January 16, 2018 / 9:56 AM / in a year

Scandic Hotels says weak demand in Stockholm hit earnings, shares fall

STOCKHOLM, Jan 16 (Reuters) - The Nordic region’s biggest hotel operator, Scandic Hotels, warned on Tuesday that weak demand in Stockholm and staffing costs would push fourth-quarter profit down, sending its shares into a tailspin.

The firm predicted an adjusted profit before interest, tax, depreciation and amortisation (EBITDA) of around 330 million crowns ($41.1 million), against a year-ago 392 million.

That indicates a full-year profit of around 1.57 billion crowns. The mean full-year estimate in Reuters’ latest poll of analysts, ahead of third-quarter results, was for 1.68 billion.

“The decline in earnings is primarily attributable to operations in Stockholm where the market was weak in the quarter, and costs were not fully adjusted in line with the weaker like-for-like sales development,” it said in a statement.

Shares were down 18.4 percent at 94.20 crowns by 0932 GMT, their lowest level since April 2017.

Scandic Hotels said it saw adjusted EBITDA in Sweden shrinking to around 200 million crowns from 264 million in the quarter, while in other markets earnings had remained positive.

Incentive programmes and other one-off staff costs would also weigh on results, it added.

$1 = 8.0315 Swedish crowns Reporting by Anna Ringstrom, editing by Louise Heavens

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