Following Friday's guidance cut, MHP released its H1 report yesterday, confirming the picture. In detail:
H1 sales came in at € 99.3m (eNuW: € 98.3m), up 25% yoy. Growth was significantly carried by the new hotels (Conrad and Hyatt Vienna), which added € 17m, implying organic growth of 3.8%. Occupancy came in at 72.0%, ADR at € 219 and RevPAR at € 158. Mind you, the reported rate data is adjusted for Conrad only. The Andaz Vienna was rebranded to Hyatt Regency over Easter, which both disrupted Q2 trading and structurally lowers portfolio ADR, so like-for-like rate erosion is materially smaller than the reported 1% decline suggests.
Margin looks worse than it is. H1 EBITDA of € 0.2m was only slightly behind eNuW of € 0.6m. The H1'25 € 2.3m figure is actually not a good comparable, as it was inflated by € 4.0m Conrad FF&E related one-offs. Hence, there is no cost problem as operating EBITDA improved by € 1.9m yoy.
Slower Conrad ramp-up and Middle East cause guidance cut. While the sales guidance was only slightly cut to € 220-225m (old: c. € 225m), EBITDA was adjusted more significantly from c. € 10m to c. € 8m. The main reason for this is seen to be the Conrad, where occupancy ramp-up is running below budget as flows through the brand systems have not materialized yet. On top of this comes Middle East. Although accounting for only 2.5% of sales (FY25 base), these guests are the usual suite bookers and carry well above-average F&B spend, causing a disproportionate earnings hit. Energy adds to the pressure, not only on pure price but also higher consumption during the summer heat. The implied H2 run-rate of € 7.8m however seems reasonable, in our view, as H2 is seasonally the far stronger half, with events like Oktoberfest and EXPO REAL carrying Q3 and December now among the portfolio's strongest months on Christmas market demand.
Overall, the case is intact, as the cut is largely a timing issue (Conrad), not structural. Besides this, the company remains the leading white-label operator in the DACH premium segment, with privileged access to high-barrier assets that come with limited capital commitment of its own. This allows the platform to add about 1,000 rooms by FY29e without touching the balance sheet. With premium demand structurally unbroken and the Conrad ramp-up a question of when rather than if, the earnings power of the enlarged portfolio should come through from FY27e onwards. At current levels, the market is not at all pricing this.
Changes in estimates reflect the FY26 guidance adjustment as well as a more conservate approach on return to normal from Middle East travellers.
We thus reiterate BUY with a new PT of € 3.50 (old: € 3.70) based on DCF.
ISIN: DE000A3E5C24
