Scandic Reports Q4 and Full Year 2021 Results
Fourth quarter in summary
- Net sales rose by 175 percent to 3,783 MSEK (1,377).
- Average occupancy was 51.1 percent compared with 55.1 percent during the previous quarter and 23.0 percent the fourth quarter 2020. Occupancy was impacted negatively by restrictions that were reintroduced at the end of the quarter.
- Average revenue per available room (RevPAR) was 510 SEK (193).
- Adjusted EBITDA totaled 436 MSEK (-282). The company’s results were impacted positively by state aid of 111 MSEK (226).
- Free cash flow totaled 831 MSEK and net debt decreased during the quarter to 3,053 MSEK.
- Excluding IFRS 16, earnings per share totaled 0.65 SEK (-2.42).
- Scandic signed a lease agreement with Skanska for a new 210-room climate-neutral hotel in Sundsvall that is expected to open in 2024.
Summary of the year
- Net sales rose by 35 percent to 10,086 MSEK (7,470).
- Adjusted EBITDA totaled 6 MSEK (-1,503).
- Received state aid amounted to 693 MSEK (726).
- Average occupancy in 2021 was 38.0 percent (28.7) while RevPAR was 364 SEK (271).
- Excluding IFRS 16, earnings per share amounted to -5.75 SEK (-38.62).
- Free cash flow was 185 MSEK in 2021 despite a very weak start to the year.
- In March, Scandic carried out an offering of convertibles, raising approximately 1,609 MSEK in gross proceeds.
CEO’s comments in summary
We are pleased to report that our earnings continued to improve in Q4, despite a weak end to the quarter. The significant strengthening of demand that started during the summer continued into October and November; however, the rapid spread of the Omicron variant led to new restrictions during December, which resulted in lower occupancy during the final weeks of 2021.
Despite a weak start to the year, we believe that the hotel market will recover rapidly now that virtually all restrictions imposed at the end of the year have been lifted. Last summer’s development clearly demonstrated that underlying demand is strong and that when the market turns, it goes quickly.
Bookings for meetings in the second quarter are strong and this summer, we expect more activity related to events than last year, which is expected to drive demand for hotels.
Cash flow, which has been one of our top priorities, remained robust during the quarter. In fact, in only six months, we managed to reduce net debt by just over 1,300 MSEK. This will give us greater flexibility to manage the temporary weak start to the year combined with investments in new hotels that will open in 2022.
We recently announced that we signed an agreement for an exciting new hotel in Sundsvall that we plan to open in 2024. We also aim to fortify our pipeline that, for obvious reasons, has had few new additions due to the Covid-19 pandemic. Additionally, we will renegotiate about 15 percent of our leases that will expire in 2022/23.
I would like to extend a big thank you to all of our team members who, during a year of extreme volatility, have continued to provide stellar service to our guests.
Scandic launched a number of commercial initiatives during the year. We are continuing to maintain a high focus on further developing our offering to meet the structural growth in leisure travel and to cater to new meeting behavior patterns among our corporate customers. We attach great importance to further strengthening the resilience of our business model to ensure higher and more stable earnings over time.
With a well-invested hotel portfolio and high efficiency, Scandic is well equipped for an exciting 2022.
Jens Mathiesen
President & CEO
Scandic is the largest hotel company in the Nordic countries with more than 280 hotels, in operation and under development, in more than 130 destinations.