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NH HOTELES: 1Q’20 RESULTS AND CHANGE OF T.P. TO UNDER REVISION (ANÁLISIS BANCO SABADELL)

1Q'20 vs. 1Q'19 Results:
Sales: € 279.4 M (-20.8% vs. -21.5% BS(e) and -22.7% consensus);
EBITDA: € 30.9 M (-63.0% vs. -62.8% BS(e) and -64.7% consensus);
Net Profit: € -57.2 M (€ -14.7 M in 1Q'19 vs. € -68.0 M BS(e) and € -65.3 M consensus);

The results were in line on the operating level, with little news. The company was unable to offset the drop in revenues stemming from the Covid-19 crisis (-21%) through cuts to recurring operating costs, which fell -8.6%, leading to a -63% drop in EBITDA.
The company states that 95% of its hotels are closed, although in May it has begun to accept bookings for some of them. In any event, in view of the lack of visibility no specific guidance has been given, although the company does mention that it has reduced Capex forecast for this year by € -80 M (vs. € 180 M forecast) and that it has signed agreements to reduce rents (no details given) and continues to negotiate with more lessors in this regard.
As for the liquidity position, after signing the € 225 M syndicated loan in May, NHH has € 675 M with debt maturities totaling € 22 M in 2020 and € 257 M in 2021, and thus the situation appears to be comfortable. NFD (ex. leases) has risen to € 255 M at the end of March (vs. € 179 M as of YE2019) and to € 323 M as of the end of April. This means that in April the company would have burned through €~70 M of cash.
In short, little news in these results, although the company confirms a favourable liquidity level that gives it leeway for the coming months. Furthermore, as we have mentioned on several occasions, it has real estate assets (€~2 Bn; 160% of market cap) that it could use to obtain more liquidity in the short term if needed, which will help if the current situation drags out. We will cut estimates significantly (more than -30% in EBITA for 2020-22) and we place our T.P. Under Revision. BUY.