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Accor profit doubles on H1 asset sales

(PARIS) Accor SA, the world’s second-largest hotel company, said first-half profit more than doubled on the sale of properties and higher revenue in Europe at the Sofitel luxury chain.

The Paris-based owner of Novotel and Ibis hotels said net income climbed to 596 million euros (S$1.2billion), or 2.66 euros a share, from 241 million euros, or 1.06 euros, a year earlier. That beat the 237 million euro median estimate from eight analysts in a Bloomberg survey.

‘The net profit included a number of non-recurring items we didn’t expect to be reported this time,’ said Jean-Marie L’Home, an analyst at Paris-based Aurel-Leven, who rates Accor stock a ‘buy.’ He had expected profit of 275 million euros.

Accor sold real estate in the UK and Germany and the Go Voyages travel business to focus on running hotels and expanding a service-voucher unit after Gilles Pelisson became chief executive officer in January last year.

In the first six months this year, Accor agreed to sell two US Sofitel outlets for US$255 million and 91 German and Dutch hotels for 863 million euros. The company also sold 30 UK properties for 711 million euros and Red Roof Inn for US$1.32 billion and disposed of Go Voyages for 281 million euros.

Accor continues to benefit from increased tourism in Paris, where it operates 155 properties including the 134-room Sofitel Arc de Triomphe. The number of visitors to the city will rise by 2 per cent to 15.6 million in 2007, the Paris Tourism Office predicted this week.

Accor plans to spend up to 25 million euros in the second half on promoting its upscale hotels and introducing a new chain of economy hotels in Europe, Mr Pelisson said. The company will invest on boosting services at Sofitel and reviving the luxury chain Pullman which caters to business travellers.

‘We expect to open about 300 Pullman hotels throughout the world by 2015,’ Mr Pelisson said.

Accor’s service unit, which issues vouchers for restaurants or child care that companies can award to their employees, had a 2.4-point increase in profit margin from operations to 41.9 per cent.

 

Source: Bloomberg (Business Times 30 Aug 07)

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