SOL MELIA ANNUAL REPORT 00 COMP

MILESTONES 2000· FINANCIAL RESULTS
As regards the Balance Sheet, the most important
changes that have been seen are due to the
purchase of Tryp Hotels, thanks to which Sol
Meliá assets have grown to almost half a
billion pesetas.
Net debt has increased by 57% due to the large
number of investments that have been made,
particularly, as we have already mentioned, the
purchase of Tryp. The ratio of net debt to own
funds has increased from 67% to 77.6%, a fact
which has meant that the average weighted
cost of debt has risen from 5.1% to 5.7%.
Finally, the ratio of interest coverage was at 5.1
times EBITDA at the end of the year, while all
short term liquidity ratios have improved with
respect to the previous year.
This excellent situation, together with well
structured financial planning for the coming
years have led Standard & Poor’s to classify the
health of the company balance sheet with a
BBB (stable) rating.
“From a financial
point of view, the
year 2000 has been
another record year
for Sol Meliá. The
purchase of Tryp
Hotels has made an
enormous contribution
to our firm
policy of providing
greater value for
shareholders,
allowing us to
increase the size
and profitability of
the company and
increasing earnings
per share”.
Onofre Servera,
Executive Vice President
Finance”
During the year Sol Meliá sold the Meliá Bávaro
(Dominican Republic), Sol Inn Bardinos (Gran
Canaria), Sol Las Olas (Fuerteventura), Sol Punta
Elena Apartamentos (Fuerteventura) and the
Guadalajara Industrial Laundry. These sales occurred
as part of an asset sales plan for the year 2000
that has generated additional revenues of 15,000
million pesetas –90 million euros- and capital
gains of 4,250 million pesetas (€ 25.54 million).
The main objective of the plan has been to benefit
from good divestment opportunities for nonstrategic
assets or in areas where the company
has already consolidated its presence, freeing up
resources for increasing the category of the company
portfolio in new destinations.
During the year there was also a gross dividend
payment of 20,057 pesetas to shareholders related
to 1999 results, and there was also an attendance
premium at the latest General
Shareholders’ Meeting of € 0.02 (3,33 pesetas)
gross per share.
Balance sheet 2000
Cash Flow
Another of the key features of Sol Meliá
financial policy for the year 2000 is 131,947
million pesetas (€ 792 million) made in
investments, of which 60,000 million pesetas
(€ 360 million) was used for the acquisition
of Tryp. The financing of that deal was achieved
through a capital increase of 33,000
million pesetas (€ 198 million) and debt of
27,000 million pesetas (€ 162 million). The
total increase in debt for the year 2000 rose to
68,000 million pesetas (€ 409 million).
Amongst other ends, other investments made
during the year 2000 included the hotel projects
Meliá Avenue Louise Boutique Hotel
(Brussels), Meliá Milano (Italy) and Paradisus
Puerto Rico (Puerto Rico), as web as the E-
transformation process and the renovation and
refurbishment of the company hotel portfolio.
Data in thousand Ptas.
CASH FLOW 2000
FUNDS FROM OPERATIONS 33,729,836
(INCREASE) / DECREASE OF WORKING CAPITAL (11,802,286)
CAPITAL EXPENDITURE (131,309,219)
PROCEEDS FROM ASSET SALES 14,170,521
CAPITAL INCREASE 32,999,602
INTEREST BEARING FINANCING 68,065,186
DIVIDENDS PAID AND ATTENDANCE PRIME (3,902,625)
INCREASE / (DECREASE) OF CASH 1,951,016
BEGINNING CASH 10,425,394
ENDING CASH 12,376,410
INCREASE IN DEBT NET 66,114,170
S OL
M ELIÁ
A NNUAL R EPORT 2000
24