Aqua Sol: Indicative results on 2006
23/2/2007 10:04
The Board of Directors of AQUA SOL HOTELS PUBLIC COMPANY LTD announces that in its meeting on 22/02/2007 approved the indicative consolidated results of the Group for the year ended 31st December 2006 and the explanatory statement as attached.
The indicative consolidated results and the explanatory statement shall not be sent to the shareholders of the Company, but shall be published on Monday 26/02/2007 in all daily newspapers. Copies of the indicative consolidated results and of the explanatory statement are available at the offices of the Company at Nissi Avenue 26, 5343 Ayia Napa.
Explanatory statement
1. The indicative un-audited consolidated results have been prepared based on the same accounting principles used for the preparation of the annual financial statements of the Group.
2. The translation of the amounts from Cyprus Pounds (C£) to Euro (€) was done using the closing exchange rates published by the Central Bank of Cyprus as at 31 December 2006 (i.e. C£1 = €1,7295) both for the 2006 results and for the comparative figures.
3. Group’s turnover decreased to C£26.305.715 (€45.495.735) in 2006 as compared to C£30.413.448 (€52.600.058) in 2005 recording a reduction of 13,5%. The decrease was mainly due to reducing demand for commitment contracts, most of which have been replaced by allotment contracts, as a result of the negative conditions affecting the hotel industry, as well as to the decrease in the number of the units operated by the Group.
4. Operating profit for 2006 amounts to C£661.402 (€1.143.896) as compared to an operating profit of C£172.760 (€298.789) in 2005. This deviation was mainly caused by the fluctuation of certain operating expenses and other income as explained below as well as by the decrease in Group’s turnover as explained in paragraph 3 above.
Other income decreased to C£193.915 (€335.376) in 2006 as compared to C£370.284 (€640.406) in 2005 recording a decrease of 47,6%. This reduction was mainly due to a non-recurring profit from land development recognised in 2005.
Other gains increased to C£945.178 (€1.634.685) in 2006 as compared to C£891.505 (€1.541.858) in 2005, recording an increase of 6,0%, mainly due to an increase in interest income.
The major fluctuations in operating expenses were as follows:
• Staff cost decreased to C£9.937.466 (€17.186.848) in 2006 as compared to C£10.974.457 (€18.980.324) in 2005 recording a decrease of 9,4%, mainly due to the decrease in turnover and to the decrease in the number of the units operated by the Group.
• Rent expense increased to C£4.267.172 (€7.380.074) in 2006 as compared to C£3.970.432 (€6.866.862) in 2005, recording an increase of 7,5%. This fluctuation was mainly the result of arrangements for early termination of lease contracts and increases of rentals.
• Depreciation increased to C£2.188.578 (€3.785.146) in 2006 as compared to C£2.130.862 (€3.685.326) in 2005, recording an increase of 2,7%.
• Goodwill impairment has been reduced to C£NIL in 2006 as compared to C£2.515.993 (€4.351.409) in 2005. The debit amount in 2005 resulted from the impairment of goodwill arising from the acquisition of subsidiaries in previous years and is non-recurring.
• The remaining operating expenses have decreased to C£10.390.190 (€17.969.832) in 2006 as compared to C£11.910.733 (€20.599.612) in 2005, recording a decrease of 12,8%. This decrease was mainly driven by the decrease in turnover and by the decrease in the number of the units operated by the Group.
5. Taxation decreased to C£328.320 (€567.829) in 2006 as compared to C£840.093 (€1.452.941) in 2005 or by a percentage of 60,9%, mainly due to the deferred tax asset write-off relating to the Greek subsidiaries in 2005 which is a non-recurring amount.
6. The indicative consolidated results have not been audited from the external auditors.
Prospects
The prospects of the Group for the year 2007 depend largely on the number and profile of tourist arrivals. Although it’s difficult to make estimates for the year 2007, the management is adopting policies to contain costs in the light of anticipated income. The Group will continue to take measures in order to maximise the shareholders’ long-term return including the retention of its profitable units and the abandonment of the loss making units. In this context, the Group proceeded in 2006 to the exercise of the option for the purchase of the tourist village Panthea in Ayia Napa and to the signing of an agreement for the future acquisition of Nike Hotels Ltd, owner of the tourist village Callisto in Ayia Napa. In addition, the Group is planning in 2007 to exercise an option for the purchase of the tourist villages Eleni and Akteon in Paphos.
Other Information
The indicative consolidated results of the Group shall not be sent to the shareholders of the Company, but shall be published to all daily newspapers on Monday 26/02/2007.
Copies of the indicative consolidated results are available at the offices of the Company at Nissi Avenue 26, 5343 Ayia Napa, Telephone No. 23722964.
The indicative consolidated results and the explanatory statement shall not be sent to the shareholders of the Company, but shall be published on Monday 26/02/2007 in all daily newspapers. Copies of the indicative consolidated results and of the explanatory statement are available at the offices of the Company at Nissi Avenue 26, 5343 Ayia Napa.
Explanatory statement
1. The indicative un-audited consolidated results have been prepared based on the same accounting principles used for the preparation of the annual financial statements of the Group.
2. The translation of the amounts from Cyprus Pounds (C£) to Euro (€) was done using the closing exchange rates published by the Central Bank of Cyprus as at 31 December 2006 (i.e. C£1 = €1,7295) both for the 2006 results and for the comparative figures.
3. Group’s turnover decreased to C£26.305.715 (€45.495.735) in 2006 as compared to C£30.413.448 (€52.600.058) in 2005 recording a reduction of 13,5%. The decrease was mainly due to reducing demand for commitment contracts, most of which have been replaced by allotment contracts, as a result of the negative conditions affecting the hotel industry, as well as to the decrease in the number of the units operated by the Group.
4. Operating profit for 2006 amounts to C£661.402 (€1.143.896) as compared to an operating profit of C£172.760 (€298.789) in 2005. This deviation was mainly caused by the fluctuation of certain operating expenses and other income as explained below as well as by the decrease in Group’s turnover as explained in paragraph 3 above.
Other income decreased to C£193.915 (€335.376) in 2006 as compared to C£370.284 (€640.406) in 2005 recording a decrease of 47,6%. This reduction was mainly due to a non-recurring profit from land development recognised in 2005.
Other gains increased to C£945.178 (€1.634.685) in 2006 as compared to C£891.505 (€1.541.858) in 2005, recording an increase of 6,0%, mainly due to an increase in interest income.
The major fluctuations in operating expenses were as follows:
• Staff cost decreased to C£9.937.466 (€17.186.848) in 2006 as compared to C£10.974.457 (€18.980.324) in 2005 recording a decrease of 9,4%, mainly due to the decrease in turnover and to the decrease in the number of the units operated by the Group.
• Rent expense increased to C£4.267.172 (€7.380.074) in 2006 as compared to C£3.970.432 (€6.866.862) in 2005, recording an increase of 7,5%. This fluctuation was mainly the result of arrangements for early termination of lease contracts and increases of rentals.
• Depreciation increased to C£2.188.578 (€3.785.146) in 2006 as compared to C£2.130.862 (€3.685.326) in 2005, recording an increase of 2,7%.
• Goodwill impairment has been reduced to C£NIL in 2006 as compared to C£2.515.993 (€4.351.409) in 2005. The debit amount in 2005 resulted from the impairment of goodwill arising from the acquisition of subsidiaries in previous years and is non-recurring.
• The remaining operating expenses have decreased to C£10.390.190 (€17.969.832) in 2006 as compared to C£11.910.733 (€20.599.612) in 2005, recording a decrease of 12,8%. This decrease was mainly driven by the decrease in turnover and by the decrease in the number of the units operated by the Group.
5. Taxation decreased to C£328.320 (€567.829) in 2006 as compared to C£840.093 (€1.452.941) in 2005 or by a percentage of 60,9%, mainly due to the deferred tax asset write-off relating to the Greek subsidiaries in 2005 which is a non-recurring amount.
6. The indicative consolidated results have not been audited from the external auditors.
Prospects
The prospects of the Group for the year 2007 depend largely on the number and profile of tourist arrivals. Although it’s difficult to make estimates for the year 2007, the management is adopting policies to contain costs in the light of anticipated income. The Group will continue to take measures in order to maximise the shareholders’ long-term return including the retention of its profitable units and the abandonment of the loss making units. In this context, the Group proceeded in 2006 to the exercise of the option for the purchase of the tourist village Panthea in Ayia Napa and to the signing of an agreement for the future acquisition of Nike Hotels Ltd, owner of the tourist village Callisto in Ayia Napa. In addition, the Group is planning in 2007 to exercise an option for the purchase of the tourist villages Eleni and Akteon in Paphos.
Other Information
The indicative consolidated results of the Group shall not be sent to the shareholders of the Company, but shall be published to all daily newspapers on Monday 26/02/2007.
Copies of the indicative consolidated results are available at the offices of the Company at Nissi Avenue 26, 5343 Ayia Napa, Telephone No. 23722964.
