold during the full year of 2019 and approximately 85% of room nights were sold through the Company’s own direct channels.
“Looking into 2020, the COVID-19 outbreak has been a major public health emergency in
“Despite this temporary challenge and disruption to our business, as the industry leader, we remain confident about the long-term growth potential of China’s lodging industry and we will capture this opportunity to further consolidate the hotel industry.
Fourth Quarter and Full Year of 2019 Financial Results
(RMB in millions) | Q4 2018 | Q3 2019 | Q4 2019 | 2018FY | 2019FY |
Revenues: | |||||
Leased and owned hotels | 1,942 | 2,089 | 1,921 | 7,470 | 7,718 |
Manachised and franchised hotels | 703 | 939 | 938 | 2,527 | 3,342 |
Others | 38 | 27 | 51 | 66 | 152 |
Net revenues | 2,683 | 3,055 | 2,910 | 10,063 | 11,212 |
Net revenues for the fourth quarter of 2019 were
Net revenues for the full year of 2019 were
Net revenues from leased and owned hotels for the fourth quarter of 2019 were
For the full year of 2019, net revenues from leased and owned hotels were
Net revenues from manachised and franchised hotels for the fourth quarter of 2019 were
For the full year of 2019, net revenues from manachised and franchised hotels were
Other revenues represent revenues generated from businesses other than the hotel operation, which mainly include revenues from the provision of IT products and services to hotels and revenues from Huazhu Mall™, totaling
For the full year of 2019, other revenues were
(RMB in millions) | Q4 2018 | Q3 2019 | Q4 2019 | 2018FY | 2019FY |
Operating costs and expenses: | |||||
Hotel operating costs | 1,737 | 1,834 | 1,879 | 6,476 | 7,190 |
Other operating costs | 8 | 11 | 21 | 15 | 57 |
Selling and marketing expenses | 108 | 113 | 134 | 348 | 426 |
General and administrative expenses | 269 | 277 | 330 | 851 | 1,061 |
Pre-opening expenses | 54 | 126 | 149 | 255 | 502 |
Total operating costs and expenses | 2,176 | 2,361 | 2,513 | 7,945 | 9,236 |
Hotel operating costs for the fourth quarter of 2019 were
For the full year of 2019, hotel operating costs were
Selling and marketing expenses for the fourth quarter of 2019 were
For the full year of 2019, selling and marketing expenses were
General and administrative expenses for the fourth quarter of 2019 were
For the full year of 2019, general and administrative expenses were
Pre-opening expenses for the fourth quarter of 2019 were
Pre-opening expenses for the full year of 2019 were
Other operating income, net for the fourth quarter of 2019 was
Other operating income, net for the full year of 2019 was RMB132 million (US$19 million), compared to RMB226 million in 2018. The year-over-year decrease was mainly attributable to one-time (i) the compensation of RMB35 million received from the selling shareholders of Crystal Orange as the final settlement of the sales and purchase transaction and (ii) the variance as a result of a one-off lease related compensation receipt of RMB75 million in 2018, and a one-off lease related compensation payment of RMB24 million in 2019,and (iii) partially offset by an increase in subsidies income received related to taxes paid.
Income from operations for the fourth quarter of 2019 was
Income from operations for the full year of 2019 was
Other income, net for the fourth quarter of 2019 was
Other income, net for the full year of 2019 was
Unrealized gains from fair value changes of equity securities for the fourth quarter of 2019 was
For the full year of 2019, unrealized gains from fair value changes of equity securities was
Income tax expense for the fourth quarter of 2019 was
Net income attributable to
Net income attributable to
Basic and diluted earnings per share/ADS. For the fourth quarter of 2019, basic earnings per share were
For the full year of 2019, basic earnings per share were
EBITDA (non-GAAP) for the fourth quarter of 2019 was
EBITDA (non-GAAP) for the full year of 2019 increased 56.5% to
Cash flow. Operating cash inflow for the fourth quarter of 2019 was
Operating cash inflow for the full year of 2019 was
Cash and cash equivalents and Restricted cash. As of
Debt financing. As of
Completion of the Deutsche Hospitality Acquisition and Related Credit Activity
On
In connection with the Deutsche Hospitality acquisition,
COVID-19 outbreak: response and impact
Since the COVID-19 outbreak in
The Chinese government has implemented strict nationwide containment measures against COVID-19, including but not limited to travel restrictions, lock-down of certain cities, hotel closures, etc. Such containment measures negatively affected our hotels’ occupancy and revenue. We have taken certain cost and cash flow mitigation measures to counter the negative impact of the lower revenue:
- Discussion with our leased hotel landlords for rent reduction and deferment;
- Reduced or eliminated our discretionary spending including marketing, non-essential training, and capital expenditures;
- Frozen new recruitments, streamlined our head office, and placed a number of our hotel teams on a temporary furlough and/or reduced workdays to adjust for the lower hotel occupancy.
The Chinese government also announced a number of relief measures to Chinese companies, including but not limited to encouraged rental waiver, reduction and delayed payment of social insurance and taxes, continued support from financial institutions, etc. These measures will partially offset the impact of our revenue loss.
It is possible that closure of our hotels and lower occupancy during this period, as a result of the Chinese government containment measures mentioned above, may amount to a technical event of default under our banking arrangements. We are currently working with all relevant parties to seek waivers wherever this is required. Since the outbreak, we have also received further support from our banks in the form of additional banking facilities and lower interest rates.
Due to the Chinese government’s effective containment measures of COVID-19 and our employees’ great efforts during this period, we have observed an initial recovery in our hotel operations since early March. We believe we have been through the lowest point when nearly 50% of our hotels in
Since early
The German government announced certain relief measures including the contribution by the German government to salary costs of our furloughed employees, the details of which are still being worked through. These government assistance measures should help lessen the negative effects of these closures.
We have initiated a series of cost and cash flow mitigation measures such as reduction in discretionary expenses, headcount freeze, reduction and deferment of capital expenditures, and rental payments, etc., to counter the impact due to hotel closures. We have also reached out to our banks for additional bank facilities to support our operations in
Guidance
Due to the impact of COVID-19,
In the first quarter of 2020,
The above forecast reflects the Company’s current and preliminary view, which is subject to change.
Conference Call
Huazhu’s management will host a conference call at
A recording of the conference call will be available after the conclusion of the conference call through
The conference call will also be webcast live over the Internet and can be accessed by all interested parties at the Company’s Web site, http://ir.huazhu.com.
Use of Non-GAAP Financial Measures
To supplement the Company’s unaudited consolidated financial results presented in accordance with
The Company believes that EBITDA is a useful financial metric to assess the operating and financial performance before the impact of investing and financing transactions and income taxes, given the significant investments that the Company has made in leasehold improvements, depreciation and amortization expense that comprise a significant portion of the Company’s cost structure. In addition, the Company believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of financial performance. The Company believes that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization expense attributable to capital expenditures. The Company also uses adjusted EBITDA, which is defined as EBITDA before share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities, to assess operating results of the hotels in operation. The Company believes that the exclusion of share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities helps facilitate year-on-year comparison of the results of operations as the share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities may not be indicative of Company operating performance.
The Company believes that unrealized gains and losses from changes in fair value of equity securities are generally meaningless in understanding our reported results or evaluating our economic performance of our businesses. These gains and losses have caused and will continue to cause significant volatility in periodic earnings.
Therefore, the Company believes adjusted EBITDA more closely reflects the performance capability of hotels. The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that the Company’s future results will be unaffected by other charges and gains considered to be outside the ordinary course of business.
The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets (including land use rights), income tax, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities have been and will be incurred and are not reflected in the presentation of adjusted EBITDA. Each of these items should also be considered in the overall evaluation of the results. The Company compensates for these limitations by providing the relevant disclosure of the depreciation and amortization, interest income, interest expense, income tax expense, share-based compensation expenses, and unrealized gains (losses) from fair value changes of equity securities and other relevant items both in the reconciliations to the
The terms EBITDA and adjusted EBITDA are not defined under
Reconciliations of the Company’s non-GAAP financial measures, including EBITDA and adjusted EBITDA, to the consolidated statement of operations information are included at the end of this press release.
About
Huazhu’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model,
For more information, please visit the Company’s website: http://ir.huazhu.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties, including statements regarding the Company’s capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project,” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results. Any or all of the Company’s forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions, risks and uncertainties and other factors which could cause actual events or results to be materially different from those expressed or implied in the forward-looking statements. In evaluating these statements, readers should consider various factors, including the anticipated growth strategies of the Company, the future results of operations and financial condition of the Company, the economic conditions of
1 Hotel turnover refers to total transaction value of room and non-room revenues from
2 The conversion of Renminbi (“RMB”) into
---Financial Tables and Operational Data Follow—
Unaudited Condensed Consolidated Balance Sheets | ||||||
RMB | RMB | US$ | ||||
(in millions) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | 4,262 | 3,234 | 465 | |||
Restricted cash | 622 | 10,765 | 1,546 | |||
Short-term investments | 89 | 2,908 | 418 | |||
Accounts receivable, net | 195 | 218 | 31 | |||
Loan receivables, net | 94 | 193 | 28 | |||
Amounts due from related parties | 176 | 182 | 26 | |||
Prepaid rent | 955 | - | - | |||
Inventories | 41 | 57 | 8 | |||
Other current assets | 540 | 699 | 100 | |||
Total current assets | 6,974 | 18,256 | 2,622 | |||
Property and equipment, net | 5,018 | 5,854 | 841 | |||
Intangible assets, net | 1,834 | 1,662 | 239 | |||
Operating lease right-of-use assets | - | 20,875 | 2,998 | |||
Land use rights, net | 220 | 215 | 31 | |||
Long-term investments | 6,152 | 1,929 | 277 | |||
2,630 | 2,657 | 382 | ||||
Loan receivables, net | 189 | 280 | 40 | |||
Other assets | 471 | 707 | 102 | |||
Deferred tax assets | 505 | 548 | 79 | |||
Total assets | 23,993 | 52,983 | 7,611 | |||
LIABILITIES AND EQUITY | ||||||
Current liabilities: | ||||||
Short-term debt | 948 | 8,499 | 1,220 | |||
Accounts payable | 890 | 1,176 | 169 | |||
Amounts due to related parties | 75 | 95 | 14 | |||
Salary and welfare payables | 521 | 491 | 71 | |||
Deferred revenue | 1,005 | 1,179 | 169 | |||
Operating lease liabilities, current | - | 3,082 | 443 | |||
Accrued expenses and other current liabilities | 1,607 | 1,856 | 267 | |||
Dividends payable | 658 | 678 | 97 | |||
Income tax payable | 265 | 231 | 33 | |||
Total current liabilities | 5,969 | 17,287 | 2,483 | |||
Long-term debt | 8,812 | 8,084 | 1,161 | |||
Deferred rent | 1,507 | - | - | |||
Operating lease liabilities, noncurrent | - | 18,496 | 2,657 | |||
Deferred revenue | 458 | 559 | 80 | |||
Other long-term liabilities | 453 | 566 | 81 | |||
Deferred tax liabilities | 475 | 491 | 71 | |||
Total liabilities | 17,674 | 45,483 | 6,533 | |||
Equity: | ||||||
Ordinary shares | 0 | 0 | 0 | |||
(107) | (107) | (15) | ||||
Additional paid-in capital | 3,713 | 3,834 | 551 | |||
Retained earnings | 2,610 | 3,701 | 532 | |||
Accumulated other comprehensive income (loss) | (42) | (49) | (7) | |||
6,174 | 7,379 | 1,061 | ||||
Noncontrolling interest | 145 | 121 | 17 | |||
Total equity | 6,319 | 7,500 | 1,078 | |||
Total liabilities and equity | 23,993 | 52,983 | 7,611 |
Unaudited Condensed Consolidated Statements of Comprehensive Income | ||||||||||||||
Quarter Ended | Year Ended | |||||||||||||
December 31, 2018 |
September 30, 2019 |
December 31, 2019 |
December 31, 2018 |
December 31, 2019 |
||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
(in millions, except shares, per share and per ADS data) | ||||||||||||||
Revenues: | ||||||||||||||
Leased and owned hotels | 1,942 | 2,089 | 1,921 | 276 | 7,470 | 7,718 | 1,109 | |||||||
Manachised and franchised hotels | 703 | 939 | 938 | 135 | 2,527 | 3,342 | 480 | |||||||
Others | 38 | 27 | 51 | 7 | 66 | 152 | 22 | |||||||
Net revenues | 2,683 | 3,055 | 2,910 | 418 | 10,063 | 11,212 | 1,611 | |||||||
Operating costs and expenses: | ||||||||||||||
Hotel operating costs: | ||||||||||||||
Rents | (662) | (664) | (663) | (95) | (2,406) | (2,624) | (377) | |||||||
Utilities | (87) | (105) | (91) | (13) | (399) | (404) | (58) | |||||||
Personnel costs | (436) | (466) | (490) | (70) | (1,663) | (1,854) | (266) | |||||||
Depreciation and amortization | (223) | (243) | (257) | (37) | (869) | (960) | (138) | |||||||
Consumables, food and beverage | (179) | (203) | (215) | (31) | (673) | (793) | (114) | |||||||
Others | (150) | (153) | (163) | (24) | (466) | (555) | (80) | |||||||
Total hotel operating costs | (1,737) | (1,834) | (1,879) | (270) | (6,476) | (7,190) | (1,033) | |||||||
Other operating costs | (8) | (11) | (21) | (3) | (15) | (57) | (8) | |||||||
Selling and marketing expenses | (108) | (113) | (134) | (19) | (348) | (426) | (61) | |||||||
General and administrative expenses | (269) | (277) | (330) | (47) | (851) | (1,061) | (152) | |||||||
Pre-opening expenses | (54) | (126) | (149) | (22) | (255) | (502) | (72) | |||||||
Total operating costs and expenses | (2,176) | (2,361) | (2,513) | (361) | (7,945) | (9,236) | (1,326) | |||||||
Other operating income (expense), net | 85 | 9 | 89 | 13 | 226 | 132 | 19 | |||||||
Income from operations | 592 | 703 | 486 | 70 | 2,344 | 2,108 | 304 | |||||||
Interest income | 32 | 46 | 39 | 6 | 148 | 160 | 23 | |||||||
Interest expense | (70) | (72) | (83) | (12) | (244) | (315) | (45) | |||||||
Other (expense) income, net | 1 | 86 | 45 | 6 | 203 | 331 | 48 | |||||||
Unrealized gains (losses) from fair value changes of equity securities | (756) | 28 | 230 | 33 | (914) | 316 | 44 | |||||||
Foreign exchange (loss) gain | (42) | (108) | 69 | 10 | (144) | (35) | (5) | |||||||
Income (Loss) before income taxes | (243) | 683 | 786 | 113 | 1,393 | 2,565 | 369 | |||||||
Income tax expense | (106) | (191) | (133) | (19) | (569) | (640) | (92) | |||||||
Gain (Loss) from equity method investments | (64) | (60) | (28) | (4) | (97) | (164) | (24) | |||||||
Net income (loss) | (413) | 432 | 625 | 90 | 727 | 1,761 | 253 | |||||||
Net (income) loss attributable to noncontrolling interest | (6) | (1) | (6) | (1) | (11) | 8 | 1 | |||||||
Net income (loss) attributable to |
(419) | 431 | 619 | 89 | 716 | 1,769 | 254 | |||||||
Other comprehensive income | ||||||||||||||
Foreign currency translation adjustments, net of tax | 20 | (65) | 29 | 4 | (169) | (7) | (1) | |||||||
Comprehensive income (loss) | (393) | 367 | 654 | 94 | 558 | 1,754 | 252 | |||||||
Comprehensive (income) loss attributable to noncontrolling interest | (6) | (1) | (6) | (1) | (11) | 8 | 1 | |||||||
Comprehensive income (loss) attributable to |
(399) | 366 | 648 | 93 | 547 | 1,762 | 253 | |||||||
Earnings (Losses) per share/ADS: | ||||||||||||||
Basic | (1.48) | 1.51 | 2.17 | 0.31 | 2.54 | 6.22 | 0.89 | |||||||
Diluted | (1.48) | 1.45 | 2.07 | 0.30 | 2.49 | 5.94 | 0.85 | |||||||
Weighted average number of shares used in computation: | ||||||||||||||
Basic | 282,500,261 | 284,657,577 | 285,256,343 | 285,256,343 | 281,717,485 | 284,305,138 | 284,305,138 | |||||||
Diluted | 282,500,261 | 304,311,266 | 304,319,151 | 304,319,151 | 303,605,809 | 304,309,890 | 304,309,890 |
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||||
Quarter Ended | Year Ended | |||||||||||||
December 31, 2018 |
September 30, 2019 |
December 31, 2019 |
December 31, 2018 |
December 31, 2019 |
||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
( in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net (loss) income | (413) | 432 | 625 | 90 | 727 | 1,761 | 253 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Share-based compensation | 27 | 31 | 22 | 3 | 83 | 110 | 15 | |||||||
Depreciation and amortization, and other |
236 | 257 | 273 | 39 | 919 | 1,019 | 146 | |||||||
Loss (Income) from equity method investments, net of dividends | 124 | 99 | 37 | 5 | 157 | 213 | 31 | |||||||
Investment (income) loss | 798 | (6) | (353) | (51) | 1,009 | (477) | (68) | |||||||
Changes in operating assets and liabilities |
(225) | 20 | 387 | 56 | 58 | 482 | 69 | |||||||
Other | 27 | 174 | (12) | (2) | 96 | 185 | 27 | |||||||
Net cash provided by operating activities | 574 | 1,007 | 979 | 140 | 3,049 | 3,293 | 473 | |||||||
Investing activities: | ||||||||||||||
Capital expenditures | (312) | (390) | (459) | (66) | (1,195) | (1,535) | (221) | |||||||
Acquisitions, net of cash received | (27) | (23) | (160) | (23) | (497) | (244) | (35) | |||||||
Purchase of long-term investments | (366) | (118) | (63) | (9) | (4,960) | (329) | (47) | |||||||
Proceeds from maturity/sale of long-term investments | 4 | 533 | 1,281 | 184 | 177 | 2,002 | 288 | |||||||
Loan advances | (55) | (131) | (76) | (11) | (320) | (541) | (78) | |||||||
Loan collections | 21 | 148 | 92 | 13 | 433 | 347 | 50 | |||||||
Other | 3 | (8) | 20 | 3 | 16 | 15 | 2 | |||||||
Net cash provided by (used in) investing activities | (732) | 11 | 635 | 91 | (6,346) | (285) | (41) | |||||||
Financing activities: | ||||||||||||||
Net proceeds from issuance of ordinary shares upon exercise of options | 1 | 2 | 4 | 1 | 14 | 14 | 2 | |||||||
Proceeds from debt | 850 | 2 | 11,064 | 1,589 | 5,239 | 15,392 | 2,211 | |||||||
Repayment of debt | (294) | (605) | (3,136) | (450) | (936) | (8,682) | (1,247) | |||||||
Dividend paid | - | - | - | - | - | (658) | (95) | |||||||
Other | (74) | (37) | (2) | - | (69) | (21) | (3) | |||||||
Net cash provided by (used in) financing activities | 483 | (638) | 7,930 | 1,140 | 4,248 | 6,045 | 868 | |||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 12 | 6 | 4 | 1 | (23) | 62 | 9 | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 337 | 386 | 9,548 | 1,372 | 928 | 9,115 | 1,309 | |||||||
Cash, cash equivalents and restricted cash at the beginning of the period | 4,547 | 4,065 | 4,451 | 639 | 3,956 | 4,884 | 702 | |||||||
Cash, cash equivalents and restricted cash at the end of the period | 4,884 | 4,451 | 13,999 | 2,011 | 4,884 | 13,999 | 2,011 | |||||||
Unaudited Reconciliation of GAAP and Non-GAAP Results | ||||||||||||
Quarter Ended |
||||||||||||
GAAP Result | % of Net Revenues |
Share-based Compensation |
% of Net Revenues |
Non-GAAP Result |
% of Net Revenues |
|||||||
RMB | RMB | RMB | ||||||||||
(in millions) | ||||||||||||
Hotel operating costs | 1,879 | 64.6% | 7 | 0.2% | 1,872 | 64.4% | ||||||
Other operating costs | 21 | 0.7% | - | 0.0% | 21 | 0.7% | ||||||
Selling and marketing expenses | 134 | 4.6% | 1 | 0.0% | 133 | 4.6% | ||||||
General and administrative expenses | 330 | 11.3% | 14 | 0.5% | 316 | 10.8% | ||||||
Pre-opening expenses | 149 | 5.1% | - | 0.0% | 149 | 5.1% | ||||||
Total operating costs and expenses | 2,513 | 86.3% | 22 | 0.7% | 2,491 | 85.6% | ||||||
Income from operations | 486 | 16.7% | 22 | 0.7% | 508 | 17.4% | ||||||
Quarter Ended |
||||||||||||
GAAP Result | % of Net Revenues |
Share-based Compensation |
% of Net Revenues |
Non-GAAP Result |
% of Net Revenues |
|||||||
US$ | US$ | US$ | ||||||||||
(in millions) | ||||||||||||
Hotel operating costs | 270 | 64.6% | 1 | 0.2% | 269 | 64.4% | ||||||
Other operating costs | 3 | 0.7% | - | 0.0% | 3 | 0.7% | ||||||
Selling and marketing expenses | 19 | 4.6% | 0 | 0.0% | 19 | 4.6% | ||||||
General and administrative expenses | 47 | 11.3% | 2 | 0.5% | 45 | 10.8% | ||||||
Pre-opening expenses | 22 | 5.1% | - | 0.0% | 22 | 5.1% | ||||||
Total operating costs and expenses | 361 | 86.3% | 3 | 0.7% | 358 | 85.6% | ||||||
Income from operations | 70 | 16.7% | 3 | 0.7% | 73 | 17.4% | ||||||
Quarter Ended |
||||||||||||
GAAP Result | % of Net Revenues |
Share-based Compensation |
% of Net Revenues |
Non-GAAP Result |
% of Net Revenues |
|||||||
RMB | RMB | RMB | ||||||||||
(in millions) | ||||||||||||
Hotel operating costs | 1,834 | 60.0% | 10 | 0.3% | 1,824 | 59.7% | ||||||
Other operating costs | 11 | 0.4% | - | 0.0% | 11 | 0.4% | ||||||
Selling and marketing expenses | 113 | 3.7% | 1 | 0.0% | 112 | 3.7% | ||||||
General and administrative expenses | 277 | 9.1% | 20 | 0.7% | 257 | 8.4% | ||||||
Pre-opening expenses | 126 | 4.1% | - | 0.0% | 126 | 4.1% | ||||||
Total operating costs and expenses | 2,361 | 77.3% | 31 | 1.0% | 2,330 | 76.3% | ||||||
Income from operations | 703 | 23.0% | 31 | 1.0% | 734 | 24.0% | ||||||
Quarter Ended |
||||||||||||
GAAP Result | % of Net Revenues |
Share-based Compensation |
% of Net Revenues |
Non-GAAP Result |
% of Net Revenues |
|||||||
RMB | RMB | RMB | ||||||||||
(in millions) | ||||||||||||
Hotel operating costs | 1,737 | 64.7% | 9 | 0.3% | 1,728 | 64.4% | ||||||
Other operating costs | 8 | 0.3% | - | 0.0% | 8 | 0.3% | ||||||
Selling and marketing expenses | 108 | 4.0% | 1 | 0.0% | 107 | 4.0% | ||||||
General and administrative expenses | 269 | 10.0% | 17 | 0.7% | 252 | 9.3% | ||||||
Pre-opening expenses | 54 | 2.0% | - | 0.0% | 54 | 2.0% | ||||||
Total operating costs and expenses | 2,176 | 81.0% | 27 | 1.0% | 2,149 | 80.0% | ||||||
Income from operations | 592 | 22.1% | 27 | 1.0% | 619 | 23.1% | ||||||
Year Ended |
||||||||||||
GAAP Result | % of Net Revenues |
Share-based Compensation |
% of Net Revenues |
Non-GAAP Result |
% of Net Revenues |
|||||||
RMB | RMB | RMB | ||||||||||
(in millions) | ||||||||||||
Hotel operating costs | 7,190 | 64.1% | 35 | 0.3% | 7,155 | 63.8% | ||||||
Other operating costs | 57 | 0.5% | - | 0.0% | 57 | 0.5% | ||||||
Selling and marketing expenses | 426 | 3.8% | 3 | 0.0% | 423 | 3.8% | ||||||
General and administrative expenses | 1,061 | 9.5% | 72 | 0.6% | 989 | 8.9% | ||||||
Pre-opening expenses | 502 | 4.5% | - | 0.0% | 502 | 4.5% | ||||||
Total operating costs and expenses | 9,236 | 82.4% | 110 | 0.9% | 9,126 | 81.5% | ||||||
Income from operations | 2,108 | 18.8% | 110 | 1.0% | 2,218 | 19.8% | ||||||
Year Ended |
||||||||||||
GAAP Result | % of Net Revenues |
Share-based Compensation |
% of Net Revenues |
Non-GAAP Result |
% of Net Revenues |
|||||||
US$ | US$ | US$ | ||||||||||
(in millions) | ||||||||||||
Hotel operating costs | 1,033 | 64.1% | 5 | 0.3% | 1,028 | 63.8% | ||||||
Other operating costs | 8 | 0.5% | - | 0.0% | 8 | 0.5% | ||||||
Selling and marketing expenses | 61 | 3.8% | 0 | 0.0% | 61 | 3.8% | ||||||
General and administrative expenses | 152 | 9.5% | 10 | 0.6% | 142 | 8.9% | ||||||
Pre-opening expenses | 72 | 4.5% | - | 0.0% | 72 | 4.5% | ||||||
Total operating costs and expenses | 1,326 | 82.4% | 15 | 0.9% | 1,311 | 81.5% | ||||||
Income from operations | 304 | 18.8% | 15 | 1.0% | 319 | 19.8% | ||||||
Year Ended |
||||||||||||
GAAP Result | % of Net Revenues |
Share-based Compensation |
% of Net Revenues |
Non-GAAP Result |
% of Net Revenues |
|||||||
RMB | RMB | RMB | ||||||||||
(in millions) | ||||||||||||
Hotel operating costs | 6,476 | 64.4% | 27 | 0.3% | 6,449 | 64.1% | ||||||
Other operating costs | 15 | 0.1% | - | 0.0% | 15 | 0.1% | ||||||
Selling and marketing expenses | 348 | 3.5% | 3 | 0.0% | 345 | 3.5% | ||||||
General and administrative expenses | 851 | 8.5% | 53 | 0.5% | 798 | 8.0% | ||||||
Pre-opening expenses | 255 | 2.5% | - | 0.0% | 255 | 2.5% | ||||||
Total operating costs and expenses | 7,945 | 79.0% | 83 | 0.8% | 7,862 | 78.2% | ||||||
Income from operations | 2,344 | 23.3% | 83 | 0.8% | 2,427 | 24.1% | ||||||
Unaudited Reconciliation of GAAP and Non-GAAP Results | ||||||||||||||
Quarter Ended | Year Ended | |||||||||||||
December 31, 2018 |
September 30, 2019 |
December 31, 2019 |
December 31, 2018 |
December 31, 2019 |
||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
(in millions, except shares, per share and per ADS data) | ||||||||||||||
Net income (loss) attributable to |
(419) | 431 | 619 | 89 | 716 | 1,769 | 254 | |||||||
Share-based compensation expenses | 27 | 31 | 22 | 3 | 83 | 110 | 15 | |||||||
Unrealized (gains) losses from fair value changes of equity securities | 756 | (28) | (230) | (33) | 914 | (316) | (44) | |||||||
Adjusted net income attributable to |
364 | 434 | 411 | 59 | 1,713 | 1,563 | 225 | |||||||
Adjusted earnings (losses) per share/ADS (non-GAAP) | ||||||||||||||
Basic | 1.29 | 1.52 | 1.44 | 0.21 | 6.08 | 5.50 | 0.79 | |||||||
Diluted | 1.23 | 1.46 | 1.38 | 0.20 | 5.77 | 5.27 | 0.76 | |||||||
Weighted average number of shares used in computation | ||||||||||||||
Basic | 282,500,261 | 284,657,577 | 285,256,343 | 285,256,343 | 281,717,485 | 284,305,138 | 284,305,138 | |||||||
Diluted | 282,500,261 | 304,311,266 | 304,319,151 | 304,319,151 | 303,605,809 | 304,309,890 | 304,309,890 | |||||||
Quarter Ended | Year Ended | |||||||||||||
December 31, 2018 |
September 30, 2019 |
December 31, 2019 |
December 31, 2018 |
December 31, 2019 |
||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
(in millions, except per share and per ADS data) | ||||||||||||||
Net income (loss) attributable to |
(419) | 431 | 619 | 89 | 716 | 1,769 | 254 | |||||||
Interest income | (32) | (46) | (39) | (6) | (148) | (160) | (23) | |||||||
Interest expense | 70 | 72 | 83 | 12 | 244 | 315 | 45 | |||||||
Income tax expense | 106 | 191 | 133 | 19 | 569 | 640 | 92 | |||||||
Depreciation and amortization | 229 | 250 | 266 | 38 | 891 | 991 | 142 | |||||||
EBITDA (non-GAAP) | (46) | 898 | 1,062 | 152 | 2,272 | 3,555 | 510 | |||||||
Share-based compensation | 27 | 31 | 22 | 3 | 83 | 110 | 15 | |||||||
Unrealized (gains) losses from fair value changes of equity securities | 756 | (28) | (230) | (33) | 914 | (316) | (44) | |||||||
Adjusted EBITDA (non-GAAP) | 737 | 901 | 854 | 122 | 3,269 | 3,349 | 481 |
Operational Data | |||
As of | |||
2018 | 2019 | 2019 | |
Total hotels in operation: | 4,230 | 5,151 | 5,618 |
Leased and owned hotels | 699 | 697 | 688 |
Manachised hotels | 3,309 | 4,087 | 4,519 |
Franchised hotels | 222 | 367 | 411 |
Total hotel rooms in operation | 422,747 | 504,414 | 536,876 |
Leased and owned hotels | 86,787 | 88,206 | 87,465 |
Manachised hotels | 314,932 | 387,174 | 418,700 |
Franchised hotels | 21,028 | 29,034 | 30,711 |
Number of cities | 403 | 420 | 437 |
Operating Metrics
For the quarter ended | ||||||||
yoy | ||||||||
2018 | 2019 | 2019 | change | |||||
Average daily room rate (in RMB) | ||||||||
Leased and owned hotels | 275 | 288 | 277 | 0.9% | ||||
Manachised and franchised hotels | 218 | 235 | 223 | 2.1% | ||||
Blended | 230 | 245 | 232 | 0.9% | ||||
Occupancy rate (as a percentage) | ||||||||
Leased and owned hotels | 86.7% | 90.0% | 84.7% | -2.0pp | ||||
Manachised and franchised hotels | 84.8% | 87.2% | 81.6% | -3.1pp | ||||
Blended | 85.2% | 87.7% | 82.2% | -3.0pp | ||||
RevPAR (in RMB) | ||||||||
Leased and owned hotels | 238 | 259 | 235 | -1.4% | ||||
Manachised and franchised hotels | 185 | 205 | 182 | -1.7% | ||||
Blended | 196 | 215 | 191 | -2.7%(2) | ||||
(2) Excluding our soft brands (
For the full year ended | ||||||
yoy | ||||||
2018 | 2019 | change | ||||
Average daily room rate (in RMB) | ||||||
Leased and owned hotels | 267 | 276 | 3.6% | |||
Manachised and franchised hotels | 214 | 224 | 4.6% | |||
Blended | 226 | 234 | 3.6% | |||
Occupancy rate (as a percentage) | ||||||
Leased and owned hotels | 89.0% | 87.0% | -2.0% | |||
Manachised and franchised hotels | 86.9% | 83.8% | -3.1% | |||
Blended | 87.3% | 84.4% | -3.0% | |||
RevPAR (in RMB) | ||||||
Leased and owned hotels | 237 | 240 | 1.2% | |||
Manachised and franchised hotels | 186 | 188 | 0.8% | |||
Blended | 197 | 198 | 0.1%(3) | |||
(3) Excluding our soft brands (
Business Update by Segment
As of |
|||||||
Number of Hotels in Operation |
Number of Rooms in Operation |
||||||
Economy hotels | 3,485 | 290,615 | |||||
2,372 | 224,626 | ||||||
465 | 28,153 | ||||||
648 | 37,836 | ||||||
Midscale and upscale hotels | 2,133 | 246,261 | |||||
214 | 19,748 | ||||||
185 | 20,533 | ||||||
55 | 6,681 | ||||||
350 | 30,363 | ||||||
831 | 104,521 | ||||||
248 | 28,821 | ||||||
85 | 11,182 | ||||||
46 | 4,133 | ||||||
9 | 883 | ||||||
68 | 12,502 | ||||||
9 | 2,928 | ||||||
4 | 772 | ||||||
6 | 1,250 | ||||||
17 | 648 | ||||||
6 | 1,296 | ||||||
Total | 5,618 | 536,876 | |||||
Same-hotel operational data by segment | |||||||||||||||||||||||
Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||||||||||
As of | For the quarter ended | yoy | For the quarter ended | yoy | For the quarter ended | yoy | |||||||||||||||||
change | change | change | |||||||||||||||||||||
2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | (p.p.) | |||||||||||||||
Economy hotels | 2,467 | 2,467 | 165 | 155 | -6.2 | % | 183 | 179 | -2.4 | % | 90.0 | % | 86.5 | % | -3.5 | ||||||||
Leased and owned hotels | 409 | 409 | 180 | 172 | -4.4 | % | 200 | 198 | -0.7 | % | 90.2 | % | 86.9 | % | -3.3 | ||||||||
Manachised and franchised hotels | 2,058 | 2,058 | 161 | 151 | -6.7 | % | 179 | 174 | -2.9 | % | 90.0 | % | 86.4 | % | -3.6 | ||||||||
Midscale and upscale hotels | 950 | 950 | 266 | 253 | -4.7 | % | 324 | 309 | -4.4 | % | 82.0 | % | 81.8 | % | -0.2 | ||||||||
Leased and owned hotels | 199 | 199 | 330 | 309 | -6.3 | % | 389 | 366 | -5.9 | % | 84.8 | % | 84.4 | % | -0.3 | ||||||||
Manachised and franchised hotels | 751 | 751 | 243 | 233 | -4.1 | % | 300 | 289 | -3.8 | % | 81.1 | % | 80.9 | % | -0.2 | ||||||||
Total | 3,417 | 3,417 | 199 | 188 | -5.4 | % | 228 | 222 | -2.7 | % | 87.3 | % | 84.9 | % | -2.4 | ||||||||
Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||||||||||
As of | For the year ended | yoy | For the year ended | yoy | For the year ended | yoy | |||||||||||||||||
change | change | change | |||||||||||||||||||||
2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | (p.p.) | |||||||||||||||
Economy hotels | 2,467 | 2,467 | 170 | 164 | -3.0 | % | 184 | 184 | 0.3 | % | 92.2 | % | 89.1 | % | -3.1 | ||||||||
Leased and owned hotels | 409 | 409 | 183 | 182 | -0.4 | % | 198 | 202 | 1.7 | % | 92.0 | % | 90.0 | % | -2.0 | ||||||||
Manachised and franchised hotels | 2,058 | 2,058 | 166 | 160 | -3.8 | % | 180 | 180 | -0.2 | % | 92.2 | % | 88.9 | % | -3.3 | ||||||||
Midscale and upscale hotels | 950 | 950 | 269 | 261 | -3.2 | % | 323 | 317 | -1.8 | % | 83.4 | % | 82.2 | % | -1.2 | ||||||||
Leased and owned hotels | 199 | 199 | 332 | 317 | -4.6 | % | 385 | 374 | -3.0 | % | 86.3 | % | 84.9 | % | -1.4 | ||||||||
Manachised and franchised hotels | 751 | 751 | 245 | 239 | -2.5 | % | 298 | 294 | -1.2 | % | 82.3 | % | 81.2 | % | -1.1 | ||||||||
Total | 3,417 | 3,417 | 201 | 194 | -3.1 | % | 224 | 224 | -0.3 | % | 89.5 | % | 87.0 | % | -2.5 | ||||||||
Contact Information
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Source: Huazhu Group Limited