H World Group Limited Reports Second Quarter and Interim of 2024 Unaudited Financial Results
H World Group (NASDAQ: HTHT) reported its unaudited financial results for Q2 2024. The company operated 10,286 hotels with 1,001,865 rooms globally as of June 30, 2024.
Hotel turnover increased 15.5% YoY to RMB23.4 billion. Revenue rose 11.2% YoY to RMB6.1 billion, at the high end of the previously announced guidance. The Legacy-Huazhu segment's revenue increased 11.1%, while the Legacy-DH segment's revenue rose 11.6% YoY.
Net income attributable to H World was RMB1.1 billion, up from RMB1.0 billion in Q2 2023. EBITDA (non-GAAP) was RMB1.9 billion, and adjusted EBITDA was RMB2.0 billion.
For Q3 2024, H World expects revenue growth of 2%-5% YoY. The company also revised its full-year 2024 hotel opening guidance to over 2,200 hotels, up from around 1,800. During Q2 2024, H World opened 567 hotels but saw Legacy-Huazhu's blended RevPAR decline by 2% YoY.
H World Group (NASDAQ: HTHT) ha riportato i suoi risultati finanziari non verificati per il secondo trimestre del 2024. L'azienda gestiva 10.286 hotel con 1.001.865 camere a livello globale al 30 giugno 2024.
Il fatturato degli hotel è aumentato del 15,5% rispetto all'anno precedente, raggiungendo i RMB 23,4 miliardi. I ricavi sono aumentati dell'11,2% anno su anno, toccando i RMB 6,1 miliardi, al valore più alto della guida precedentemente annunciata. I ricavi del segmento Legacy-Huazhu sono aumentati dell'11,1%, mentre i ricavi del segmento Legacy-DH sono aumentati dell'11,6% rispetto all'anno precedente.
Il reddito netto attribuibile a H World è stato di RMB 1,1 miliardi, rispetto a RMB 1,0 miliardi nel secondo trimestre del 2023. L'EBITDA (non GAAP) è stato di RMB 1,9 miliardi, e l'EBITDA rettificato è stato di RMB 2,0 miliardi.
Per il terzo trimestre del 2024, H World prevede una crescita dei ricavi del 2%-5% rispetto all'anno precedente. L'azienda ha anche rivisto le sue previsioni per l'apertura di hotel per l'intero anno 2024, portandole a oltre 2.200 hotel, rispetto a circa 1.800. Durante il secondo trimestre del 2024, H World ha aperto 567 hotel ma ha visto il RevPAR blended di Legacy-Huazhu diminuire del 2% rispetto all'anno precedente.
H World Group (NASDAQ: HTHT) informó sus resultados financieros no auditados para el segundo trimestre de 2024. La compañía operaba 10,286 hoteles con 1,001,865 habitaciones a nivel mundial al 30 de junio de 2024.
La facturación hotelera aumentó un 15,5% interanual, alcanzando los RMB 23.4 mil millones. Los ingresos crecieron un 11,2% interanual, llegando a RMB 6.1 mil millones, en el rango más alto de la guía previamente anunciada. Los ingresos del segmento Legacy-Huazhu aumentaron un 11,1%, mientras que los ingresos del segmento Legacy-DH crecieron un 11,6% interanual.
El resultado neto atribuible a H World fue de RMB 1,1 mil millones, frente a RMB 1,0 mil millones en el segundo trimestre de 2023. El EBITDA (no GAAP) fue de RMB 1,9 mil millones, y el EBITDA ajustado fue de RMB 2,0 mil millones.
Para el tercer trimestre de 2024, H World espera un crecimiento de los ingresos del 2%-5% interanual. La empresa también revisó su guía de apertura de hoteles para todo el año 2024 a más de 2,200 hoteles, en comparación con alrededor de 1,800. Durante el segundo trimestre de 2024, H World abrió 567 hoteles, pero el RevPAR combinado de Legacy-Huazhu disminuyó un 2% interanual.
H 월드 그룹 (NASDAQ: HTHT)은 2024년 2분기 감사되지 않은 재무 결과를 보고했습니다. 이 회사는 2024년 6월 30일 기준으로 전 세계적으로 10,286개의 호텔과 1,001,865개의 객실을 운영하고 있습니다.
호텔 수익은 전년 대비 15.5% 증가하여 RMB 234억에 이르렀습니다. 수익은 전년 대비 11.2% 증가한 RMB 61억으로, 이전에 발표한 가이드의 상한선에 도달했습니다. Legacy-Huazhu 세그먼트의 수익은 11.1% 증가했으며, Legacy-DH 세그먼트의 수익은 전년 대비 11.6% 증가했습니다.
H 월드에 귀속된 순소득은 RMB 11억으로, 2023년 2분기에서 RMB 10억에서 증가했습니다. EBITDA(비 GAAP)는 RMB 19억이었고, 조정된 EBITDA는 RMB 20억이었습니다.
2024년 3분기 동안 H 월드는 수익 성장률을 전년 대비 2%-5%로 예상하고 있습니다. 이 회사는 2024년 전체 연도에 대한 호텔 개장 가이드를 약 1,800개에서 2,200개 이상으로 수정했습니다. 2024년 2분기 동안 H 월드는 567개의 호텔을 개장했지만 Legacy-Huazhu의 혼합 RevPAR은 전년 대비 2% 감소했습니다.
H World Group (NASDAQ: HTHT) a publié ses résultats financiers non audités pour le deuxième trimestre 2024. La société exploitait 10 286 hôtels avec 1 001 865 chambres dans le monde au 30 juin 2024.
Le chiffre d'affaires hôtelier a augmenté de 15,5 % par rapport à l'année précédente, atteignant 23,4 milliards de RMB. Les revenus ont augmenté de 11,2 % par rapport à l'année précédente, atteignant 6,1 milliards de RMB, à la limite supérieure de l'orientation précédemment annoncée. Les revenus du segment Legacy-Huazhu ont augmenté de 11,1 %, tandis que ceux du segment Legacy-DH ont augmenté de 11,6 % par rapport à l'année précédente.
Le revenu net attribuable à H World était de 1,1 milliard de RMB, en hausse par rapport à 1,0 milliard de RMB au deuxième trimestre 2023. L'EBITDA (non-GAAP) était de 1,9 milliard de RMB, et l'EBITDA ajusté était de 2,0 milliards de RMB.
Pour le troisième trimestre 2024, H World s'attend à une croissance des revenus de 2 % à 5 % par rapport à l'année précédente. L'entreprise a également révisé ses prévisions d'ouverture d'hôtels pour l'ensemble de l'année 2024, les portant à plus de 2 200 hôtels, contre environ 1 800. Au cours du deuxième trimestre 2024, H World a ouvert 567 hôtels, mais a constaté que le RevPAR combiné de Legacy-Huazhu avait diminué de 2 % par rapport à l'année précédente.
H World Group (NASDAQ: HTHT) hat seine ungeprüften Finanzergebnisse für das zweite Quartal 2024 veröffentlicht. Zum 30. Juni 2024 betrieb das Unternehmen weltweit 10.286 Hotels mit 1.001.865 Zimmern.
Der Umsatz aus Hotels stieg im Jahresvergleich um 15,5% auf 23,4 Milliarden RMB. Der Umsatz nahm im Jahresvergleich um 11,2% auf 6,1 Milliarden RMB zu und lag am oberen Ende der zuvor angekündigten Prognose. Der Umsatz im Segment Legacy-Huazhu stieg um 11,1%, während der Umsatz im Segment Legacy-DH im Jahresvergleich um 11,6% anstieg.
Der Nettogewinn, der H World zuzurechnen ist, betrug 1,1 Milliarden RMB, ein Anstieg von 1,0 Milliarden RMB im zweiten Quartal 2023. Das EBITDA (non-GAAP) betrug 1,9 Milliarden RMB, und das bereinigte EBITDA betrug 2,0 Milliarden RMB.
Für das dritte Quartal 2024 erwartet H World ein Umsatzwachstum von 2%-5% im Vergleich zum Vorjahr. Das Unternehmen hat auch seine Prognose für die Hotelöffnungen im Jahr 2024 auf über 2.200 Hotels, gegenüber etwa 1.800, nach oben korrigiert. Im zweiten Quartal 2024 eröffnete H World 567 Hotels, sah jedoch, dass der blended RevPAR von Legacy-Huazhu im Vergleich zum Vorjahr um 2% zurückging.
- Revenue increased 11.2% YoY to RMB6.1 billion.
- Net income rose to RMB1.1 billion from RMB1.0 billion in Q2 2023.
- EBITDA (non-GAAP) increased to RMB1.9 billion.
- Adjusted EBITDA improved to RMB2.0 billion.
- Hotel turnover grew by 15.5% YoY to RMB23.4 billion.
- Legacy-Huazhu segment's revenue up by 11.1% YoY.
- Legacy-DH segment's revenue increased by 11.6% YoY.
- Full-year 2024 hotel opening guidance revised up to over 2,200 hotels.
- Legacy-Huazhu's blended RevPAR declined by 2% YoY.
- Same-hotel RevPAR for Legacy-Huazhu fell 3.6% YoY.
- General and administrative expenses increased to RMB602 million, up from RMB477 million in Q2 2023.
Insights
H World Group's Q2 2024 results show solid growth and profitability improvements. Revenue increased 11.2% year-over-year to
- Hotel network expanded to 10,286 hotels with 1,001,865 rooms
- RevPAR declined slightly by
2% year-over-year, but occupancy improved - Adjusted EBITDA grew to
RMB2.0 billion , up fromRMB1.8 billion last year - Operating margin improved to
25.6% from25.0% last year
The results reflect H World's successful execution of its asset-light expansion strategy and operational improvements. The company raised its 2024 hotel opening guidance, signaling confidence in continued growth despite near-term economic headwinds in China.
H World Group's Q2 performance demonstrates resilience in a challenging environment. The 82.6% occupancy rate for Legacy-Huazhu hotels is impressive, especially given rapid expansion. While ADR declined slightly, the focus on mid-scale and economy segments positions the company well for China's evolving travel market.
The Legacy-DH segment showed encouraging signs, with RevPAR up
The revised hotel opening guidance of over 2,200 new properties in 2024 is ambitious but achievable given the company's track record. This aggressive expansion, coupled with improved profitability, suggests H World is effectively balancing growth and operational efficiency.
H World's Q2 results reflect broader trends in the Chinese hospitality sector. Despite economic uncertainties, travel demand remains robust, particularly in lower-tier cities where much of H World's expansion is focused. The company's multi-brand strategy allows it to capture diverse market segments.
The 25.8% year-over-year increase in manachised and franchised hotel revenue underscores the success of H World's asset-light model. This approach not only accelerates expansion but also improves margins, as evidenced by the
Looking ahead, H World's emphasis on product upgrades and service excellence should help maintain its competitive edge. The company's ability to grow its hotel network while improving profitability positions it well to capitalize on the long-term growth potential of China's travel industry, despite short-term volatilities.
- A total of 10,286 hotels or 1,001,865 hotel rooms in operation as of June 30, 2024.
- Hotel turnover1 increased
15.5% year-over-year to RMB23.4 billion in the second quarter of 2024. Excluding Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”), hotel turnover from the Legacy-Huazhu segment increased16.2% year-over-year in the second quarter of 2024; and hotel turnover from the Legacy-DH segment increased7.8% year-over-year in the second quarter of 2024. - Revenue increased
11.2% year-over-year to RMB6.1 billion (US$846 million )2 in the second quarter of 2024, at the high end of the previously announced7% to11% revenue increase guidance as compared to the second quarter of 2023. Revenue from the Legacy-Huazhu segment in the second quarter of 2024 increased11.1% year-over-year, also at the high end of the previously announced7% to11% guidance; and revenue from the Legacy-DH segment in the second quarter of 2024 increased11.6% year-over-year. - Net income attributable to H World Group Limited was RMB1.1 billion (US
$147 million ) in the second quarter of 2024, compared with RMB1.0 billion in the second quarter of 2023 and RMB659 million in the previous quarter. Net income attributable to H World Group Limited from the Legacy-Huazhu segment was RMB1.0 billion in the second quarter of 2024, compared with RMB993 million in the second quarter of 2023 and RMB833 million in the previous quarter. Net income attributable to H World Group Limited from the Legacy-DH segment was RMB34 million in the second quarter of 2024, compared with RMB22 million in the second quarter of 2023 and a net loss of RMB174 million in the previous quarter. - EBITDA (non-GAAP) in the second quarter of 2024 was RMB1.9 billion (US
$255 million ), compared with RMB1.7 billion in the second quarter of 2023 and RMB1.3 billion in the previous quarter. - Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses, gain (loss) from fair value changes of equity securities, net foreign exchange gain (loss), and gain (loss) on disposal of investments from EBITDA (non-GAAP), was RMB2.0 billion (US
$280 million ) in the second quarter of 2024, compared with RMB1.8 billion in the second quarter of 2023 and RMB1.4 billion in the previous quarter. - Adjusted EBITDA by segment is our segment measure. Adjusted EBITDA from the Legacy-Huazhu segment was RMB1.9 billion in the second quarter of 2024, compared with RMB1.7 billion in the second quarter of 2023 and RMB1.5 billion in the previous quarter. Adjusted EBITDA from the Legacy-DH segment was RMB131 million in the second quarter of 2024, compared with RMB97 million in the second quarter of 2023 and a loss of RMB66 million in the previous quarter.
- For the third quarter of 2024, H World expects its revenue growth to be in the range of
2% -5% compared to the third quarter of 2023, or in the range of1% -4% excluding DH. - We revise up our hotel opening guidance for the full year of 2024, expecting to open over 2,200 hotels, up from our previous guidance of around 1,800 hotels.
SINGAPORE and SHANGHAI, Aug. 20, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, the “Company”, “we” or “our”), a key player in the global hotel industry, today announced its unaudited financial results for the second quarter and the first half ended June 30, 2024.
As of June 30, 2024, H World’s worldwide hotel network in operation totaled 10,286 hotels and 1,001,865 rooms, including 136 hotels and 27,552 rooms from DH. During the second quarter of 2024, our Legacy-Huazhu business opened 567 hotels, including 4 leased and owned hotels, and 563 manachised and franchised hotels, and closed a total of 101 hotels, including 10 leased and owned hotels and 91 manachised and franchised hotels. As of June 30, 2024, H World had a total of 3,294 unopened hotels in the pipeline, including 3,266 hotels from the Legacy-Huazhu business and 28 hotels from the Legacy-DH business.
Legacy-Huazhu – Second Quarter of 2024 Operational Highlights
As of June 30, 2024, Legacy-Huazhu had 10,150 hotels in operation, including 592 leased and owned hotels, and 9,558 manachised and franchised hotels. In addition, as of the same date, Legacy-Huazhu had 974,313 hotel rooms in operation, including 84,814 rooms under the lease and ownership model, and 889,499 rooms under the manachise and franchise models. Legacy-Huazhu also had 3,266 unopened hotels in its pipeline, including 8 leased and owned hotels, and 3,258 manachised and franchised hotels. The following discusses Legacy-Huazhu’s revenue per available room (“RevPAR”), average daily room rate (“ADR”) and occupancy rate for its leased and owned hotels, as well as manachised and franchised hotels for the periods indicated.
- The ADR was RMB296 in the second quarter of 2024, compared with RMB305 in the second quarter of 2023 and RMB280 in the previous quarter.
- The occupancy rate for all the Legacy-Huazhu hotels in operation was
82.6% in the second quarter of 2024, compared with81.8% in the second quarter of 2023 and77.2% in the previous quarter. - Blended RevPAR was RMB244 in the second quarter of 2024, compared with RMB250 in the second quarter of 2023 and RMB216 in the previous quarter.
- For all the Legacy-Huazhu hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB248 in the second quarter of 2024, representing a
3.6% decline from RMB257 in the second quarter of 2023, with a4.1% decrease in same-hotel ADR partially offset by a 0.4 percentage-point increase in same-hotel occupancy rate.
Legacy-DH – Second Quarter of 2024 Operational Highlights
As of June 30, 2024, Legacy-DH had 136 hotels in operation, including 87 leased hotels, and 49 manachised and franchised hotels. In addition, as of the same date, Legacy-DH had 27,552 hotel rooms in operation, including 16,789 rooms under the lease model, and 10,763 rooms under the manachise and franchise models. Legacy-DH also had 28 unopened hotels in the pipeline, including 13 leased hotels and 15 manachised and franchised hotels. The following discusses Legacy-DH’s RevPAR, ADR and occupancy rate for its leased as well as manachised and franchised hotels (excluding hotels temporarily closed) for the periods indicated.
- The ADR was EUR120 in the second quarter of 2024, compared with EUR117 in the second quarter of 2023 and EUR104 in the previous quarter.
- The occupancy rate for all Legacy-DH hotels in operation was
68.3% in the second quarter of 2024, compared with67.1% in the second quarter of 2023 and55.8% in the previous quarter. - Blended RevPAR was EUR82 in the second quarter of 2024, compared with EUR78 in the second quarter of 2023 and EUR58 in the previous quarter.
Jin Hui, CEO of H World commented: “We are pleased to announce that the Group and Legacy-Huazhu has achieved a remarkable 10,000-hotel milestone during the second quarter of 2024. This milestone also marked a new start for the Group. We believe the Chinese market still presents huge opportunities and growth potentials, and we are ready to scale new heights, moving from 10,000+ hotels in over 1,000 cities to 20,000+ hotels in over 2,000 cities. In the second quarter of 2024, we continued our fast high-quality network growth, opening 567 new hotels in China. While Legacy-Huazhu’s blended RevPAR declined by
“Regarding our business outside China, our Legacy-DH recorded a
Second Quarter and Interim of 2024 Unaudited Financial Results
| (RMB in millions) | Q2 2023 | Q1 2024 | Q2 2024 | H1 2023 | H1 2024 |
| Revenue: | |||||
| Leased and owned hotels | 3,592 | 3,099 | 3,681 | 6,466 | 6,780 |
| Manachised and franchised hotels | 1,856 | 2,063 | 2,334 | 3,410 | 4,397 |
| Others | 82 | 116 | 133 | 134 | 249 |
| Total revenue | 5,530 | 5,278 | 6,148 | 10,010 | 11,426 |
Revenue in the second quarter of 2024 was RMB6.1 billion (US
Revenue in the first half of 2024 was RMB11.4 billion (US
Revenue from leased and owned hotels in the second quarter of 2024 was RMB3.7 billion (US
In the first half of 2024, revenue from our leased and owned hotels was RMB6.8 billion (US
Revenue from manachised and franchised hotels in the second quarter of 2024 was RMB2.3 billion (US
In the first half of 2024, revenue from manachised and franchised hotels was RMB4.4 billion (US
Other revenue represents revenue generated from businesses other than our hotel operations, which mainly includes revenue from the provision of IT products and services and Huazhu Mall™ and other revenue from the Legacy-DH segment, totaling RMB133 million (US
In the first half of 2024, other revenue was RMB249 million (US
| (RMB in millions) | Q2 2023 | Q1 2024 | Q2 2024 | H1 2023 | H1 2024 | |||||
| Operating costs and expenses: | ||||||||||
| Hotel operating costs | (3,482 | ) | (3,565 | ) | (3,731 | ) | (6,732 | ) | (7,296 | ) |
| Other operating costs | (6 | ) | (9 | ) | (6 | ) | (17 | ) | (15 | ) |
| Selling and marketing expenses | (262 | ) | (260 | ) | (317 | ) | (457 | ) | (577 | ) |
| General and administrative expenses | (477 | ) | (509 | ) | (602 | ) | (902 | ) | (1,111 | ) |
| Pre-opening expenses | (12 | ) | (8 | ) | (19 | ) | (21 | ) | (27 | ) |
| Total operating costs and expenses | (4,239 | ) | (4,351 | ) | (4,675 | ) | (8,129 | ) | (9,026 | ) |
Hotel operating costs in the second quarter of 2024 were RMB3.7 billion (US
In the first half of 2024, hotel operating costs were RMB7.3 billion (US
Selling and marketing expenses in the second quarter of 2024 were RMB317 million (US
In the first half of 2024, selling and marketing expenses were RMB577 million (US
General and administrative expenses in the second quarter of 2024 were RMB602 million (US
In the first half of 2024, general and administrative expenses were RMB1.1 billion (US
Pre-opening expenses in the second quarter of 2024 were primarily related to the Legacy-Huazhu segment and totaled RMB19 million (US
Pre-opening expenses in the first half of 2024 were RMB27 million (US
Other operating income, net in the second quarter of 2024 was RMB99 million (US
Other operating income, net in the first half of 2024 was RMB175 million (US
Income from operations in the second quarter of 2024 was RMB1.6 billion (US
Income from operations in the first half of 2024 was RMB2.6 billion (US
Operating margin, defined as income from operations as a percentage of revenue, was
Operating margin in the first half of 2024 was
Other income, net in the second quarter of 2024 was RMB24 million (US
Other income, net in the first half of 2024 was RMB64 million (US
Gains (losses) from fair value changes of equity securities in the second quarter of 2024 were losses of RMB51 million (US
In the first half of 2024, losses from fair value changes of equity securities were RMB13 million (US
Income tax expense in the second quarter of 2024 was RMB423 million (US
In the first half of 2024, income tax expense was RMB702 million (US
Net income attributable to H World Group Limited in the second quarter of 2024 was RMB1.1 billion (US
Net income attributable to H World Group Limited in the first half of 2024 was RMB1.7 billion (US
EBITDA (non-GAAP) in the second quarter of 2024 was RMB1.9 billion (US
EBITDA (non-GAAP) in the first half of 2024 was RMB3.2 billion (US
Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses, gain (loss) from fair value changes of equity securities, net foreign exchange gain (loss), and gain (loss) on disposal of investments from EBITDA (non-GAAP), was RMB2.0 billion (US
Adjusted EBITDA (non-GAAP) in the first half of 2024 was RMB3.5 billion (US
To better reflect the profitability of our core business, we have redefined the non-GAAP measure of adjusted EBITDA, and therefore the above adjusted EBITDA for the second quarter of 2023 and the first half of 2023 have been restated.
Cash flow. Operating cash inflow in the second quarter of 2024 was RMB2.2 billion (US
Operating cash inflow in the first half of 2024 was RMB3.1 billion (US
Cash, cash equivalents and restricted cash. As of June 30, 2024, the Company had a total balance of cash and cash equivalents of RMB7.8 billion (US
Debt financing. As of June 30, 2024, the Company had a total debt and net cash balance of RMB5.5 billion (US
Shareholder return plan
On July 23 2024, the Company’s board of directors (the “Board”) has announced a three-year shareholder return plan with an aggregate amount of distribution that may be made to the Company’s shareholders of up to US
Semi-annual dividend
The Board has declared a cash dividend for the first half of 2024 in the aggregate amount of approximately US
Share repurchase program
On July 23 2024, the Board approved a five-year share repurchase program of ADSs with an aggregate amount of up to US
Guidance
For the third quarter of 2024, H World expects its revenue growth to be in the range of
We revise up our hotel opening guidance for the full year of 2024, expecting to open over 2,200 hotels, and up from our previous guidance of around 1,800 hotels.
The above forecast reflects the Company’s current and preliminary view, which is subject to change.
Conference Call
H World’s management will host a conference call at 9 p.m. U.S. Eastern time on Tuesday, August 20, 2024 (9 a.m. Hong Kong time on Wednesday, August 21, 2024) following the announcement.
To join by phone, all participants must pre-register this conference call using the Participant Registration link of https://register.vevent.com/register/BI29b37e1152634b2aaaec173dd6f6fb8a. Upon registration, each participant will receive details for the conference call, which include dial-in numbers, conference call passcode and a unique access PIN.
A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/8no94rwr or the Company’s website at https://ir.hworld.com/news-and-events/events-calendar.
A replay of the conference call will be available for twelve months from the date of the conference at the Company’s website, https://ir.hworld.com/news-and-events/events-calendar.
Use of Non-GAAP Financial Measures
To supplement the Company’s unaudited consolidated financial results presented in accordance with U.S. Generally-Accepted Accounting Principles (“GAAP”), the Company uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission (“SEC”): adjusted net income (loss) attributable to H World Group Limited excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments; adjusted basic and diluted earnings (losses) per share/ADS excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments; EBITDA; adjusted EBITDA excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and non-GAAP Results” set forth at the end of this release. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding Company performance by excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments that may not be indicative of Company operating performance. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Company performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance. The Company believes these non-GAAP financial measures are also useful to investors in allowing for greater transparency with respect to supplemental information used regularly by Company management in financial and operational decision-making. A limitation of using non-GAAP financial measures excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments is that share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments have been and may continue to be significant and recurring in the Company’s business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
The Company believes that EBITDA is a useful financial metric to assess the operating and financial performance before the impact of investing and financing transactions and income taxes, given the significant investments that the Company has made in leasehold improvements, depreciation and amortization expense that comprise a significant portion of the Company’s cost structure. In addition, the Company believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of financial performance. The Company believes that EBITDA information provides investors with a useful tool for comparability between periods because it excludes depreciation and amortization expense attributable to capital expenditures. The Company also uses adjusted EBITDA to assess operating results of its hotels in operation. The Company believes that the exclusion of share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments helps facilitate year-over-year comparisons of the results of operations as the share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments may not be indicative of Company operating performance.
Therefore, the Company believes adjusted EBITDA more closely reflects the financial performance capability of our hotels. The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that the Company’s future results will be unaffected by other charges and gains considered to be outside the ordinary course of business.
The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets (including land use rights), income tax, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments have been and will be incurred and are not reflected in the presentation of adjusted EBITDA. Each of these items should also be considered in the overall evaluation of the results. The Company compensates for these limitations by providing the relevant disclosure of depreciation and amortization, interest income, interest expense, income tax expense, share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments all in the reconciliations to the U.S. GAAP financial measures and in the consolidated financial statements, all of which should be considered when evaluating the performance of the Company.
The terms EBITDA and adjusted EBITDA are not defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing the operating and financial performance, investors should not consider these data in isolation or as a substitute for the Company’s net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not be comparable to EBITDA or adjusted EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA or adjusted EBITDA in the same manner as the Company does.
Reconciliations of the Company’s non-GAAP financial measures, including EBITDA and adjusted EBITDA, to the consolidated statement of operations information are included at the end of this press release.
About H World Group Limited
Originated in China, H World Group Limited is a key player in the global hotel industry. As of June 30, 2024, H World operated 10,286 hotels with 1,001,865 rooms in operation in 18 countries. H World’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.
H World’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, H World directly operates hotels typically located on leased or owned properties. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints, and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard and platform across all of its hotels. As of June 30, 2024, H World operated 10 percent of its hotel rooms under the lease and ownership model, and 90 percent under the manachise and franchise model.
For more information, please visit H World’s website: https://ir.hworld.com.
Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.
H World undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
—Financial Tables and Operational Data—
| H World Group Limited | |||||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||||
| December 31, 2023 | June 30, 2024 | ||||||||
| RMB | RMB | US$3 | |||||||
| (in millions) | |||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | 6,946 | 7,801 | 1,073 | ||||||
| Restricted cash | 764 | 364 | 50 | ||||||
| Short-term investments | 2,189 | 1,112 | 153 | ||||||
| Accounts receivable, net | 755 | 840 | 116 | ||||||
| Loan receivables, net | 184 | 163 | 23 | ||||||
| Amounts due from related parties, current | 210 | 258 | 36 | ||||||
| Inventories | 59 | 61 | 8 | ||||||
| Other current assets, net | 949 | 868 | 119 | ||||||
| Total current assets | 12,056 | 11,467 | 1,578 | ||||||
| Property and equipment, net | 6,097 | 5,882 | 809 | ||||||
| Intangible assets, net | 5,280 | 5,174 | 712 | ||||||
| Operating lease right-of-use assets | 25,658 | 25,814 | 3,552 | ||||||
| Finance lease right-of-use assets | 2,171 | 2,053 | 283 | ||||||
| Land use rights, net | 181 | 177 | 24 | ||||||
| Long-term investments | 2,564 | 2,499 | 344 | ||||||
| Goodwill | 5,318 | 5,261 | 724 | ||||||
| Amounts due from related parties, non-current | 25 | 21 | 3 | ||||||
| Loan receivables, net | 163 | 158 | 22 | ||||||
| Other assets, net | 663 | 672 | 93 | ||||||
| Deferred tax assets | 1,043 | 1,035 | 142 | ||||||
| Assets held for sale | 2,313 | 2,239 | 308 | ||||||
| Total assets | 63,532 | 62,452 | 8,594 | ||||||
| LIABILITIES AND EQUITY | |||||||||
| Current liabilities: | |||||||||
| Short-term debt | 4,049 | 315 | 44 | ||||||
| Accounts payable | 1,019 | 865 | 119 | ||||||
| Amounts due to related parties | 77 | 119 | 16 | ||||||
| Salary and welfare payables | 1,067 | 843 | 116 | ||||||
| Deferred revenue | 1,637 | 1,760 | 242 | ||||||
| Operating lease liabilities, current | 3,609 | 3,531 | 486 | ||||||
| Finance lease liabilities, current | 45 | 45 | 6 | ||||||
| Accrued expenses and other current liabilities | 3,261 | 3,599 | 495 | ||||||
| Dividends payable | 2,085 | - | - | ||||||
| Income tax payable | 562 | 782 | 107 | ||||||
| Total current liabilities | 17,411 | 11,859 | 1,631 | ||||||
| Long-term debt | 1,265 | 5,220 | 718 | ||||||
| Operating lease liabilities, non-current | 24,215 | 24,334 | 3,348 | ||||||
| Finance lease liabilities, non-current | 2,697 | 2,587 | 356 | ||||||
| Deferred revenue | 1,072 | 1,182 | 163 | ||||||
| Other long-term liabilities | 1,118 | 1,215 | 167 | ||||||
| Deferred tax liabilities | 845 | 818 | 113 | ||||||
| Retirement benefit obligations | 124 | 120 | 17 | ||||||
| Liabilities held for sale | 2,536 | 2,400 | 330 | ||||||
| Total liabilities | 51,283 | 49,735 | 6,843 | ||||||
| Equity: | |||||||||
| Ordinary shares | 0 | 0 | 0 | ||||||
| Treasury shares | (906 | ) | (1,569 | ) | (216 | ) | |||
| Additional paid-in capital | 11,861 | 11,300 | 1,555 | ||||||
| Retained earnings | 794 | 2,520 | 347 | ||||||
| Accumulated other comprehensive income | 386 | 331 | 46 | ||||||
| Total H World Group Limited shareholders' equity | 12,135 | 12,582 | 1,732 | ||||||
| Noncontrolling interest | 114 | 135 | 19 | ||||||
| Total equity | 12,249 | 12,717 | 1,751 | ||||||
| Total liabilities and equity | 63,532 | 62,452 | 8,594 | ||||||
| H World Group Limited | ||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2023 | March 31, 2024 | June 30, 2024 | June 30, 2023 | June 30, 2024 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions, except shares, per share and per ADS data) | ||||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Leased and owned hotels | 3,592 | 3,099 | 3,681 | 507 | 6,466 | 6,780 | 933 | |||||||||||||
| Manachised and franchised hotels | 1,856 | 2,063 | 2,334 | 321 | 3,410 | 4,397 | 605 | |||||||||||||
| Others | 82 | 116 | 133 | 18 | 134 | 249 | 34 | |||||||||||||
| Total revenue | 5,530 | 5,278 | 6,148 | 846 | 10,010 | 11,426 | 1,572 | |||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||
| Hotel operating costs: | ||||||||||||||||||||
| Rents | (1,088 | ) | (1,086 | ) | (1,091 | ) | (150 | ) | (2,139 | ) | (2,177 | ) | (300 | ) | ||||||
| Utilities | (137 | ) | (192 | ) | (149 | ) | (20 | ) | (341 | ) | (341 | ) | (47 | ) | ||||||
| Personnel costs | (1,131 | ) | (1,225 | ) | (1,337 | ) | (184 | ) | (2,167 | ) | (2,562 | ) | (353 | ) | ||||||
| Depreciation and amortization | (332 | ) | (319 | ) | (315 | ) | (43 | ) | (678 | ) | (634 | ) | (87 | ) | ||||||
| Consumables, food and beverage | (335 | ) | (293 | ) | (327 | ) | (45 | ) | (613 | ) | (620 | ) | (85 | ) | ||||||
| Others | (459 | ) | (450 | ) | (512 | ) | (70 | ) | (794 | ) | (962 | ) | (132 | ) | ||||||
| Total hotel operating costs | (3,482 | ) | (3,565 | ) | (3,731 | ) | (512 | ) | (6,732 | ) | (7,296 | ) | (1,004 | ) | ||||||
| Other operating costs | (6 | ) | (9 | ) | (6 | ) | (1 | ) | (17 | ) | (15 | ) | (2 | ) | ||||||
| Selling and marketing expenses | (262 | ) | (260 | ) | (317 | ) | (44 | ) | (457 | ) | (577 | ) | (79 | ) | ||||||
| General and administrative expenses | (477 | ) | (509 | ) | (602 | ) | (83 | ) | (902 | ) | (1,111 | ) | (153 | ) | ||||||
| Pre-opening expenses | (12 | ) | (8 | ) | (19 | ) | (3 | ) | (21 | ) | (27 | ) | (4 | ) | ||||||
| Total operating costs and expenses | (4,239 | ) | (4,351 | ) | (4,675 | ) | (643 | ) | (8,129 | ) | (9,026 | ) | (1,242 | ) | ||||||
| Other operating income (expense), net | 94 | 76 | 99 | 13 | 168 | 175 | 24 | |||||||||||||
| Income (loss) from operations | 1,385 | 1,003 | 1,572 | 216 | 2,049 | 2,575 | 354 | |||||||||||||
| Interest income | 57 | 51 | 56 | 8 | 101 | 107 | 15 | |||||||||||||
| Interest expense | (94 | ) | (83 | ) | (84 | ) | (12 | ) | (224 | ) | (167 | ) | (23 | ) | ||||||
| Other income (expense), net | 32 | 40 | 24 | 3 | 546 | 64 | 9 | |||||||||||||
| Gains (losses) from fair value changes of equity securities | (19 | ) | 38 | (51 | ) | (7 | ) | (6 | ) | (13 | ) | (2 | ) | |||||||
| Foreign exchange gains (losses) | (5 | ) | (92 | ) | (24 | ) | (3 | ) | 99 | (116 | ) | (15 | ) | |||||||
| Income (loss) before income taxes | 1,356 | 957 | 1,493 | 205 | 2,565 | 2,450 | 338 | |||||||||||||
| Income tax (expense) benefit | (308 | ) | (279 | ) | (423 | ) | (58 | ) | (502 | ) | (702 | ) | (97 | ) | ||||||
| Income (Loss) from equity method investments | (12 | ) | (11 | ) | 12 | 2 | (27 | ) | 1 | 0 | ||||||||||
| Net income (loss) | 1,036 | 667 | 1,082 | 149 | 2,036 | 1,749 | 241 | |||||||||||||
| Net (income) loss attributable to noncontrolling interest | (21 | ) | (8 | ) | (15 | ) | (2 | ) | (31 | ) | (23 | ) | (3 | ) | ||||||
| Net income (loss) attributable to H World Group Limited | 1,015 | 659 | 1,067 | 147 | 2,005 | 1,726 | 238 | |||||||||||||
| Gains(losses) from fair value changes of debt securities, net of tax | 20 | - | (25 | ) | (3 | ) | 20 | (25 | ) | (3 | ) | |||||||||
| Foreign currency translation adjustments, net of tax | 183 | (31 | ) | 1 | 0 | 222 | (30 | ) | (4 | ) | ||||||||||
| Comprehensive income (loss) | 1,239 | 636 | 1,058 | 146 | 2,278 | 1,694 | 234 | |||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interest | (21 | ) | (8 | ) | (15 | ) | (2 | ) | (31 | ) | (23 | ) | (3 | ) | ||||||
| Comprehensive income (loss) attributable to H World Group Limited | 1,218 | 628 | 1,043 | 144 | 2,247 | 1,671 | 231 | |||||||||||||
| Earnings (Losses) per share: | ||||||||||||||||||||
| Basic | 0.32 | 0.21 | 0.34 | 0.05 | 0.63 | 0.55 | 0.08 | |||||||||||||
| Diluted | 0.31 | 0.21 | 0.33 | 0.05 | 0.62 | 0.54 | 0.07 | |||||||||||||
| Earnings (Losses) per ADS: | ||||||||||||||||||||
| Basic | 3.18 | 2.10 | 3.40 | 0.47 | 6.30 | 5.50 | 0.76 | |||||||||||||
| Diluted | 3.11 | 2.08 | 3.32 | 0.46 | 6.16 | 5.41 | 0.74 | |||||||||||||
| Weighted average number of shares used in computation: | ||||||||||||||||||||
| Basic | 3,187,331,990 | 3,139,466,152 | 3,137,722,145 | 3,137,722,145 | 3,180,817,047 | 3,138,594,148 | 3,138,594,148 | |||||||||||||
| Diluted | 3,354,717,904 | 3,172,770,493 | 3,303,934,814 | 3,303,934,814 | 3,349,256,828 | 3,300,316,153 | 3,300,316,153 | |||||||||||||
H World Group Limited | ||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2023 | March 31, 2024 | June 30, 2024 | June 30, 2023 | June 30, 2024 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions) | ||||||||||||||||||||
| Operating activities: | ||||||||||||||||||||
| Net income (loss) | 1,036 | 667 | 1,082 | 149 | 2,036 | 1,749 | 241 | |||||||||||||
| Share-based compensation | 34 | 58 | 112 | 15 | 61 | 170 | 23 | |||||||||||||
| Depreciation and amortization, and other | 359 | 345 | 337 | 46 | 744 | 682 | 94 | |||||||||||||
| Impairment loss | 80 | - | 36 | 5 | 80 | 36 | 5 | |||||||||||||
| Loss (Income) from equity method investments, net of dividends | 68 | 11 | 30 | 4 | 83 | 41 | 6 | |||||||||||||
| Investment (income) loss and foreign exchange (gain) loss | (96 | ) | 29 | 41 | 6 | (640 | ) | 70 | 10 | |||||||||||
| Changes in operating assets and liabilities | 712 | (230 | ) | 750 | 103 | 1,732 | 520 | 71 | ||||||||||||
| Other | 45 | 6 | (153 | ) | (21 | ) | (14 | ) | (147 | ) | (20 | ) | ||||||||
| Net cash provided by (used in) operating activities | 2,238 | 886 | 2,235 | 307 | 4,082 | 3,121 | 430 | |||||||||||||
| Investing activities: | ||||||||||||||||||||
| Capital expenditures | (171 | ) | (281 | ) | (203 | ) | (28 | ) | (393 | ) | (484 | ) | (67 | ) | ||||||
| Purchase of investments | (961 | ) | (254 | ) | (632 | ) | (87 | ) | (962 | ) | (886 | ) | (122 | ) | ||||||
| Proceeds from maturity/sale and return of investments | 2 | 842 | 1,139 | 157 | 2,202 | 1,981 | 272 | |||||||||||||
| Loan advances | (41 | ) | (52 | ) | (12 | ) | (2 | ) | (75 | ) | (64 | ) | (9 | ) | ||||||
| Loan collections | 38 | 38 | 53 | 7 | 72 | 91 | 13 | |||||||||||||
| Other | 1 | 55 | 1 | 0 | 5 | 56 | 8 | |||||||||||||
| Net cash provided by (used in) investing activities | (1,132 | ) | 348 | 346 | 47 | 849 | 694 | 95 | ||||||||||||
| Financing activities: | ||||||||||||||||||||
| Net proceeds from issuance of ordinary shares | - | - | - | - | 1,973 | - | - | |||||||||||||
| Payment of share repurchase | - | (544 | ) | (132 | ) | (18 | ) | - | (676 | ) | (93 | ) | ||||||||
| Proceeds from debt | 300 | 536 | 53 | 7 | 728 | 589 | 81 | |||||||||||||
| Repayment of debt | (4,103 | ) | (137 | ) | (292 | ) | (40 | ) | (4,992 | ) | (429 | ) | (59 | ) | ||||||
| Dividend paid | - | (2,091 | ) | - | - | - | (2,091 | ) | (288 | ) | ||||||||||
| Purchase of prepaid put option | - | - | (710 | ) | (98 | ) | - | (710 | ) | (98 | ) | |||||||||
| Other | (21 | ) | (22 | ) | (24 | ) | (3 | ) | (71 | ) | (46 | ) | (6 | ) | ||||||
| Net cash provided by (used in) financing activities | (3,824 | ) | (2,258 | ) | (1,105 | ) | (152 | ) | (2,362 | ) | (3,363 | ) | (463 | ) | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 202 | (17 | ) | 10 | 2 | 181 | (7 | ) | (1 | ) | ||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (2,516 | ) | (1,041 | ) | 1,486 | 204 | 2,750 | 445 | 61 | |||||||||||
| Less: net increase (decrease) in cash and cash equivalents classified within assets held for sale | - | 5 | (15 | ) | (2 | ) | - | (10 | ) | (1 | ) | |||||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 10,352 | 7,710 | 6,664 | 917 | 5,086 | 7,710 | 1,061 | |||||||||||||
| Cash, cash equivalents and restricted cash at the end of the period | 7,836 | 6,664 | 8,165 | 1,123 | 7,836 | 8,165 | 1,123 | |||||||||||||
| H World Group Limited | ||||||||||||||||||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | ||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2023 | March 31, 2024 | June 30, 2024 | June 30, 2023 | June 30, 2024 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions, except shares, per share and per ADS data) | ||||||||||||||||||||
| Net income (loss) attributable to H World Group Limited (GAAP) | 1,015 | 659 | 1,067 | 147 | 2,005 | 1,726 | 238 | |||||||||||||
| Share-based compensation expenses | 34 | 58 | 112 | 15 | 61 | 170 | 23 | |||||||||||||
| (Gain) loss from fair value changes of equity securities | 19 | (38 | ) | 51 | 7 | 6 | 13 | 2 | ||||||||||||
| Foreign exchange (gain) loss, net | 5 | 92 | 24 | 3 | (99 | ) | 116 | 15 | ||||||||||||
| (Gain) loss on disposal of investments | - | - | - | - | (516 | ) | - | - | ||||||||||||
| Adjusted net income (loss) attributable to H World Group Limited (non-GAAP) | 1,073 | 771 | 1,254 | 172 | 1,457 | 2,025 | 278 | |||||||||||||
| Adjusted earnings (losses) per share (non-GAAP) | ||||||||||||||||||||
| Basic | 0.34 | 0.25 | 0.40 | 0.05 | 0.46 | 0.65 | 0.09 | |||||||||||||
| Diluted | 0.33 | 0.24 | 0.39 | 0.05 | 0.45 | 0.63 | 0.09 | |||||||||||||
| Adjusted earnings (losses) per ADS (non-GAAP) | ||||||||||||||||||||
| Basic | 3.37 | 2.46 | 3.99 | 0.55 | 4.58 | 6.45 | 0.89 | |||||||||||||
| Diluted | 3.29 | 2.43 | 3.88 | 0.53 | 4.51 | 6.31 | 0.87 | |||||||||||||
| Weighted average number of shares used in computation | ||||||||||||||||||||
| Basic | 3,187,331,990 | 3,139,466,152 | 3,137,722,145 | 3,137,722,145 | 3,180,817,047 | 3,138,594,148 | 3,138,594,148 | |||||||||||||
| Diluted | 3,354,717,904 | 3,172,770,493 | 3,303,934,814 | 3,303,934,814 | 3,349,256,828 | 3,300,316,153 | 3,300,316,153 | |||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2023 | March 31, 2024 | June 30, 2024 | June 30, 2023 | June 30, 2024 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions, except per share and per ADS data) | ||||||||||||||||||||
| Net income (loss) attributable to H World Group Limited (GAAP) | 1,015 | 659 | 1,067 | 147 | 2,005 | 1,726 | 238 | |||||||||||||
| Interest income | (57 | ) | (51 | ) | (56 | ) | (8 | ) | (101 | ) | (107 | ) | (15 | ) | ||||||
| Interest expense | 94 | 83 | 84 | 12 | 224 | 167 | 23 | |||||||||||||
| Income tax expense | 308 | 279 | 423 | 58 | 502 | 702 | 97 | |||||||||||||
| Depreciation and amortization | 354 | 339 | 335 | 46 | 721 | 674 | 93 | |||||||||||||
| EBITDA (non-GAAP) | 1,714 | 1,309 | 1,853 | 255 | 3,351 | 3,162 | 436 | |||||||||||||
| Share-based compensation | 34 | 58 | 112 | 15 | 61 | 170 | 23 | |||||||||||||
| (Gain) loss from fair value changes of equity securities | 19 | (38 | ) | 51 | 7 | 6 | 13 | 2 | ||||||||||||
| Foreign exchange (gain) loss, net | 5 | 92 | 24 | 3 | (99 | ) | 116 | 15 | ||||||||||||
| (Gain) loss on disposal of investments | - | - | - | - | (516 | ) | - | - | ||||||||||||
| Adjusted EBITDA (non-GAAP) | 1,772 | 1,421 | 2,040 | 280 | 2,803 | 3,461 | 476 | |||||||||||||
| H World Group Limited | ||||||||||||
| Segment Financial Summary | ||||||||||||
| Quarter Ended June 30, 2023 | Quarter Ended March 31, 2024 | Quarter Ended June 30, 2024 | ||||||||||
| Legacy- Huazhu | Legacy- DH | Legacy- Huazhu | Legacy- DH | Legacy- Huazhu | Legacy- DH | |||||||
| RMB | RMB | RMB | RMB | RMB | RMB | |||||||
| (in millions) | (in millions) | (in millions) | ||||||||||
| Leased and owned hotels | 2,466 | 1,126 | 2,112 | 987 | 2,395 | 1,286 | ||||||
| Manachised and franchised hotels | 1,830 | 26 | 2,042 | 21 | 2,305 | 29 | ||||||
| Others | 51 | 31 | 91 | 25 | 128 | 5 | ||||||
| Revenue | 4,347 | 1,183 | 4,245 | 1,033 | 4,828 | 1,320 | ||||||
| Depreciation and amortization | 294 | 60 | 280 | 59 | 279 | 56 | ||||||
| Adjusted EBITDA | 1,675 | 97 | 1,487 | (66 | ) | 1,909 | 131 | |||||
| H World Group Limited | ||||||||
| Segment Financial Summary | ||||||||
| Six Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | |||||||
| Legacy- Huazhu | Legacy- DH | Legacy- Huazhu | Legacy- DH | |||||
| RMB | RMB | RMB | RMB | |||||
| (in millions) | (in millions) | |||||||
| Leased and owned hotels | 4,486 | 1,980 | 4,507 | 2,273 | ||||
| Manachised and franchised hotels | 3,366 | 44 | 4,347 | 50 | ||||
| Others | 89 | 45 | 219 | 30 | ||||
| Revenue | 7,941 | 2,069 | 9,073 | 2,353 | ||||
| Depreciation and amortization | 598 | 123 | 559 | 115 | ||||
| Adjusted EBITDA | 2,803 | (0 | ) | 3,396 | 65 | |||
Operating Results: Legacy-Huazhu(1)
| Number of hotels | Number of rooms | |||||
| Opened in Q2 2024 | Closed (2) in Q2 2024 | Net added in Q2 2024 | As of June 30, 2024 | As of June 30, 2024 | ||
| Leased and owned hotels | 4 | (10) | (6) | 592 | 84,814 | |
| Manachised and franchised hotels | 563 | (91) | 472 | 9,558 | 889,499 | |
| Total | 567 | (101) | 466 | 10,150 | 974,313 | |
| (1) Legacy-Huazhu refers to H World and its subsidiaries, excluding DH. (2) The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q2 2024, we temporarily closed 12 hotels for brand upgrade or business model change purposes. | ||||||
| As of June 30, 2024 | ||
| Number of hotels | Unopened hotels in pipeline | |
| Economy hotels | 5,270 | 1,209 |
| Leased and owned hotels | 313 | 0 |
| Manachised and franchised hotels | 4,957 | 1,209 |
| Midscale, upper-midscale hotels and others | 4,880 | 2,057 |
| Leased and owned hotels | 279 | 8 |
| Manachised and franchised hotels | 4,601 | 2,049 |
| Total | 10,150 | 3,266 |
| For the quarter ended | ||||
| June 30, | March 31, | June 30, | yoy | |
| 2023 | 2024 | 2024 | change | |
| Average daily room rate (in RMB) | ||||
| Leased and owned hotels | 384 | 346 | 375 | - |
| Manachised and franchised hotels | 295 | 272 | 288 | - |
| Blended | 305 | 280 | 296 | - |
| Occupancy rate (as a percentage) | ||||
| Leased and owned hotels | +2.0 p.p. | |||
| Manachised and franchised hotels | +0.6 p.p. | |||
| Blended | +0.7 p.p. | |||
| RevPAR (in RMB) | ||||
| Leased and owned hotels | 321 | 280 | 321 | |
| Manachised and franchised hotels | 241 | 209 | 237 | - |
| Blended | 250 | 216 | 244 | - |
| Same-hotel operational data by class | |||||||||||||||
| Mature hotels in operation for more than 18 months | |||||||||||||||
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||
| As of June 30, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended June 30, | change | ended June 30, | change | ended June 30, | change | ||||||||||
| 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | (p.p.) | |||||||
| Economy hotels | 3,751 | 3,751 | 198 | 190 | -4.2 | % | 235 | 225 | -4.1 | % | 84.4 | % | 84.3 | % | -0.1 |
| Leased and owned hotels | 299 | 299 | 241 | 235 | -2.6 | % | 281 | 268 | -4.6 | % | 85.8 | % | 87.5 | % | +1.7 |
| Manachised and franchised hotels | 3,452 | 3,452 | 193 | 184 | -4.5 | % | 229 | 219 | -4.1 | % | 84.3 | % | 83.9 | % | -0.3 |
| Midscale, upper-midscale hotels and others | 3,169 | 3,169 | 308 | 299 | -3.2 | % | 377 | 361 | -4.2 | % | 81.7 | % | 82.6 | % | +0.9 |
| Leased and owned hotels | 260 | 260 | 397 | 390 | -1.9 | % | 481 | 461 | -4.3 | % | 82.5 | % | 84.6 | % | +2.1 |
| Manachised and franchised hotels | 2,909 | 2,909 | 296 | 286 | -3.3 | % | 363 | 348 | -4.2 | % | 81.6 | % | 82.4 | % | +0.7 |
| Total | 6,920 | 6,920 | 257 | 248 | -3.6 | % | 310 | 297 | -4.1 | % | 83.0 | % | 83.4 | % | +0.4 |
Operating Results: Legacy-DH(3)
| Number of hotels | Number of rooms | Unopened hotels in pipeline | ||||||
| Opened in Q2 2024 | Closed in Q2 2024 | Net added in Q2 2024 | As of June 30, 2024(4) | As of June 30, 2024 | As of June 30, 2024 | |||
| Leased hotels | 4 | (1) | 3 | 87 | 16,789 | 13 | ||
| Manachised and franchised hotels | 1 | (1) | - | 49 | 10,763 | 15 | ||
| Total | 5 | (2) | 3 | 136 | 27,552 | 28 | ||
| (3) Legacy-DH refers to DH. (4) As of June 30, 2024, a total of 2 hotels were temporarily closed due to repair work. | ||||||||
| For the quarter ended | ||||
| June 30, | March 31, | June 30, | yoy | |
| 2023 | 2024 | 2024 | change | |
| Average daily room rate (in EUR) | ||||
| Leased hotels | 119 | 110 | 124 | |
| Manachised and franchised hotels | 112 | 95 | 112 | |
| Blended | 117 | 104 | 120 | |
| Occupancy rate (as a percentage) | ||||
| Leased hotels | +1.9 p.p. | |||
| Manachised and franchised hotels | +0.0 p.p. | |||
| Blended | +1.2 p.p. | |||
| RevPAR (in EUR) | ||||
| Leased hotels | 83 | 61 | 88 | |
| Manachised and franchised hotels | 71 | 54 | 72 | |
| Blended | 78 | 58 | 82 | |
Hotel Portfolio by Brand
| As of June 30, 2024 | |||
| Hotels | Rooms | Unopened hotels | |
| in operation | in pipeline | ||
| Economy hotels | 5,288 | 433,604 | 1,220 |
| HanTing Hotel | 3,883 | 341,015 | 816 |
| Hi Inn | 512 | 26,183 | 234 |
| Ni Hao Hotel | 348 | 25,935 | 148 |
| Elan Hotel | 299 | 15,734 | - |
| Ibis Hotel | 228 | 22,582 | 11 |
| Zleep Hotels | 18 | 2,155 | 11 |
| Midscale hotels | 4,028 | 430,320 | 1,465 |
| Ibis Styles Hotel | 108 | 10,679 | 19 |
| Starway Hotel | 712 | 58,791 | 168 |
| JI Hotel | 2,472 | 282,926 | 954 |
| Orange Hotel | 736 | 77,924 | 324 |
| Upper midscale hotels | 801 | 110,897 | 515 |
| Crystal Orange Hotel | 206 | 26,181 | 147 |
| CitiGO Hotel | 35 | 5,248 | 7 |
| Manxin Hotel | 147 | 13,441 | 87 |
| Madison Hotel | 110 | 13,658 | 87 |
| Mercure Hotel | 182 | 29,082 | 65 |
| Novotel Hotel | 30 | 6,740 | 16 |
| IntercityHotel(5) | 81 | 14,802 | 101 |
| MAXX(6) | 10 | 1,745 | 5 |
| Upscale hotels | 143 | 21,337 | 86 |
| Jaz in the City | 3 | 587 | 1 |
| Joya Hotel | 7 | 1,237 | - |
| Blossom House | 69 | 3,031 | 71 |
| Grand Mercure Hotel | 9 | 1,796 | 2 |
| Steigenberger Hotels & Resorts(7) | 55 | 14,686 | 12 |
| Luxury hotels | 15 | 2,234 | 3 |
| Steigenberger Icon(8) | 8 | 1,721 | 2 |
| Song Hotels | 7 | 513 | 1 |
| Others | 11 | 3,473 | 5 |
| Other hotels(9) | 11 | 3,473 | 5 |
| Total | 10,286 | 1,001,865 | 3,294 |
(5) As of June 30, 2024, 23 operational hotels and 96 pipeline hotels of IntercityHotel were in China.
(6) As of June 30, 2024, 5 operational hotels and 4 pipeline hotels of MAXX were in China.
(7) As of June 30, 2024, 12 operational hotels and 5 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(8) As of June 30, 2024, 3 operational hotels and 1 pipeline hotel of Steigenberger Icon were in China.
(9) Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).
_________________________________
1 Hotel turnover refers to total transaction value of room and non-room revenue from H World hotels (i.e., leased and operated, manachised and franchised hotels).
2 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US
3 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US
Contact Information
Investor Relations
Tel: +86 (21) 6195 9561
Email: ir@hworld.com
https://ir.hworld.com
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