Hotel Properties Full Year 2024 Earnings: Revenues Beat Expectations, EPS Lags

Hotel Properties (SGX:H15) reported its full year 2024 earnings on March 2nd, 2025, with revenues exceeding analyst estimates but earnings per share (EPS) falling short. The company's revenue grew by 7.9% year-over-year, reaching S$692.9 million, while net income attributable to common stockholders decreased by 95% to S$27.2 million. The profit margin also declined significantly, from 86% in 2023 to 3.9% in 2024.

Revenue exceeded analyst estimates by 7.2%, driven by strong performance in the company's hotel portfolio. However, earnings per share (EPS) missed analyst estimates by 80%, primarily due to a significant decrease in net income. The company's share price remained broadly unchanged from a week ago, indicating that investors may be focusing more on the revenue growth than the EPS miss.



Risk Analysis
Despite the positive revenue growth, Hotel Properties faces several risks that investors should be aware of. These include:

1. Financial Health: The company's net income has significantly decreased, with a 95% drop from FY 2023 to 2024. This decline in profitability could indicate financial instability or poor management decisions.
2. Profit Margin Decline: The profit margin has dropped from 86% in FY 2023 to 3.9% in 2024, suggesting a significant decrease in operational efficiency or an increase in costs.
3. EPS Decline: Earnings per share (EPS) have fallen from $1.06 in FY 2023 to $0.039 in 2024, indicating a substantial decrease in shareholder value.
4. Missed Earnings Estimates: The company's EPS missed analyst estimates by 80% in 2024, suggesting that the company's financial performance may not meet expectations.

Valuation and Dividend
Hotel Properties' valuation is complex, and investors should consider the potential risks and dividends when making investment decisions. The company's dividend yield and payout ratio should be evaluated to determine if the dividend is sustainable and attractive to income-oriented investors.

Conclusion
Hotel Properties' full year 2024 earnings report shows strong revenue growth but a significant decline in profitability and EPS. While the company's revenue exceeded analyst estimates, the EPS miss and the risks highlighted in the risk analysis section should be carefully considered by investors. The company's valuation and dividend should also be evaluated to determine if the investment is attractive and sustainable. As always, investors should conduct thorough research and consider seeking professional advice before making investment decisions.