Earnings Summary: H World Group Limited Reports Third Quarter 2024 Financial Results
H World Group Limited (NASDAQ: HTHT), a major entity in the global hotel industry, published its unaudited financial statements for the third quarter concluded on September 30, 2024.
Key Financial Metrics:
| Metric | Q3 2024 | Q3 2023 | Q2 2024 | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Total Revenue | $918 million | -- | -- | +2.4% | +4.8% |
| Net Income | $181 million | $186 million | $157 million | -- | +15.3% |
| Adjusted EBITDA (Non-GAAP) | $300 million | $328 million | $286 million | -8.5% | +4.9% |
Interpretation:
The modest year-over-year revenue increase of 2.4% aligns with guidance, driven largely by legacy segment improvements. Revenue remained slightly below the consensus estimates at $918 million. Despite these gains, adjusted EBITDA shows a year-on-year decline of 8.5%, indicating potential cost pressures.
Revenue by Segment:
| Segment | Q3 2024 Revenue | YoY Change | QoQ Change |
|---|---|---|---|
| Legacy-Huazhu | $742 million | +1.0% | +6.9% |
| Legacy-DH | $177 million | +8.9% | -3.0% |
Interpretation:
The Legacy-Huazhu segment displayed stability with a year-over-year revenue increase within the anticipated range, while Legacy-DH showed robust growth year-on-year but contracted quarter-over-quarter, partly due to one-off restructuring costs.
Key Developments and Operational Highlights:
- H World expanded its hotel network significantly, reaching a total of 10,845 hotels and 1,062,546 rooms globally.
- Legacy-Huazhu opened 774 new hotels during Q3, predominantly within China's lower-tier cities.
- A recorded 10.3% decline in same-hotel RevPAR year-over-year for Legacy-Huazhu, affected by high ADR bases and poor weather conditions.
- Commitment to sustainable growth with a focus on penetrating lower-tier markets and maintaining high occupancy.
Management Commentary:
Jin Hui, CEO, emphasized the strategic expansion of their network across China and progress in lowering costs within European markets through the Legacy-DH segment. Hui highlighted H World's ambition in continuing expansion into APAC and Middle Eastern markets.
Dividends and Share Repurchase:
- Dividends of RMB1.4 billion ($200 million) were paid in Q3.
- Announcements about any new share repurchase programs were not made.
Forward Guidance:
For the fourth quarter of 2024, H World anticipates revenue growth between 1% and 5%, indicating cautious optimism in ongoing recovery and expansion efforts.
Stock Price Movement:
Following the earnings release, H World's stock price decreased by approximately 1.76%.
This detailed review reveals a solid performance from H World Group Limited, with strategic expansion efforts paired with cautious fiscal management, set against a backdrop of volatile but improving market conditions.
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