HWORLD(HTHT) - 2024 Q3 - Quarterly Report

Hotel Operations - As of September 30, 2024, H World Group operated a total of 10,845 hotels and 1,062,546 hotel rooms[5] - H World operated 10,845 hotels with 1,062,546 rooms in 18 countries as of September 30, 2024[49] - The total number of hotels as of September 30, 2024, was 10,707, with 2,899 hotels in the pipeline[70] - The number of manachised and franchised hotels increased to 10,137 as of September 30, 2024, with a net addition of 579 hotels in Q3 2024[68] - There are 2,925 hotels in the pipeline, indicating significant future growth potential[77] - The economy hotel segment includes 5,461 operational hotels with 449,937 rooms and 1,091 in the pipeline[77] - The midscale hotel segment has 4,344 operational hotels with 465,743 rooms and 1,238 in the pipeline[77] - The upper midscale hotel segment consists of 866 operational hotels with 119,356 rooms and 493 in the pipeline[77] - The upscale hotel segment includes 147 operational hotels with 21,693 rooms and 95 in the pipeline[77] - The luxury hotel segment has 16 operational hotels with 2,368 rooms and 3 in the pipeline[77] - In China, there are 33 operational IntercityHotels and 92 in the pipeline as of September 30, 2024[78] - MAXX has 5 operational hotels and 5 in the pipeline in China as of September 30, 2024[78] - Steigenberger Hotels & Resorts has 12 operational hotels and 5 in the pipeline in China as of September 30, 2024[78] Financial Performance - Revenue for Q3 2024 was RMB6.4 billion (US$918 million), a 2.4$ 918 million), an increase from RMB 6,288 million in Q3 2023[60] - Net income attributable to H World Group Limited for Q3 2024 was RMB 1,273 million (US$181 million), compared to RMB 1,337 million in Q3 2023[60] - Net income attributable to H World was RMB1.3 billion (US$181 million) in Q3 2024, unchanged from Q3 2023[3] - Income from operations in Q3 2024 was RMB1.7 billion (US$245 million), a decrease from RMB1.9 billion in Q3 2023, with the Legacy-DH segment reporting a loss of RMB40 million due to one-off restructuring costs[23] - Operating margin in Q3 2024 was 26.7$286 million), compared to RMB2.1 billion in Q3 2023[29] - Adjusted EBITDA for the Legacy-Huazhu segment was RMB2.1 billion in Q3 2024, down from RMB2.3 billion in Q3 2023[7] - Adjusted EBITDA (non-GAAP) in Q3 2024 was RMB2.1 billion (US$300 million), down from RMB2.3 billion in Q3 2023[31] - The company reported a net cash provided by operating activities of RMB 1,693 million (US$ 242 million) for Q3 2024[63] - H World incurred capital expenditures of RMB 209 million (US$30 million) in Q3 2024[63] Cash and Debt Management - As of September 30, 2024, the total balance of cash and cash equivalents was RMB7.2 billion (US$1.0 billion) with total debt of RMB5.4 billion (US$769 million)[34] - Cash and cash equivalents increased to RMB 7,247 million (US$ 1,033 million) as of September 30, 2024, from RMB 6,946 million at the end of 2023[56] - Total liabilities decreased to RMB 49,823 million (US$7,100 million) as of September 30, 2024, from RMB 51,283 million at the end of 2023[56] - H World’s total current liabilities decreased to RMB 12,408 million (US$ 1,768 million) as of September 30, 2024, from RMB 17,411 million at the end of 2023[56] - Operating cash inflow in Q3 2024 was RMB1.7 billion (US$242 million), while financing cash outflow was RMB2.1 billion (US$300 million), including RMB1.4 billion in dividends paid[33] Future Outlook - H World expects revenue growth for Q4 2024 to be in the range of 1%-5% compared to Q4 2023[7] - For Q4 2024, H World expects revenue growth of 1%-5% compared to Q4 2023, excluding the Legacy-DH segment[35] Key Metrics - The average daily rate (ADR) for Legacy-Huazhu hotels was RMB301 in Q3 2024, down from RMB324 in Q3 2023[8] - The occupancy rate for all Legacy-Huazhu hotels was 84.9% in Q3 2024, compared to 85.9% in Q3 2023[8] - The average daily room rate (ADR) for leased and owned hotels decreased by 6.0% year-over-year to RMB 406 in Q3 2023[71] - The occupancy rate for leased and owned hotels was 87.8% in Q3 2023, a slight decrease of 0.3 percentage points from the previous year[71] - The company’s basic earnings per share for Q3 2024 was RMB 0.41 (US$ 0.06), compared to RMB 0.42 in Q3 2023[60] - Adjusted earnings per share (diluted) for Q3 2023 was RMB 0.47, compared to RMB 0.43 in Q3 2024[65]