Sunborn Finance Oyj: Quarterly Report, Q3 2018
Sunborn Finance Oyj
STOCK EXCHANGE REPORT
30 November 2018
This is a summary of the quarterly report Q3 2018. The complete report is attached to this release and is also available at www.sunborn.com/press/
| Key Figures Issuer Sunborn Finance Oy | |||
| EUR thousand | 1 Jul - 30 Sep 2018 | 1 Jan - 30 Sep 2018 | |
| Rental income | 834 | 2 503 | |
| EBITDA | 544 | 2 123 | |
| Spa Hotels | 64 914 | ||
| Total Equity | 5 973 | ||
| Bond | 50 000 | ||
| Key Figures Operator Sunborn Saga Oy | |||||
| EUR thousand | 1 Jul - 30 Sep 2018 | 1 Jul - 31 Sep 2017 | 1 Jan - 31 Sep 2018 | 1 Jan - 31 Sep 2017 | |
| Turnover | 8 018 | 8 454 | 19 945 | 19 402 | |
| Turnover of divested business | 882 | ||||
| EBITDA before rent | 1 471 | 1 979 | 2 566 | 2 658 | |
Chief Executive Director, Pekka Niemi
Sunborn Finance Oy results for Q3 were at expected levels reaching our budgeted income and cost targets. The hotels have been undergoing major renovations during 2017 and 2018, which will continue to positively impact ADR, occupancy and ratings of the hotels. Improvement works in the properties are continuing throughout 2018 and 2019.
General
Sunborn Finance Oy owns Naantali Spa hotel located in Naantali by the Baltic Sea and Ruissalo Spa Hotel located in Turku by the scenic archipelago. Both properties have been leased to hotel operator Sunborn Saga Oy. The hotel operations of the spa hotels are run by management company Sunborn Saga Oy under a lease contract. Naantali Spa Resort has 214 rooms and 40 ancillary time share apartments and Ruissalo Spa Hotel 171 rooms. Both hotels also offer various ancillary facilities and services, such as conference and ball room facilities, spa facilities with treatment rooms and a pool complex with saunas, fully equipped fitness center, rehabilitation facilities, restaurants, bars, cafes and lounges.
Sunborn Finance was established 1 November, 2017 the company’s operations consist of acting as a lessor of the spa hotels and also providing property and IT related facility services. Sunborn Finance has four employees.
The company prepares its accounts and quarterly reporting according to Finnish GAAP until the Bond has been listed on NASDAQ Helsinki. After that the reporting will be prepared in accordance with IFRS and made available according to the rules and regulations of NASDAQ Helsinki.
Sunborn Finance Oy Financial summary 1 January – 30 September 2018
Sunborn Finance receives lease income from the operator. Lease income 1-9 2018 was 2,5 M€. The other services income refers to personnel costs for facility services and was a cost/income neutral line item.
The value of the Spa hotels is at Naantali Spa 54 M€ and at Ruissalo Spa 28,5 M€ (1/3 in Sunborn Finance assets) according the valuation reports.
Key Figures of the operator Sunborn Saga Oy Financial summary 1 January – 30 September 2018
Turnover 1-9 2018 was increased by 2,8 % to 19,95 M€ (19,40 M€). Turnover in 2017 included 0,88 M€ sales related to divested business, Pinella Restaurant in Turku and Saga Trade.
Exceptionally warm weather in July and August adversely affected the spa and hotel business in Finland in which sales are typically positively correlated with adverse weather and vice versa. Domestic customers preferred outdoor activities and spent time in their summer houses instead of spending time in the hotels and restaurants.
The increase of the corporate segment in August and September 2017 was high because of a local refinery project contributing corporate room nights. This year the demand has normalized in corporate segment.
In Naantali Spa, during July and August we had our full room capacity in use. In September the room capacity was decreased by 50 rooms for renovations, lowering September RevPar due unavailability of rooms on peak days.
Although Ruissalo leisure segment decreased during July and August, the rehabilitation segment in September increased by +10 % YoY.
In Q3 2018 vs Q3 2017 ADR increased in Naantali by +0,4 % and decreased in Ruissalo -4,4 %.
In Q3 2018 vs Q3 2017 RevPar decreased in Naantali by -9,5 % and in Ruissalo -15,4 %.
Operating costs are in line with previous year and room renovations in Naantali are expected to be completed prior to yearend.
Guest satisfaction continues to be good in Naantali reflected by Booking.com rating of 8.0/10, Hotels.com rating of 8.2/10, Expedia.com 4.1/5 and in Ruissalo by Booking.com rating of 7.8/10, Hotels.com rating of 7.6/10, Expedia.com 3.7/5.
Business environment
No notable changes in the business environment.
Issuer is a SPV with no other purpose than owning the Naantali and Ruissalo spa hotel properties. The hotels are leased out to Sunborn Saga Oy through a lease agreement. Sunborn Saga Oy pays Sunborn Finance Oy a fixed sum of 278 152€ per month in lease.
Estimated future development
The company estimates that its financial performance and debt service capacity will remain stable.
Short-term risks and uncertainties
The Company´s financial risks related to business are market risk (including interest rate risk), credit risk, liquidity risk and refinancing risk.
Floating interest rate risk has not been hedged.
Financial risk management carried out by the management of the Company aims to protect the Company against unfavorable developments in the financial markets and ensure the performance. The management review financial risks on regular basis to manage financial risk position and decide on necessary actions.
DISTRIBUTION:
Nasdaq Helsinki Ltd
www.sunborn.com/press/
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