Accor Profit Rises As Cost-Cutting Revamp Pays off

French hotel group Accor SA’s (AC.FR) first-half net profit rose to 60 million euros ($79 million) from 34 million euros as cost cutting and restructuring begins to pay off, it said Tuesday.

It expects full-year earnings to exceed last year and is aiming for earnings before interest and taxes between 575 million euros and 595 million euro compared with 521 million euros. First-half Ebit rose 15% to 219 million euros in spite of currency swings affecting revenue.

Last month it reported a 1.8% drop in first-half sales because of a weaker Australian dollar and Brazilian real, it said.

Business was stable over the summer with all regions except France seeing increased revenue per available room–an important industry measure. A rise in value added tax in France dented growth.

It bought 13 Ibis hotels in the U.K. from Tritax for 89 million euros, it said Tuesday. In May it bought back around 100 hotels in Europe it had previously sold and then leased back.

Accor was split last year into two separate divisions.

Source: Marketwatch