Homeinns Hotel Group Reports Fourth Quarter and Full Year 2015 Financial Results

SHANGHAI, March 16, 2016 /PRNewswire/ -- Homeinns Hotel Group (NASDAQ: HMIN) ("Homeinns" or "the Company"), a leading economy hotel chain in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2015. 

Fourth Quarter and Full Year 2015 Highlights

• Total revenues increased 2.6% year over year to RMB 1,677.4 million (US$258.9 million) for the fourth quarter of 2015. For the full year 2015, total revenues decreased 0.2% year over year to RMB 6,671.1 million (US$1,029.8 million).
• Net loss attributable to ordinary shareholders was RMB 13.1 million (US$2.0 million) for the fourth quarter of 2015, compared with net income attributable to ordinary shareholders of RMB 84.6 million for the fourth quarter of 2014. For the full year 2015, net income attributable to ordinary shareholders was RMB 167.0 million (US$25.8 million), compared with net income attributable to ordinary shareholders of RMB 513.1 million for the full year 2014.
• Adjusted net income attributable to ordinary shareholders (non-GAAP) decreased 44.6% year over year to RMB 61.5 million (US$9.5 million) for the fourth quarter of 2015. For the full year 2015, adjusted net income attributable to ordinary shareholders (non-GAAP) decreased 30.2% year over year to RMB 373.9 million (US$57.7 million).
• EBITDA (non-GAAP) decreased 28.3% year over year to RMB 239.7 million (US$37.0 million) for the fourth quarter of 2015. For the full year 2015, EBITDA (non-GAAP) decreased 24.7% year over year to RMB 1,168.8 million (US$180.4 million).
• Adjusted EBITDA (non-GAAP) decreased 12.9% year over year to RMB 314.2 million (US$48.5 million) for the fourth quarter of 2015. For the full year 2015, adjusted EBITDA (non-GAAP) decreased 12.7% year over year to RMB 1,375.7 million (US$212.4 million).
• Net operating cash inflow decreased 37.9% year over year to RMB 216.2 million (US$33.4 million) for the fourth quarter of 2015 and decreased 16.2% year over year to RMB 1,127.8 million (US$174.1 million) for the full year 2015.
• As of December 31, 2015, Homeinns operated 2,922 hotels in 355 cities across China, with a net addition of 135 hotels during the fourth quarter and 313 hotels during the full year 2015.

Hotel Development

Operating Metrics

For the fourth quarter of 2015, occupancy rate increased by 3.5 percentage points while ADR decreased by 2.5% compared with the fourth quarter of 2014, resulting in an increase of 1.5% in RevPAR. For the full year 2015, occupancy rate decreased by 0.4 percentage points while ADR decreased by 1.8% compared with the full year 2014, resulting in a decrease of 2.9% in RevPAR.

As of December 31, 2015, a total of 2,257 hotels had been in operation for at least 18 months. During the fourth quarter of 2015, occupancy rate of these hotels increased year over year from 81.3% to 84.0%, and ADR decreased year over year from RMB 161 to RMB 157, resulting in an increase in RevPAR by 0.8% from RMB 131 to RMB 132. For the full year 2015, occupancy rate of these hotels decreased year over year from 85.3% to 84.5%, and ADR decreased year over year from RMB 165 to RMB 161, resulting in a decrease in RevPAR by 3.5% from RMB 141 to RMB 136.

Homeinns Hotel Group had a total of 53.9 million unique non-corporate members under its frequent guests program as of December 31, 2015.

Financial Results for Fourth Quarter and Full Year 2015

For the fourth quarter of 2015, revenues from leased-and-operated hotels increased 0.8% year over year to RMB 1.40 billion (US$216.5 million). The year-over-year increase in revenues from leased-and-operated hotels in the fourth quarter of 2015 was mainly due to an increase in RevPAR. Revenues from franchised-and-managed hotels increased 12.7% year over year to RMB 275.2 million (US$42.5 million) for the fourth quarter of 2015. The year-over-year increase in revenues from franchised-and-managed hotels in the fourth quarter of 2015 was mainly driven by an increase in the number of hotels and hotel rooms in operation.

For the full year 2015, revenues from leased-and-operated hotels decreased 1.9% year over year to RMB 5.63 billion (US$869.3 million). The year-over-year decrease in revenues from leased-and-operated hotels in the full year 2015 was mainly due to a decrease in RevPAR. Revenues from franchised-and-managed hotels increased 10.5% year over year to RMB 1.04 billion (US$160.5 million) for the full year of 2015. The year-over-year increase in revenues from franchised-and-managed hotels was mainly driven by an increase in the number of hotels and hotel rooms in operation, although partially offset by a decrease in RevPAR.

For the fourth quarter of 2015, total operating costs and expenses were RMB 1.55 billion (US$239.6 million), representing 92.5% of total revenues. Total operating costs and expenses excluding any share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the fourth quarter of 2015 were 88.9% of total revenues, compared to 86.2% in the same period a year ago.

For the full year 2015, total operating costs and expenses were RMB 5.92 billion (US$913.4 million), representing 88.7% of total revenues. Total operating costs and expenses excluding any share-based compensation expenses, integration costs and expenses related to going-private activities (non-GAAP) for the full year 2015 were 86.8% of total revenues, compared to 83.1% in the same period a year ago.

• Total leased-and-operated hotel costs were RMB 1.35 billion (US$208.8 million) for the fourth quarter of 2015, representing 96.5% of the leased-and-operated hotel revenues, compared to 93.3% in the same period a year ago. Total leased-and-operated hotel costs excluding any share-based compensation expenses and integration costs (non-GAAP) were 96.2% of the leased-and-operated hotel revenues in the fourth quarter of 2015, compared to 93.1% in the same period a year ago. The year-over-year increase in total leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenues for the fourth quarter of 2015 was mainly due to the higher rental and depreciation cost from our having a higher proportion of midscale hotels and to the higher depreciation cost from economy hotel upgrading.
  
  Total leased-and-operated hotel costs were RMB 5.21 billion (US$804.5 million) for the full year 2015, representing 92.5% of the leased-and-operated hotel revenues, compared to 87.5% in 2014. Total leased-and-operated hotel costs excluding any share-based compensation expenses and integration costs (non-GAAP) were 92.3% of the leased-and-operated hotel revenues in the full year 2015, compared to 87.2% in 2014. The year-over-year increase in total leased-and-operated hotel costs as a percentage of leased-and-operated hotel revenues for the full year 2015 was mainly due to increased rental and depreciation costs and a decrease in RevPAR which resulted in a lower revenue base per hotel while a significant portion of the hotel costs was fixed.
  
  Pre-opening cost was RMB 22.5 million (US$3.5 million) for the fourth quarter of 2015, compared to RMB 18.5 million in the fourth quarter of 2014. For the full year 2015, pre-opening cost was RMB 77.4 million (US$11.9 million), compared to RMB 44.6 million in 2014.
  
• Personnel costs of franchised-and-managed hotels were RMB 35.7 million (US$5.5 million) for the fourth quarter of 2015, representing 13.0% of the franchised-and-managed hotel revenues, compared to 14.0% in the same period a year ago. Franchised-and-managed hotels personnel costs excluding share-based compensation expenses (non-GAAP) were 11.6% of franchised-and-managed hotel revenues in the fourth quarter of 2015, compared to 12.6% in the same period of 2014. The year-over-year decrease in personnel costs of franchised-and-managed hotels as a percentage of franchised-and-managed hotel revenues for the fourth quarter of 2015 was mainly due to the lower year-end bonuses.
  
  Personnel costs of franchised-and-managed hotels were RMB 228.2 million (US$35.2 million) for the full year 2015, representing 21.9% of the franchised-and-managed hotel revenues, compared to 21.4% in 2014. Franchised-and-managed hotels personnel costs excluding share-based compensation expenses (non-GAAP) were 20.7% of franchised-and-managed hotel revenues in the full year 2015, compared to 20.0% in 2014. The year-over-year increase in personnel costs of franchised-and-managed hotels as a percentage of franchised-and-managed hotel revenues for the full year 2015 was mainly due to a lower revenue base per hotel.
  
• Sales and marketing expenses were RMB 41.3 million (US$6.4 million) for the fourth quarter of 2015, representing 2.5% of total revenues, compared to 1.4% in the same period a year ago. Sales and marketing expenses excluding share-based compensation expenses (non-GAAP) were 2.5% of total revenues for the fourth quarter of 2015, compared to 1.4% in the same period of 2014. The year-over-year increase in sales and marketing expenses as a percentage of total revenues for the fourth quarter of 2015 was mainly due to the increased cost related to membership loyalty program.
  
  Sales and marketing expenses were RMB 115.1 million (US$17.8 million) for the full year 2015, representing 1.7% of total revenues, compared to 1.6% in 2014. Sales and marketing expenses excluding share-ba