TMR, the regional leader in mountain resorts operation and provision of services in mountain tourism, today published year-end results for the financial year 2012/13 – period from 1 November 2012 to 31 October 2013. TMR recorded a 24% growth in revenues that totaled EUR 54.3 mil., whilst earnings before interest, taxes, depreciation, and amortization (EBITDA) improved by 33% to EUR 18.6 mil. Consolidated net income reached EUR 6.6 mil., down by 35%.
“Our intensive investment strategy proved to lead us in the right direction also in the past year. We were capitalizing on investments in our resorts completed in previous six years, totaling EUR 144 million. Mainly thanks to these investments and enhancement of services, again we observe growth in the number of visitors and greater client spending in our resorts”, Bohuš Hlavatý, CEO and chairman of the Board of Directors of TMR, commented on the results.
The double-digit percentage growth in revenues and EBITDA was impacted by the number of visitors, up by 12%. The mountain resorts Jasná Nízke Tatry and Vysoké Tatry were visited in the past financial year by 9% more visitors – 1.6 mil., and Aquapark Tatralandia reported a 20% growth with 633.4 thousand visitors. The increases were also impacted by higher average revenue per visitor on and off the slope (+25%) and in sports services and stores under the Tatry Motion brand (+15%). The hotels of TMR’s portfolio improved the average occupancy from 48% to 51%, and the average daily rate per room (ADR) increased by 22% to EUR 55.21.
The decrease in net income was impacted mainly by greater depreciation, a two-times higher income tax, lower income from financial instruments, and a one-off negative goodwill in the prior year 2011/12 of EUR 3.2 mil.
Detailed results of main segments:
Mountains and Leisure
Total revenues of the main segment achieved a 23% growth to EUR 39.2 mil. They make up 72% of total operating revenues. EBITDA increased by 38% to EUR 15.0 mil. Operating profitability measured by EBITDA margin improved to 38%. The positive results of the main segment were caused by an improvement in observed key performance indicators. Total visit rate improved by 12% to 2.2 mil., and at the same time average revenue per visitor grew in each subsegment.
In the subsegment of Mountain Resorts revenues increased by 19% to EUR 22.1 mil. with the strongest second quarter (February – April). Mountain Resorts’ EBITDA improved by 38.5% to EUR 8.8 mil. EUR. The increase in the visit rate of 9% was impacted by completed investments of prior years, especially by the project of interconnecting the north and south side of Chopok Mountain in the Jasná resort with three state-of-the-art cableways, which were launched at the beginning of the winter season 2012/13.
Revenues from sale of entries into Aquapark Tatralandia make up 14% of total revenues and reached EUR 7.7 mil., an increase of 9%. The past year 2012/13 was the second year that Aquapark Tatralandia was under operation of TMR all year round. Besides the growing number of visitors (+20%), new attractions such as Gold Splash, Superfly, and especially Tropical Paradise, the second phase of which was launched in the winter 2012/13, contributed to Aquapark’s results. Aquapark’s EBITDA improved by 15% to EUR 3.6 mil.
The subsegment’s revenues are generated in the Company’s dining facilities and après-ski bars in the resorts Jasná Nízke Tatry, Vysoké Tatry and Tatralandia. They make up 12.5% of total revenues comparing to 9% last year. This share increase evidences the lasting trend of increased clients’ demand for ancillary services in the resorts, and thus, TMR sees further potential in this subsegment. The subsegment’s revenues reached EUR 6.8 mil, up by 58%, the steepest growth within the Company. EBITDA increased by record 95% to EUR 1.9 mil.
Sports Services & Stores
Revenues generated in sports stores, ski schools, rentals, and equipment service in the mountain resorts under the Tatry Motion brand follow an upward trend, as well. The subsegment’s revenues increased by 40% to EUR 2.7 mil. EBITDA recorded a growth of 73% to EUR 576 thousand.
The second largest segment of TMR is Hotels with a 27% share on total revenues. Hotels completed the fiscal year with revenues of EUR 14.9 mil. and an 11% growth. The indicator of operating profit – EBITDA – improved by 7% to EUR 3.4 mil. The growth in ADR of 22% and in average occupancy of 2.3 percentage points can be explained by growth investments in the hotels, and by the fact that the total number of rooms decreased as Hotel Slovakia was leased out to third party during the year.
The book value of total assets as of the year end totaled EUR 345.5 mil. (319.9). Non-current assets rose to EUR 288.9 mil. due to the completion of capital investments that include new cableways Funitel, Twinliner and a 15-person gondola in the Jasná resort, the second phase of the project Tropical Paradise in Aquapark Tatralandia, dining facilities in both mountain resorts, renovated sections of Wellness Hotel Grand, and due to the acquisition of a 100% share in Grandhotel Starý Smokovec. The book value of shareholders’ equity decreased to EUR 101.5 mil. (276.4) as a result of a decrease in share capital by EUR 174.4 mil. to EUR 47.0 mil. As a result of the share capital decrease and draw-down of a new bank loan with the total credit line of EUR 30 mil., the Company’s total level of debt increased to EUR 213.1 mil. (16.2).
Based on the finalization of the first phase of the investment cycle in the past year, management expects continuing positive effects from capital investments of prior periods on the following financial year and periods to come, in the total value of EUR 190 mil. In the next financial year, as well as in the following periods management expects further growth in number of visitors, higher visitor spending in the resorts, and rising occupancy in the hotels, especially during off-season. Following the lasting trend of demand for ancillary services, management expects growth in the subsegments of Dining and Sports Services & Stores similar to last year.
As per further activities in the region of Central and Eastern Europe, management will continue to analyze acquisition targets on the Polish market in mountain tourism and explore other opportunities on the Czech market, as well. The bond issue of EUR 180 mil. will bring increased interest expenses in the following periods and thus will have a major impact on net income and consequently on TMR’s ability to pay dividends. Therefore, for 2012/13 the TMR Board of Directors will not propose a dividend pay-out, but will propose to retain earnings in the Company as a cushion for future periods.
Since 28 February 2014 Annual Report of TMR can be accessed at www.tmr.sk.
Tatry mountain resorts, a.s. is the top player operator in tourism in Central and Eastern Europe, which itself or via subsidiaries owns and operates attractive mountain resorts and hotels in the area of the Low and High Tatras. The assets in the Low Tatras include the resort Jasná Nízke Tatry and the following hotels: Wellness hotel Grand Jasná, Tri Studničky Hotel and Chalets Záhradky De Luxe. In the High Tatras, TMR owns and operates resorts Tatranská Lomnica, Starý Smokovec and the following hotels: Grandhotel Praha Tatranská Lomnica and Grandhotel Starý Smokovec, and hotel FIS Štrbské Pleso. TMR also co‐operates the ski area Štrbské Pleso and since the winter season 2012/2013 it has been leasing the mountain resort Špindlerův Mlýn in the Czech Republic in cooperation with SMMR, a.s. TMR owns Tatralandia, the largest Slovak aquapark with all-year operation, which offers a lot of water activities, the Fun Park, or relaxation in a special tropical hall with sea water. It also offers accommodation in bungalows and suites of the Holiday Village Tatralandia. TMR owns and leases out Hotel Liptov and Hotel Ski&Fun Záhradky and Bungalows, Kosodrevina Lodge, and Hotel Slovakia. Almost 190 million Euros have been invested by the end of 2013 in the above-mentioned resorts. These investments help to increase the standard and visit rate in the Tatras. Since 2012 the TMR shares have been traded on three European stock exchanges – in Bratislava, Prague and Warsaw.