Dan Hotels Corp. Ltd. (TASE: DANH) today published its financial reports for the fourth quarter of 2006 and the year as a whole. The company posted an all-time profit, despite the events of last year.
Dan Hotels posted a net profit of NIS 127.5 million in 2006, up 102.4% on the NIS 63 million posted in 2005. Revenue rose 5.9% to NIS 707 million from NIS 667.8 million.
Revenue rose by more than 20% in the first half of 2006, compared with the corresponding half of 2005, but the second Lebanon war greatly reduced the number of incoming tourists, with the tour groups segments taking the biggest hit. As a result, third quarter revenue fell 9% compared with the corresponding quarter, and, despite renewed growth in incoming tourism after the war, fourth quarter revenue was 2.5% less than for the corresponding quarter.
Despite the increase in revenue for the year, Dan Hotels’ profit margin was almost unchanged, mainly because of higher labor costs, the increase in the minimum wage, and higher prices for other inputs.
The company’s shareholders’ equity was NIS 609.2 million at the end of 2006.
Dan Hotels CEO Ami Hirschstein said, “The business results indicate the strength of the tourism industry in general, and Dan Hotels in particular. Israel’s tourism industry is cyclical and affected by many exogenous factors, the most important of which are the geopolitical situation and regional stability. This volatility affected revenue and profits for the third and fourth quarters, but it is necessary to emphasize the company’s ability to adapt to changing realities. Although the negative trends caused by the Lebanon war have eased, they still have a major impact.”
Published by Globes [online], Israel business news - www.globes.co.il - on March 26, 2007
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