Homeinns Q2 Net Income Decreases; Lowers Full Year Revenue Guidance

(RTTNews) - Homeinns Hotel Group (HMIN) reported second quarter net income attributable to ordinary shareholders of RMB 72.1 million compared to RMB 108.2 million for the second quarter of 2014. Earnings per share was RMB 0.75 compared to RMB 1.13. Adjusted net income attributable to ordinary shareholders was RMB 105.0 million for the second quarter of 2015. Adjusted earnings per share was RMB 1.07, for the quarter.

Total revenues decreased 1.8% year over year to RMB 1.67 billion. For the second quarter of 2015, occupancy rate decreased by 3.4 percentage points while Average Daily Rate, or ADR, decreased by 0.6%, resulting in a year-over-year decrease of 4.2% in RevPAR. The company said the decrease in RevPAR was mainly due to continued difficult market conditions in the second quarter of 2015.

David Sun, CEO, said: "During the second quarter, we continued to face challenges associated with sustained difficult market conditions. Revenue growth and RevPAR remained under pressure given the surrounding economic climate. This, coupled with higher pre-opening costs, impacted our overall financial performance. As we move into the second half of 2015, we expect the external conditions to remain quite challenging, and we are not counting on a market rebound in the remainder of the year."

The company now expects total revenues for 2015 to be in the range of RMB 6.55 billion to RMB 6.65 billion, below the initial guidance provided at the beginning of the year. Homeinns Hotel Group said it remains committed to target of opening no fewer than 400 new hotels in the course of 2015, with approximately 10% as leased-and-operated hotels and 90% as franchised-and-managed hotels.

Homeinns expects its total revenues in the third quarter of 2015 to be in the range of RMB 1.83 billion to RMB 1.86 billion.