Four Seasons Hotels reported its results for the fourth quarter of 2004 and for the year ended December 31, 2004.
“2004 marked an important year for Four Seasons. We had a significant rebound in our profitability that came on the heels of almost three of the most difficult years in the history of the lodging industry. During 2004, we achieved near record levels of RevPAR growth and entered into more letters of intent relating to new management opportunities than we ever have in a single year,” said Isadore Sharp, Chairman and CEO. “We believe that this demonstrates the strength of Four Seasons market position and strategy, as well as our potential for future growth. With the hotels and resorts we currently have under construction and the agreements signed this year, we are confident that we will have 100 properties under management within the next five to seven years.”
RevPAR of worldwide Core Hotels increased over 15% for the year ended December 31, 2004, as compared to 2003. Net earnings increased 517.2% for the year ended December 31, 2004 to $33.2 million, as compared to $5.4 million in 2003. Net earnings increased 33% for the quarter ended December 31, 2004 to $15.6 million, as compared to $11.7 million for the same period in 2003.
The gross operating margin of our worldwide Core Hotels increased by 240 basis points to 29.3% for the year ended December 31, 2004, as compared to 2003.
Management operations profit margin improved by 330 basis points to 69.3% for the year ended December 31, 2004, as compared to 2003.
Working capital generated by management operations increased to over $100 million for the year ended December 31, 2004, as compared to $81 million in 2003.
Cash and cash equivalents increased by over $100 million to $272.5 million as at December 31, 2004, as compared to December 31, 2003.
“The fundamentals of our management business model are extremely solid. We continue to generate significant amounts of cash; more than enough to satisfy our currently anticipated needs for our management operations growth program,” said Douglas L. Ludwig, Chief Financial Officer and Executive Vice President. “We are also very pleased with our hotel operating results and our earnings on a full-year basis. The translation for accounting purposes of our US dollar fee revenues to Canadian dollars – and some unusual events at certain hotels, which predominantly affected incentive fees – had a negative impact on our fourth quarter earnings. However the outlook for 2005 is very encouraging, and if current trends continue, we expect a better pricing environment in which we expect RevPAR to improve by more than 10% and our hotel profit margins are anticipated to improve by more than 200 basis points.”
“During 2004, we signed 12 letters of intent, more than we have ever achieved in any single year. The pace of new opportunities continues to be very strong in 2005,” said Kathleen Taylor, President Worldwide Business Operations. “We are fortunate to work with capital partners and hotel owners who share our excitement and interest in expanding the Four Seasons brand to new markets. Both the number and the quality of these projects are exceptional. They will enhance the Four Seasons brand, which we expect will attract even more opportunities for the future.”
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