Earnings call transcript: Minor Hotels sees 58% profit jump in Q2 2025

Minor Hotels Europe & Americas reported a strong financial performance for the second quarter of 2025, with significant growth in revenue and profit. The company’s net recurring profit soared by 30%, and total net profit increased by 58% compared to the same period last year. Despite these gains, the stock price remained stable, closing at its 52-week high of €6.5.

Key Takeaways

• Total net profit increased by 58% to €112 million.
• Revenue for the first half of 2025 rose by 5% to €1.21 billion.
• Strong performance in the Latin American market with a 9% revenue increase.
• New hotel openings in Brazil and Europe contributed to growth.
• Cost discipline efforts maintained, supporting EBITDA growth.

Company Performance

Minor Hotels Europe & Americas demonstrated robust performance in Q2 2025, driven by strong demand in both business and leisure sectors. The company expanded its portfolio with new hotel openings, which bolstered its revenue and market presence. Revenue growth was particularly strong in Latin America, where the company saw a 9% increase at constant exchange rates.

Financial Highlights

• Total Revenue: €1.21 billion (up 5% from H1 2024)
• RevPAR: €102 (up 5.9% from H1 2024)
• EBITDA: €317 million (up 7%)
• Net Recurring Profit: €86 million (up 30%)
• Total Net Profit: €112 million (up 58%)

Outlook & Guidance

The company maintains a positive outlook for Q3 2025, citing a healthy demand trend. Minor Hotels plans to continue focusing on operational efficiencies and expects demand to align with current expectations. This optimistic outlook is supported by analyst consensus, which currently stands at "Strong Buy" according to InvestingPro data. The stock has shown resilience with a positive 6-month return of 6.74%, despite a YTD decline of 7.47%.

Executive Commentary

Gonzalo Aguilar, CEO, remarked, "The healthy operating trend during the second quarter was due to business and leisure demand remained strong." Ana Muñoz Sánchez, CFO, highlighted, "Revenue growth coupled with cost discipline efforts allowed to report a gross operating profit of €432 million."

Risks and Challenges

• Economic fluctuations in key markets could impact demand.
• Exchange rate volatility may affect financial performance.
• Increased competition in the hospitality sector.
• Potential supply chain disruptions affecting hotel operations.
• Rising operational costs could pressure margins.

Minor Hotels Europe & Americas continues to capitalize on strong market demand and strategic expansions, positioning itself for sustained growth in the coming quarters.

Full transcript - Minor Hotels Europe & Americas SA (NHH) Q2 2025:

Conference Operator: Good morning ladies and gentlemen. Welcome to the Minor Hotels Europe & Americas first half 2025 results conference call. At this time, online journalism only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Please be advised that this call is being recorded today, Thursday, July 24, 2025. I would now like to turn the conference over to Javier Vega-Penichet. Please go ahead.

Javier Vega-Penichet, Investor Relations, Minor Hotels Europe & Americas: Good morning, welcome to Minor Hotels Europe & Americas 2nd Quarter and 1st Half 2025 Results Conference Call. This is Javier Vega-Penichet from Investor Relations. To start, our CEO Gonzalo Aguilar will serve the key drivers behind the good set of results explained by the persistent healthy demand and the continuous improvement of our portfolio. Our CFO Ana Muñoz Sánchez will provide a more detailed description of the results, the cash flow evolution that continues improving our financial position, and the recent debt optimization executed. At the end, we will open a Q&A session to answer any questions you may have. Now I hand over the call to Gonzalo.

Gonzalo Aguilar, CEO, Minor Hotels Europe & Americas: Good morning and thank you for joining us today. This is Gonzalo speaking. The healthy operating trend during the second.

Quarter.

Was due to business and leisure demand remained strong, ensuring a sustainable and.

Balanced RevPAR growth between ADR and occupancy in the first half of the year.

Let me start with some key performance indicators. RevPAR reached €102 in the first semester, representing an increase of 5.9% versus H1 2024. Excluding perimeter changes, RevPAR grew by 3.5% in the first half of 2025, plus 5.1% in Q1 and plus 2.3% in Q2. The lower growth in Q2 is fully.

Explained by the strong calendar of events in Europe in 2024.

Occupancy grew in all regions.

First six months and ADR contributed with 55% of the RevPAR growth.

Revenues reached €1.2 billion in the first half of 2025, representing an increase.

Of 5% or €61 million compared to 2024. I’d like to highlight that the growth.

Excluding perimeter changes and with constant exchange rates.

Was 5% or €56 million.

Q2 figures explained on the calendar of events of last year. Revenue growth excluding.

Perimeter changes and with constant exchange rates was 4% or €28 million compared to the 6% reported in the first quarter.

Our constant focus on cost and operational.

Efficiencies allowed us to report an EBITDA.

Of €317 million, meaning an increase.

Of 7% or €19 million versus 2024.

Excluding IFRS 16 accounting impact, EBITDA reached.

€177 million, an increase of €14 million or 9% versus the first half of 2024, with a 0.4 percentage point higher margin and a flow through ratio of 23%.

On this improvement, portfolio changes contributed 61%.

To the EBITDA growth.

Net recurring profit in the first half.

Of 2025 was €86 million.

Growth of $20 million or 30% from.

2024 and including the positive €26 million contribution from the non-recurring asset rotations reported in Q1, total reported net profit amounted to €112 million in the first six months.

Moving to the key highlights of the.

Balance sheet, net financial debt decreased by $130 million, explained by the $85 million disposal of assets in Q1 organic cash.

Flow generation, and despite ordinary CAPEX invested.

In the period, which was $78 million.

The strong liquidity has permitted to fully redeem on July 2 the $400 million.

In senior secured notes with available cash and the new $200 million term loan signed in April.

To conclude, after presenting a good set of results with sustained growth in the.

First six months, let me share that the demand trend remains healthy in Q3 and in line with our expectations.

Ana Muñoz Sánchez will give you more details.

On the results on the balance sheet.

Ana Muñoz Sánchez, CFO, Minor Hotels Europe & Americas: Thank you, Javier, this is Ana.

Good morning everyone. Going to the details of the results presentation on page 4. Reported revenue in the first half of 2025 was €1.21 billion compared to €1.14 billion reported in the same period.

Of last year, implying growth of $61 million or plus 5% out of the.

$61 million revenue growth year.

On year, $37 million came from the like for like hotels which grew 4%, $19 million from the refurbishment perimeter.

€24 million from changes in perimeter.

Mainly new openings from Brazil portfolio as.

Tivoli Eco Resort, Praia do Forte.

Tivoli São Paulo as well and Anantara.

Palaijan, San Viela, NH Collection, Helsinki Grandanza, and NH Collection Copenhagen Grand Juan. Finally, currency evolution deducted $19 million.

Revenues mainly due to Latin America currencies being.

Argentine Peso the most impacted. Moving to page five, RevPAR reached €102.

In the first half, or plus 5.9%.

Above the €96 reported in half one.

2024 ADR contributed with 55% of RevPAR growth, reaching €147 in half one, implying an increase of 3% versus half one 2023 or €143 ADR view in all.

Regions except Central Europe that was affected.

By a positive calendar of events in Europe in 2024.

In addition, occupancy reached 69% in half.

1.8% versus half one 2024.

Growing in all regions.

Moving to page six, we have seen.

A strong operating trend across all regions in the first six months. The year-on-year evolution in the like-for-like perimeter by country is.

Spain up 5% compared to half.

2024 with solid growth in Madrid, Barcelona and secondary cities. In Italy the increase is 5% with.

The strong growth in Rome, Milan and secondary cities.

In Benelux, growth is 4% compared to.

2024 with Dutch secondary cities and conference center hotels growing at a higher rate.

Compared to Brussels and Amsterdam.

Benelux is up 1% compared to.

2024 as the good evolution in Austria, Hungary, and Czech Republic offset the business loss from UEFA Euro 2024 in German cities.

Lastly, in Latin America, with constant exchange rates, like-for-like revenue grew +9%.

While with real exchange rate like-for-like revenues in the region fell 10% compared to half 1 2024, being Argentina the country with the highest currency effect.

Moving to the full C and L.

On page 7, revenue growth coupled with cost discipline efforts allowed to report a.

Gross operating profit of €432 million.

In the first half of the year.

Representing an increase of $25 million.

6% versus 2023 with a 40% conversion of growth-through ratio. Reported lease payments and property taxes grew by €6 million or 6%.

Around one third of this growth had.

Comes from the comparable perimeter, mainly higher.

Variable rents in Southern Europe being the rest of perimeter changes due to new.

Entries and reforms executed last year. Reported EBITDA improved by €19 million or 6% in H1 reaching €317 million.

Below EBITDA, net interest expense decreased.

€9 million explained by the positive.

Exchange resolved currency impact Brazil versus U.S. dollar or €6.8 million.

A lesser extent by the lower debt.

Interest expense and also higher interest income.

Due €2.2 million. Interest income claimed to Spanish tax agency regarding corporate income tax amounted to €26 million, an increase of €2 million as the higher EDP is partially offset by a positive €1.01 claim.

In Spain, net recurring profit amounted to €86 million.

€1 million in the first half of the year, an improvement of €20 million.

Or 30% compared with $66 million recorded.

In half 1 2024.

Nonreporting items reached €26 million, mainly.

Explained by the disposal of two hotels, one in Portugal and one in Germany in the first quarter. Finally, total net profit reached €112 million.

Euros in the first half, an increase.

Of $41 million or 58% versus 2024. Moving to the cash flow evolution of page 8, the financial position has continued.

To improve net financial debt was.

Reduced to €114 million, a decrease of €130 million explained by asset rotation in the first quarter, organic cash flow generation, and despite the ordinary CAPEX invested in the period amounting to €78 million.

Million, available liquidity as of 30th of June 2025 amounts to €659 million, being €344.

Million in cash and €325 million in available trade lines. On July 2, the 2026 senior secured notes with a nominal amount of €400 million.

Million were early repaid.

This repayment was made with available cash.

€200 million bank term loan, which.

Is part of the new secure bank financing signed in April. This new financing also includes a €200 million revolving credit facility replacing the existing €242 million facility. Following the repayment of the rated debt, the grade ratings of Moody’s and Fitch have been withdrawn. After covering the results of the first six months of the year, the team will be very happy to answer any question you may have.

Conference Operator: Thank you, ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you’re using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, you may press star followed by the number two. Once again, if you would like to ask a question, please press star one on your telephone keypad. One moment please for your first question. Once again, if you would like to ask a question, please press star one on your telephone keypad. We currently have no questions at this time. I would like to turn it back to Javier Vega-Penichet for closing remarks.

Javier Vega-Penichet, Investor Relations, Minor Hotels Europe & Americas: Okay, thanks a lot for attending the call. If you have any further question, please contact us directly in the Investor Relations department. Have a good summer ahead and whatever you just please. Thank you.

Conference Operator: Thank you, presenters and ladies and gentlemen. This concludes today’s conference call. Thank you all for joining me. You may now disconnect.

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