Braemar Hotels & Resorts Inc. Reports Mixed Results Amidst Challenging Market Conditions
Comparable RevPAR: Decreased by 4% in Q4 and 1.6% for the full year.
Net Loss: $(31.1) million for Q4 and $(74.0) million for the full year.
Adjusted EBITDAre: Increased by 3% to $176.7 million for the full year.
Adjusted FFO: $0.04 per diluted share for Q4 and $0.61 for the full year.
Capital Structure: Net debt to gross assets was 39.7% at the end of Q4.
Dividends: Quarterly cash dividend of $0.05 per diluted share for Q1 2024 announced.
Debt Management: Successfully extended and refinanced key mortgage loans post Q4.
Braemar Hotels & Resorts Inc (NYSE:BHR) released its 8-K filing on February 29, 2024, detailing its financial results for the fourth quarter and full year ended December 31, 2023. The company, a real estate investment trust specializing in luxury hotels and resorts, faced a challenging quarter with a decrease in Comparable Revenue Per Available Room (RevPAR) and net loss attributable to common stockholders. However, the full year results showed resilience with a 3% growth in Adjusted EBITDAre.
Financial Performance Overview
Braemar's fourth quarter saw a decline in Comparable RevPAR by 4% to $288, with a 3.6% decrease in Average Daily Rate (ADR) and a 0.9% drop in occupancy. The net loss for the quarter was significant at $(31.1) million, equating to $(0.47) per diluted share. The full year painted a slightly better picture with a modest 1.6% dip in Comparable RevPAR and a 3% increase in Adjusted EBITDAre to $176.7 million, reflecting the company's ability to manage operations effectively amidst market headwinds.
Capital Structure and Debt Management
Braemar ended the quarter with a strong liquidity position, including $85.6 million in cash and cash equivalents and $80.9 million in restricted cash. The company's net debt to gross assets ratio stood at 39.7%. Notably, Braemar took proactive steps in managing its debt profile by extending and refinancing several mortgage loans, which is crucial for maintaining financial flexibility and reducing future interest expenses.
Dividends and Outlook
The Board of Directors declared a quarterly cash dividend of $0.05 per diluted share for Q1 2024, underscoring the company's commitment to returning value to shareholders. The management remains optimistic about the portfolio's performance, particularly with the expected increase in group pace and the strategic positioning of its properties.
Analysis and Future Considerations
While the quarterly results show challenges in terms of revenue and occupancy, the full year's growth in Adjusted EBITDAre and the successful debt management initiatives are positive indicators. The company's focus on luxury properties, which tend to be more resilient in downturns, and its strategic refinancing efforts position it to potentially outperform in the recovering market. However, investors should be mindful of the ongoing challenges in the hospitality sector and monitor the company's ability to sustain dividend payments and manage its debt obligations.
For a detailed analysis of Braemar Hotels & Resorts Inc's financials and future prospects, investors are encouraged to review the full earnings release and consider the company's strategies for navigating the current market environment.
Explore the complete 8-K earnings release (here) from Braemar Hotels & Resorts Inc for further details.
This article first appeared on GuruFocus.
