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Orient-Express Hotels Ltd. : Orient-Express Hotels Reports Third Quarter 2011 Results

11/02/2011 | 05:35pm US/Eastern
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HAMILTON, Bermuda, November 2, 2011 /PRNewswire via COMTEX/ --

Third Quarter Earnings Summary

  • Third quarter total revenue, excluding Real Estate, up 17% to $183.2 million
  • Revenue from Owned Hotels up 16% to $150.0 million
  • Same store RevPAR up 19% in US dollars, up 14% in local currency
  • Adjusted EBITDA before Real Estate up 29% to $46.7 million
  • Adjusted net earnings from continuing operations increased to $19.9 million from $6.1 million in the third quarter of 2010

KeyEvents

  • Completed the refinancing of an $88 million loan on Copacabana Palace, Rio de Janeiro, and Hotel das Cataratas, Iguassu Falls. The new $115 million loan has a maturity of three years and includes a $15 million capital expenditure facility
  • Completed the financing of a new $45 million loan facility for renovation works at El Encanto, a 92-key historic property in Santa Barbara, California, scheduled to open in late 2012
  • Opened Bar '21', a new bar and lounge at '21' Club, New York
  • Launched eight week digital brand awareness campaign in the US market

Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owners or part-owners and managers of 49 luxury hotel, restaurant, tourist train and river cruise properties operating in 24 countries, today announced its results for the third quarter ended September 30, 2011.

"The Company's growth in operating results in the third quarter reflected continued robust demand for our luxury leisure travel products in most of our markets. We were pleased by the strong performance of our iconic Italian portfolio of properties, most of which are on track to achieve their best ever annual results," said Bob Lovejoy, Chairman and Interim Chief Executive Officer. "Worldwide revenue excluding Real Estate grew by 17% compared to the third quarter of 2010. Adjusted EBITDA before Real Estate grew for the seventh consecutive quarter, increasing by 29% compared to the prior year quarter.

"Looking forward, we see a continuing positive demand picture in our markets. Rooms revenue achieved and on the books for the fourth quarter of 2011 is currently 19% above the same figure at this time last year. Rooms revenue on the books for 2012 is currently 18% ahead of the same time last year.

"In the third quarter the Company also strengthened its financial position by refinancing the last significant piece of debt that was due in 2012. We are also seeing good data from our digital media brand awareness campaign launched in the US during the quarter, with over 25 million individuals having already visited websites advertising the Orient-Express brand."

Business Highlights

Revenue, excluding Real Estate, was $183.2 million in the third quarter of 2011, up $26.8 million or 17% from the third quarter of 2010.

Revenue from Owned Hotels for the third quarter was $150.0 million, up $20.7 million or 16% from the third quarter of 2010. On a same store basis, Owned Hotels RevPAR was up 19% in US dollars and up 14% in local currency.

Trains and Cruises revenue in the third quarter was $28.9 million compared to $23.6 million in the third quarter of 2010, an increase of 22%.

Adjusted EBITDA before Real Estate was $46.7 million for the third quarter, up 29% compared to $36.3 million in the prior year. The principal increase was at the Italian hotels, where EBITDA was up $7.4 million from the same period in the prior year, led by Hotel Cipriani, Venice (up $2.4 million) and the two Sicilian properties (up $3.1 million). Other improvements included Reid's Palace, Madeira (up $1.1 million), La Residencia, Mallorca (up $1.0 million), the Copacabana Palace Hotel (up $0.8 million), and share of earnings from PeruRail (up $1.3 million), offset by The Westcliff, Johannesburg (down $1.2 million) and Mount Nelson Hotel, Cape Town (down $1.4 million).

Adjusted net earnings from continuing operations for the third quarter were $19.9 million ($0.19 per common share), compared with $6.1 million ($0.07 per common share) in the third quarter of 2010. Net losses, after tax effected impairments of $57.8 million ($0.56 per common share), for the third quarter were $50.1 million ($0.49 per common share), compared with a net loss of $22.5 million ($0.25 per common share) in the third quarter of 2010.

Property Portfolio Highlights

In September, the Company launched its first ever Internet-based brand awareness campaign across the US, called "A journey like no other", aimed at building recognition of Orient-Express within its largest customer market. The eight week campaign highlights experiences at selected properties using digital media advertisements placed on a variety of lifestyle and travel websites. These digital advertisements link to a microsite, http://www.orient-express.com/journeylikenoother, where nine short films follow the travel experiences of a cast of fictional characters and real-life staff members.

During the quarter the Company finalized a new $45 million loan facility for the refurbishment works at El Encanto, a 92-key landmark hotel in Santa Barbara that will be one of the premier luxury properties in Southern California when it opens in late 2012.

In September, the Company launched Bar '21', a 10-seat bar and lounge on the ground floor of the '21' Club serving a casual yet refined menu, including a new version of the famed '21' burger. The bar welcomes the guest upon arrival with a warm, informal atmosphere that remains true to the inspiration of the original '21' Club space.

Several of the Company's properties received significant awards in the quarter. Readers of Condé Nast Traveller (UK) voted the Hiram Bingham train, operating between Cuzco and Machu Picchu, Best Specialist Train Operator in its prestigious Reader's Travel Awards 2011. Readers of the US edition of the same magazine placed Keswick Hall, Virginia first in the Best Small US Resort category and The Observatory Hotel, Sydney, Best Hotel in Oceania. Members of Virtuoso, North America's network of leading luxury travel specialists, voted Hotel Cipriani Hotel of the Year at its 2011 Best of the Best Awards.

Regional Performance

Europe:

In the third quarter, revenue from Owned Hotels was $89.0 million, up $16.6 million or 23% from $72.4 million in the third quarter of 2010. Third quarter revenue increased at all locations, but continued to be led by strong demand from the UK and US at the Italian properties. Revenue from Italian properties increased by $11.4 million or 25% compared to the same quarter in 2010. Same store RevPAR in Europe was up 30% from the prior year in US dollars (up 21% in local currency). EBITDA for the quarter was $36.7 million compared to $28.1 million in the third quarter of 2010, which represents an $8.6 million or 31% increase. This improvement arose largely from the Italian hotels where the impact of refurbishments at Hotel Cipriani contributed to EBITDA growth of $2.4 million. Compared with the third quarter of 2010, the Company's two hotels in Sicily achieved year on year EBITDA growth of $3.1 million. During the quarter the region also included a non-recurring management restructuring charge of $1.2 million.

North America:

Revenue from Owned Hotels for the quarter was $24.4 million, up 5% from $23.3 million in the third quarter of 2010, largely due to a strong September performance driving a revenue growth in the quarter of $0.9 million or 7% at Charleston Place, Charleston. Same store RevPAR in the region increased by 8% in both US dollars and local currency. EBITDA was $1.5 million compared to $0.8 million in the third quarter of 2010.

Rest of World:

Southern Africa:

Third quarter revenue was $7.3 million, compared to $10.0 million in the third quarter of 2010. Same store RevPAR was down 26% in both US dollars and local currency. EBITDA was $0.1 million, compared to $2.7 million in the third quarter of 2010. The decrease was largely the result of the absence of the football World Cup played in South Africa in 2010, although EBITDA has also been negatively impacted by new competition in both Cape Town and Johannesburg, resulting in significant pressure on both rates and margins.

South America:

Revenue increased by 22% to $17.7 million in the third quarter of 2011, from $14.5 million in the third quarter of 2010. Year on year revenue increased at Hotel das Cataratas, Iguassu Falls, by $0.8 million or 32% following the major refurbishment that was completed in November 2010. Year on year revenue increased at Copacabana Palace by $2.2 million or 22%, driven by record occupancy and strong growth in average daily rate with an increase in US guest numbers. Same store RevPAR in the region increased by 15% in both US dollars and local currency. EBITDA was $2.5 million, compared to $1.3 million last year.

Asia Pacific:

Revenue for the third quarter of 2011 was $11.6 million, an increase of $2.4 million or 26% year over year, reflecting strong growth at all properties, most notably at Napasai, Koh Samui where revenue increased by $0.7 million or 74% year on year following the creation of a new lagoon. Same store RevPAR increased by 21% in both US dollars and local currency. EBITDA was $3.0 million compared to $2.2 million in the third quarter of 2010.

Additional Information

Hotel management and part-ownership interests:

EBITDA for the third quarter of 2011 was $1.3 million compared to $1.0 million in the third quarter of 2010. The improvement was largely attributable to the Company's share of results from Peru hotels, as the third quarter of 2010 was negatively impacted by flooding and landslides in the country earlier in that year. The quarterly result also included $0.4 million of costs relating to the Company's initiative to enter the Management Contract business.

Restaurants:

Revenue from '21' Club in the third quarter of 2011 was $2.5 million compared to $2.4 million in the same quarter of 2010. EBITDA was a loss of $1.8 million after a $1.5 million non-recurring charge relating to the settlement of employee litigation, compared to a loss of $0.4 million in the same quarter of 2010.

Trains and Cruises:

Revenue increased by $5.3 million or 22% to $28.9 million in the third quarter of 2011 from $23.6 million in the prior year, reflecting strong increases in all products. EBITDA was $9.0 million compared to $6.9 million in the same quarter of 2010, largely due to an increase in share of results from PeruRail of $1.3 million as the business has now fully recovered from the floods and landslides of 2010.

Central costs:

In the third quarter of 2011, central costs were $10.3 million compared with $7.6 million in the prior year period. The increase was largely due to non-recurring professional fees and management restructuring costs of $2.0 million in the current quarter.

Real Estate:

In the third quarter of 2011, there was an EBITDA loss of $1.6 million from Real Estate activities, primarily related to Porto Cupecoy, Sint Maarten, compared with a loss of $1.9 million in the third quarter of 2010. During the quarter, the Company recognized $3.9 million of revenue from six units transferred to customers. Cumulatively, at the end of the quarter, 113 units or 61% of the total had been sold. In addition to the EBITDA loss, the Company recorded an impairment of $38.6 million at Porto Cupecoy due to changes in future sales and cost estimates in light of recent sales experience and current market conditions.

Depreciation, amortization and impairment:

The depreciation and amortization charge for the third quarter of 2011 was $12.0 million compared with $11.7 million in the third quarter of 2010.

The Company recorded a total pre-tax impairment charge for the quarter of $64.8 million. The total charge included the impairment charge at Porto Cupecoy noted above, as well as impairments of $23.9 million at Keswick Hall and $2.3 million at Casa de Sierra Nevada, San Miguel de Allende.

Interest:

The interest charge for the third quarter of 2011 was $13.0 million, up from $8.0 million in the third quarter of 2010 principally due to swap and loan termination costs of $3.5 million related to loan facilities in Brazil and Italy, coupled with higher interest rates on refinanced debt.

Tax:

The tax benefit for the quarter was $4.8 million compared to a charge of $9.3 million in the same quarter in the prior year. The third quarter 2011 tax benefit included a deferred tax credit of $4.2 million arising from fixed asset timing differences following depreciation of certain local currencies against the US dollar in the quarter, compared with a deferred tax charge of $1.3 million in the same quarter in the prior year. The current year quarter additionally included a deferred tax credit of $7.0 million arising from fixed asset timing differences following the impairment of various fixed assets, compared with $nil in the same quarter in the prior year.

Investment:

The Company invested $14.1 million during the quarter, including $3.2 million for the ongoing restoration of El Encanto, $2.8 million at La Samanna, Saint Martin and $2.3 million at the Copacabana Palace for the planned refurbishment of rooms and public areas, and routine capital expenditure at other properties.

Balance Sheet

At September 30, 2011, the Company had long-term debt (including the current portion and debt of consolidated variable interest entities) of $662.7 million, working capital loans of $0.2 million, and cash balances of $133.0 million (including $14.0 million of restricted cash), giving a total net debt of $529.9 million compared with total net debt of $576.0 million at the end of the second quarter of 2011.

Undrawn amounts available to the Company at September 30, 2011 under short-term lines of credit were $4.6 million, bringing total cash availability (excluding restricted cash) at September 30, 2011, to $123.6 million.

At September 30, 2011, approximately 53% of the Company's debt was at fixed interest rates and 47% was at floating interest rates. The weighted average maturity of the debt was approximately 3.6 years and the weighted average interest rate (including margin and swaps) was approximately 4.3%.

At September 30, 2011, the Company had $68.4 million of debt repayments due within 12 months. These are expected to be met through a combination of operating cash flow, refinancing of the facilities and utilization of available cash.

During the quarter, the Company completed the refinancing of an $88 million loan secured by its two Brazilian properties. The new $115 million loan includes a $15 million capital expenditure facility to assist with the planned refurbishment of the main building of the Copacabana Palace to take place during 2012. The new loan has a term of three years. The prior $88 million loan was due to mature in October 2012, and represented the Company's only significant debt maturity in 2012.

Also in the quarter, the Company signed a new $45 million loan facility for the completion of El Encanto. The loan has a term of three years with two one-year extensions.

As reported in the Company's second quarter 2011 earnings news release, the Company's balance sheet as at December 31, 2010 has been restated to correct an understatement of non-current deferred income tax liabilities. The prior period increase to non-current deferred tax liabilities of $6.0 million (and a corresponding decrease to retained earnings) does not affect the Company's net losses or losses per share for the year ended December 31, 2010.

Reconciliation and Adjustments

                                                              Nine months
                                       Three months ended        ended
   $'000 - except per share amounts       September 30       September 30
                                         2011      2010      2011     2010

   EBITDA                              (24,450)    2,589   13,338   30,909

   Real Estate                           1,572     1,884    4,680    4,663
   EBITDA before Real Estate           (22,878)    4,473   18,018   35,572
   Adjusted items:
   Gain on disposal (1)                     18         -     (502)       -
   Impairment (2)                       64,787    30,511   64,787   30,511
   Legal costs (3)                           -        13        -     (157)
   Grand Hotel Timeo & Villa
   Sant'Andrea (4)                           -        84        -    1,724
   Cipriani litigation (5)                   -         -        -     (788)
   '21' Club settlement (6)              1,546         -    2,546        -
   Peru hotels depreciation
   adjustment (7)                            -     1,240        -    1,240
   Management restructuring (8)          3,191       (11)   4,707    1,111

   Adjusted EBITDA before Real Estate   46,664    36,310   89,556   69,213

   Reported net loss attributable to
   Orient-Express

   Hotels Ltd.                         (49,921)  (22,452) (59,674) (36,280)
   Net loss/(earnings) attributable
   to non-controlling

   interests                               146        23     (148)    (184)
   Reported net loss                   (50,067)  (22,475) (59,526) (36,096)
   Discontinued operations net of tax      741      (749)   1,430   (3,486)
   Net loss from continuing
   operations                          (49,326)  (23,224) (58,096) (39,582)
   Adjusted items net of tax:
   Gain on disposal (1)                     12         -     (326)       -
   Impairment (2)                       57,786    30,511   57,786   30,511
   Legal costs (3)                           -        13        -     (157)
   Grand Hotel Timeo & Villa
   Sant'Andrea (4)                           -        61        -    1,286
   Cipriani litigation (5)                   -         -        -     (788)
   '21' Club settlement (6)              1,005         -    1,655        -
   Peru hotels depreciation
   adjustment (7)                            -       853        -      853
   Management restructuring (8)          3,229        (8)   4,484      925
   Loan financing costs (9)                693         -    1,841        -
   Interest rate swaps (10)              2,965       673    3,481      668
   Foreign exchange (11)                 3,517    (2,793)   2,000   (2,563)

   Adjusted net earnings/(loss) from
   continuing

   operations                           19,881     6,086   12,825   (8,847)

   Reported EPS                          (0.49)    (0.25)   (0.58)   (0.40)
   Reported EPS from continuing
   operations                            (0.48)    (0.26)   (0.57)   (0.44)
   Adjusted EPS from continuing
   operations                             0.19      0.07     0.13    (0.10)
   Number of shares (millions)          102.60     90.84   102.50    89.33

  1. Gain on disposal of New York hotel project.
  2. Impairment charges on Porto Cupecoy and two owned properties.
  3. Legal costs incurred in defending the Company's class B common share structure, net of awards or claims for reimbursement.
  4. Non-recurring costs and purchase transaction costs incurred in relation to Grand Hotel Timeo and Villa Sant'Andrea.
  5. Cash received in excess of costs incurred following settlement of "Cipriani" trademark litigation.
  6. Non-recurring charge for preliminary settlement of employee litigation.
  7. Additional charge to reflect revision of useful economic life of assets at Machu Picchu Sanctuary Lodge.
  8. Restructuring, redundancy and associated legal and other costs.
  9. Amortization of deferred financing costs on repayment of debt.
  10. Charges on swaps that did not qualify for hedge accounting.
  11. Foreign exchange is a non-cash item arising on the translation of certain assets and liabilities denominated in currencies other than the reporting currency of the entity concerned.

Management evaluates the operating performance of the Company's segments on the basis of segment net earnings before interest, foreign exchange, tax (including tax on unconsolidated companies), depreciation and amortization (EBITDA), and believes that EBITDA is a useful measure of operating performance, for example to help determine the ability to incur capital expenditure or service indebtedness, because it is not affected by non-operating factors such as leverage and the historical cost of assets.EBITDA is also a financial performance measure commonly used in the hotel and leisure industry, although the Company's EBITDA may not be comparable in all instances to that disclosed by other companies.EBITDA does not represent net cash provided by operating, investing and financing activities under US generally accepted accounting principles (US GAAP), is not necessarily indicative of cash available to fund all cash flow needs, and should not be considered as an alternative to earnings from operations or net earnings under US GAAP for purposes of evaluating operating performance.

Adjusted EBITDA and adjusted net earnings of the Company are non-GAAP financial measures and do not have any standardized meanings prescribed by US GAAP.They are, therefore, unlikely to be comparable to similar measures presented by other companies, which may be calculated differently, and should not be considered as an alternative to net earnings, cash flow from operating activities or any other measure of performance prescribed by US GAAP.Management considers adjusted EBITDA and adjusted net earnings to be meaningful indicators of operations and uses them as measures to assess operating performance because, when comparing current period performance with prior periods and with budgets, management does so after having adjusted for non-recurring items, foreign exchange (a non-cash item), disposals of assets or investments, and certain other items (some of which may be recurring) which management does not consider indicative of ongoing operations or which could otherwise have a material effect on the comparability of the Company's operations.Adjusted EBITDA and adjusted net earnings are also used by investors, analysts and lenders as measures of financial performance because, as adjusted in the foregoing manner, the measures provide a consistent basis on which the performance of the Company can be assessed.

This news release and related oral presentations by management contain, in addition to historical information, forward-looking statements that involve risks and uncertainties.These include statements regarding earnings outlook, investment plans, debt reduction and debt refinancings, asset sales and similar matters that are not historical facts.These statements are based on management's current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements.Factors that may cause a difference include, but are not limited to, those mentioned in the news release and oral presentations, unknown effects on the travel and leisure markets of terrorist activity and any police or military response, varying customer demand and competitive considerations, failure to realize hotel bookings and reservations and planned property development sales as actual revenue, inability to sustain price increases or to reduce costs, rising fuel costs adversely impacting customer travel and the Company's operating costs, fluctuations in interest rates and currency values, uncertainty of negotiating and completing proposed asset sales, debt refinancings, capital expenditures and acquisitions, inability to reduce funded debt as planned or to agree bank loan agreement waivers or amendments, adequate sources of capital and acceptability of finance terms, possible loss or amendment of planning permits and delays in construction schedules for expansion or development projects, delays in reopening properties closed for repair or refurbishment and possible cost overruns, shifting patterns of tourism and business travel and seasonality of demand, adverse local weather conditions, changing global or regional economic conditions and weakness in financial markets which may adversely affect demand, legislative, regulatory and political developments, and possible new challenges to the Company's corporate governance structure.Further information regarding these and other factors is included in the filings by the Company with the U.S. Securities and Exchange Commission.

Orient-Express Hotels will conduct a conference call on Thursday, November 3, 2011 at 10.00 hrs EDT (14.00 GMT) which is accessible at +1-877-280-2342 (US toll free) or +44(0)20-3427-1918 (Standard International). The conference ID is 6709748. A re-play of the conference call will be available until 7pm (EST) Thursday, November 10, 2011 and can be accessed by calling +1-866-932-5017 (US toll free) or +44(0)20-7111-1244 (Standard International) and entering replay access number 6709748#. A re-play will also be available on the company's website: http://www.orient-expresshotelsltd.com .

ORIENT-EXPRESS HOTELS LTD.

Three Months ended September 30, 2011

SUMMARY OF OPERATING RESULTS

(Unaudited)

                                                  Three months ended
                                                     September 30
   $'000 - except per share amounts                2011        2010
   Revenue and earnings from unconsolidated
   companies
   Owned hotels
   - Europe                                      89,045      72,449
   - North America                               24,391      23,256
   - Rest of World                               36,583      33,607
   Hotel management & part ownership interests    1,727       1,001
   Restaurants                                    2,518       2,412
   Trains & Cruises                              28,933      23,640
   Revenue and earnings from unconsolidated

   companies before Real Estate                 183,197     156,365
   Real Estate                                    3,875      25,022
   Total (1)                                    187,072     181,387

   Analysis of earnings
   Owned hotels
   - Europe                                      36,739      28,141
   - North America                                1,517         805
   - Rest of World                                5,560       6,175
   Hotel management & part ownership interests    1,313       1,001
   Restaurants                                   (1,832)       (377)
   Trains & Cruises                               8,951       6,863
   Central overheads                            (10,321)     (7,624)
   EBITDA before Real Estate and Impairment      41,927      34,984
   Real Estate                                   (1,572)     (1,884)
   EBITDA before Impairment                      40,355      33,100
   Impairment                                   (64,787)    (30,511)
   Loss on disposal                                 (18)          -
   EBITDA                                       (24,450)      2,589
   Depreciation & amortization                  (11,968)    (11,685)
   Interest                                     (12,951)     (8,028)
   Foreign exchange                              (4,768)      3,200
   Loss before tax                              (54,137)    (13,924)
   Tax                                            4,811      (9,300)
   Net loss from continuing operations          (49,326)    (23,224)
   Discontinued operations                         (741)        749
   Net loss                                     (50,067)    (22,475)
   Net loss attributable to non-controlling
   interests                                        146          23
   Net loss attributable to Orient-

   Express Hotels Ltd.                          (49,921)    (22,452)
   Net loss per common share                      (0.49)      (0.25)
   Number of shares - millions                   102.60       90.84

(1)$3,214,000 (2010 - $1,655,000) and revenue of $183,858,000 (2010 - $179,732,000).

ORIENT-EXPRESS HOTELS LTD.

Three Months Ended September 30, 2011

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                                Three months ended
                                   September 30
                                 2011         2010
   Average Daily Rate

   (in US dollars)
   Europe                           830          699
   North America                    289          272
   Rest of World                    344          326
   Worldwide                        515          448

   Rooms Available (000's)
   Europe                            88           89
   North America                     65           66
   Rest of World                    119          114
   Worldwide                        272          269

   Rooms Sold (000's)
   Europe                            64           58
   North America                     43           42
   Rest of World                     61           59
   Worldwide                        168          159

   RevPAR (in US dollars)
   Europe                           598          460
   North America                    189          175
   Rest of World                    176          168
   Worldwide                        316          266

                                                         Change %
   Same Store RevPAR                                           Local
   (in US dollars)                                    Dollar  currency

   Europe                           598          460      30%      21%
   North America                    189          175       8%       8%
   Rest of World                    176          168       5%       3%
   Worldwide                        316          266      19%      14%

ORIENT-EXPRESS HOTELS LTD.

Nine Months ended September 30, 2011

SUMMARY OF OPERATING RESULTS

(Unaudited)

                                                    Nine months ended
                                                      September 30
   $'000 - except per share amounts                2011        2010
   Revenue and earnings from unconsolidated
   companies
   Owned hotels
   - Europe                                      180,409     140,076
   - North America                                84,836      79,810
   - Rest of World                               118,850     104,399
   Hotel management & part ownership interests     4,504       1,875
   Restaurants                                     9,956       9,320
   Trains & Cruises                               61,764      50,554
   Revenue and earnings from unconsolidated

   companies before Real Estate                  460,319     386,034
   Real Estate                                     9,066      56,130
   Total (1)                                     469,385     442,164

   Analysis of earnings
   Owned hotels
   - Europe                                       58,698      37,652
   - North America                                12,513      11,616
   - Rest of World                                22,024      23,572
   Hotel management & part ownership interests     3,623       1,875
   Restaurants                                    (2,093)        259
   Trains & Cruises                               14,237      11,982
   Central overheads                             (26,699)    (20,873)
   EBITDA before Real Estate and Impairment       82,303      66,083
   Real Estate                                    (4,680)     (4,663)
   EBITDA before Impairment                       77,623      61,420
   Impairment                                    (64,787)    (30,511)
   Gain on disposal                                  502           -
   EBITDA                                         13,338      30,909
   Depreciation & amortization                   (34,989)    (34,268)
   Interest                                      (33,576)    (22,138)
   Foreign exchange                               (2,629)      2,982
   Loss before tax                               (57,856)    (22,515)
   Tax                                              (240)    (17,067)
   Net loss from continuing operations           (58,096)    (39,582)
   Discontinued operations                        (1,430)      3,486
   Net loss                                      (59,526)    (36,096)
   Net earnings attributable to non-controlling
   interests                                        (148)       (184)
   Net loss attributable to Orient-Express
   Hotels Ltd.                                   (59,674)    (36,280)
   Net loss per common share                       (0.58)      (0.40)
   Number of shares - millions                    102.50       89.33

(1)$4,647,000 (2010 - $3,523,000) and revenue of $464,738,000 (2010 - $438,641,000).

ORIENT-EXPRESS HOTELS LTD.

Nine Months Ended September 30, 2011

SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                                  Nine months ended
                                    September 30
                                  2011         2010
   Average Daily Rate

   (in US dollars)
   Europe                           773          669
   North America                    331          324
   Rest of World                    341          326
   Worldwide                        462          416

   Rooms Available (000's)
   Europe                           222          216
   North America                    201          201
   Rest of World                    353          343
   Worldwide                        776          760

   Rooms Sold (000's)
   Europe                           132          113
   North America                    134          129
   Rest of World                    196          185
   Worldwide                        462          427

   RevPAR (in US dollars)
   Europe                           460          351
   North America                    221          208
   Rest of World                    190          176
   Worldwide                        275          234

                                                         Change %
   Same Store RevPAR                                           Local
   (in US dollars)                                    Dollar  currency

   Europe                           469          357      31%      23%
   North America                    221          208       6%       6%
   Rest of World                    191          177       8%       4%
   Worldwide                        274          235      17%      12%

ORIENT-EXPRESS HOTELS LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

                                                  September 30 December 31
   $'000                                                  2011       2010
                                                                (Restated)
   Assets

   Cash                                                133,008     158,820
   Accounts receivable                                  45,669      51,405
   Due from unconsolidated companies                    31,831      19,643
   Prepaid expenses                                     25,193      23,663
   Inventories                                          46,757      44,245
   Other assets held for sale                           18,067      32,844
   Real estate assets                                   37,663      68,111
   Total current assets                                338,188     398,731

   Property, plant & equipment, net book value       1,205,343   1,268,837
   Property, plant & equipment, net book value of

   consolidated variable interest entities             186,969     188,502
   Investments                                          59,074      60,428
   Goodwill                                            176,308     177,498
   Other intangible assets                              19,823      20,007
   Other assets                                         19,953      23,711
                                                     2,005,658   2,137,714

   Liabilities and Equity

   Working capital facilities                              175       1,174
   Accounts payable                                     31,414      25,448
   Accrued liabilities                                  82,791      71,554
   Deferred revenue                                     42,728      28,963
   Other liabilities held for sale                       1,808       2,792
   Current portion of long-term debt and capital
   leases                                               66,662     124,805
   Current portion of long-term debt of consolidated
   variable interest entities                            1,766       1,775
   Total current liabilities                           227,344     256,511

   Long-term debt and obligations under capital
   leases                                              505,095     511,336
   Long-term debt of consolidated variable interest

   entities                                             89,208      90,529
   Deferred income taxes                                95,687     106,702
   Deferred income taxes of consolidated variable
   interest entities                                    61,835      61,835
   Other liabilities                                    36,878      43,906
   Total liabilities                                 1,016,047   1,070,819

   Shareholders' equity                                987,547   1,064,973
   Non-controlling interests                             2,064       1,922
   Total equity                                        989,611   1,066,895
                                                     2,005,658   2,137,714

Contact:

Martin O'Grady Vice President, Chief Financial Officer Tel: +44-20-7921-4038 E: martin.ogrady@orient-express.com

Vicky Legg Director, Corporate Communications Tel: +44-20-7921-4067 E: vicky.legg@orient-express.com

SOURCE Orient Express Hotels Ltd

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