French hotel and services group Accor has launched a feasibility study on splitting its hotel and paid services operations. This comes as it posted a net loss of 150 million euros for the six months to June.
AFP - French hotel and services group Accor, hit badly by the global downturn, said on Thursday that it slumped to a first half loss while full-year overall earnings would be halved.
For the six months to June, Accor posted a net loss of 150 million euros (215 million dollars), after a year-earlier net profit of 310 million euros which was boosted by asset sales.
The results reflected write-downs and restructuring charges, it said.
The company said it expected no major improvement in the hotel business over the second half and would seek increased cost savings of 150 million euros, up from 120 million euros.
Accor said it expected to report a 2009 pre-tax profit before exceptional items of 400-450 million euros, down from 875 million euros in 2008.
It also said that it was considering reorganising its business by splitting the hotel and paid services operations.
"The board has approved the proposal... to conduct a feasibility study on separating the two businesses," said Accor, one of the world's largest hotel groups.
The services side of the company, based around its Ticket Restaurant business, produced only 13 percent of total sales in 2008 but accounted for 40 percent of operating profit, a company official said.
Accor believes the two operations no longer complement each other.
The market welcomed the news, sending Accor shares up nearly eight percent in morning trade while the overall market was up 0.34 percent.
Date created : 2009-08-27