- Second Quarter and First Half of 2023 Financial Results Show
Improvement in Key Operating Metrics Compared to the Same Periods
in 2022
- In the Second Quarter of 2023, Selina initiated a Business
Optimization and Labor Restructuring Plan, which is expected to
generate annualized savings of $5.8 million, after a one time
restructuring cost of approximately $1.0 million
- During Q2 2023, Selina Secured Agreements for and Completed
the First Tranche of Investment, totaling $10 million, under a
Strategic Investment of up to $50 million, and drew $10m under its
$50m credit facility with IDB
- Selina has been actively and aggressively executing a
comprehensive real estate portfolio optimization plan. This ongoing
strategy includes renegotiating all leases through abatements,
deferrals, and terminations to significantly reduce rent and
operational costs
Selina Hospitality PLC ("Selina" or the
“Company”), (NASDAQ: SLNA), the fast-growing lifestyle and
experiential hospitality company targeting millennial and Gen Z
travelers, announced today unaudited financial results for the
second quarter and the first half of 2023.
Rafael Museri, Co-Founder and Chief Executive Officer of Selina,
said, "Selina continues to focus on three key strategic areas:
improving cash flow, advancing toward profitability, and building
our brand. During the second quarter, we made progress in our core
operating metrics, which reflects these strategic objectives.
Through targeted cost-cutting and operational improvements, we
continue to make strides in our Adjusted EBITDA and Operating Cash
Flow. Our recently announced partnership with Global University
Systems (GUS) strengthens our financial standing and extends our
reach to new audiences.”
Q2’23 Highlights
- Total second quarter 2023 revenue of $52.5 million, an increase
of $7.2 million, or 15.9% compared to second quarter 2022, driven
primarily by an increase in bedspaces from newly opened locations,
higher occupancy rates, and higher total revenue per bedspace.
- Occupancy rate was 51.4% in Q2 2023, compared to 45.9% for Q2
2022, a 12.0% increase, driven by improved brand awareness and
brand loyalty, a dedicated regional sales force and commercial
teams, and the continued seasoning of our recently opened
properties.
- Total annualized revenue per bedspace was $6,931 in Q2 2023,
compared to $6,448 in Q2 2022, a 7.5% increase, driven by the
increase in occupancy and the growth coming from developed
markets.
- On a same-store basis (locations operating for the entire
comparable periods), total revenue increased by 6%, driven by an
increase in same-store occupancy and TRevPABs.
- Adjusted EBITDA1 improved to a $0.7 million loss in Q2 2023,
compared to $5.8 million loss in Q2 2022, driven by an increase in
Unit Level EBITDA before Rent (Unit Level EBITDAR2), an improvement
in Content Brands, and a decrease in Corporate Overhead, offset by
an increase in pre-opening expenses.
- Unit Level EBITDAR for Operative Locations increased from $7.4
million in Q2 2022 to $10.0 million in Q2 2023, driven by the
increase in revenues and Gross Operating Profit. Unit level rent,
on the other hand, increased from $9.2 million in Q2 2022 to $13.4
million in Q2 2023.
- Corporate Overhead, as a percentage of revenues, was 17.8% in
Q2 2023, compared to 24.2% in Q2 2022, driven by efficiency in
country, regional and global functions offset partially by the
incremental costs of becoming a publicly listed company.
H1'23 Highlights
- Total H1 2023 revenue of $106.7 million, an increase of $20.3
million, or 23.4% compared to the first half of 2022, driven
primarily by an increase in bedspaces from newly opened locations,
higher occupancy rates, and higher total revenue per bedspace.
- Occupancy rate was 54.1% in H1 2023, compared to 45.5% for H1
2022, a 19.0% increase, driven by improved brand awareness and
brand loyalty, a dedicated regional sales force and commercial
teams, and the continued seasoning of our recently opened
properties.
- Total annualized revenue per bedspace was $7,039 in H1 2023,
compared to $6,466 in H1 2022, a 8.9% increase, driven by the
increase in occupancy and the growth coming from developed
markets.
- On a same-store basis (locations operating for the entire
comparable periods), total revenue increased by 10% driven by an
increase in same-store occupancy and increase in same-store
TRevPABs.
- Adjusted EBITDA1 improved to a $0.3 million loss in H1’23,
compared to $4.4 million loss in H1’22, driven by a significant
increase in Unit Level EBITDA before Rent (Unit Level EBITDAR2) and
an improvement in Content Brands operating performance, offset by
an increase in pre-opening expenses.
- Unit Level EBITDAR for Operative Locations increased from $14.9
million in H1’22 to $21.3 million in H1’23, driven by the increase
in revenues and Gross Operating Profit. Unit level Rent increased
from $17.9 million in H1’22 to $25.5 million in H1’23.
- Corporate Overhead, as a percentage of revenues, was 18.1% in
H1’23, compared to 22.8% in H1’22, driven by efficiency in country,
regional and global functions offset partially by the incremental
costs of becoming a publicly listed company.
Q2’23 Financial
Summary
Three Months Ended
Six Months Ended
June 30,
June 30,
($ in millions, except properties and
bedspaces data)
2023
2022
Percent Change
2023
2022
Percent Change
Revenue
52.5
45.3
15.9
106.7
86.5
23.4
Net Loss
15.8
57.2
(72.5)
46.1
95.5
(51.7)
Adjusted EBITDA1
(0.7)
(5.8)
87.2
(0.3)
(4.4)
93.2
Net Cash Used in Operating Activities
3.4
(5.2)
165.0
2.7
(10.5)
126.0
Free Cash Flow Before Debt Service1
(13.6)
(20.1)
32.4
(26.1)
(34.3)
23.8
Occupancy Rate
51.4%
45.9%
-
54.1%
45.5%
-
Properties, End of Period
114
111
2.7%
114
111
2.7%
Bedspaces, end of Period
28,825
27,415
5.1%
28,825
27,415
5.1%
Total Annualized Revenue per Bedspace
6,931
6,448
7.6%
7,039
6,466
8.9%
______________________________ 1Adjusted EBITDA and Free Cash
Flow Before Debt Service are non-IFRS measures. Please see Non-IFRS
Financial Measures section for reconciliation. 2Unit Level EBITDAR
is a segment performance measure reviewed by the Chief Operating
Decision Maker ("CODM") to make decisions about resources to be
allocated and assess segment performance. Unit Level EBITDAR is
defined as Unit Level earnings before interest, income taxes,
depreciation and amortization and before rent.
Operational Optimization
- During Q2 2023, the Company launched a Labor Restructuring Plan
that is anticipated to impact over 350 full-time employees at the
unit and corporate levels, with expected annual payroll savings of
$5.8 million and a one-time restructuring cost of approximately
$1.0 million. The restructuring is expected to be completed by the
end of Q3 2023.
Hotel Portfolio Activity
- Selina has been actively and aggressively executing a
comprehensive real estate portfolio optimization plan. This ongoing
strategy includes renegotiating all leases through abatements,
deferrals, and terminations to significantly reduce rent and
operational costs. The closure of five properties in Mexico, U.S.,
Greece, Austria, and Costa Rica, which contributed $1.2 million of
the $3.3 million unit-level operating loss in Q2’23, are expected
to be completed by the end of Q3 2023, giving rise to one-time
costs of $0.2 million in estimated early termination
penalties.
- During Q2, Selina opened Dakhla, Morocco. Selina ended the
period with 114 properties and 28,825 open bedspaces versus 111
properties and 27,415 open bedspaces at June 30, 2022.
Cash and Cash Flow
Highlights
- As of June 30, 2023, the Company had total cash and cash
equivalents of $24.6 million.
- Net cash provided by operating activities totaled $3.4 million
for Q2 2023, compared to negative $5.2 million in Q2 2022.
- Free cash flow before debt service (FCF)1 totaled $(13.6)
million for Q2 2023, compared to $(20.1) million in Q2 2022.
- On May 31, 2023, Selina drew $10.0 million under its $50.0
million credit facility with Inter-American Investment Corporation
(IDB). As of August 31, 2023, the Company had $10.6 million
remaining available to draw under the credit facility, subject to
customary draw requirements.
- In June 2023, Selina completed and received the first tranche
of $10.0 million under its strategic investment from GUS, which
totals up to $50.0 million. The second tranche of $20.0 million
from GUS is contingent on the Company raising $20.0 million through
a PIPE capital raise or other equity funding from parties unrelated
to GUS.
Liability Management
- As disclosed in our last Business Update on June 27, 2023,
Selina converted approximately $9.5 million owed to a third party
under various joint venture arrangements to equity to buy out the
third party’s interest in the joint venture. Once fully completed,
Selina’s “loan payables” will be reduced by $10.1 million against
the amount shown on its balance sheet as of June 30, 2023.
2023 Outlook
- For the second half of 2023, Selina will continue to be guided
by the three strategic imperatives we started the year with:
improving cash flow, advancing toward profitability, and building
the brand.
- On June 27, 2023, the Company suspended its revenue guidance
for the year as it reassesses its hotel opening plan for 2023 and
2024, as well as the impact of closed locations in 2023 and
organizational restructuring.
- The Company reaffirms its previously provided guidance of
achieving positive Adjusted EBITDA and positive Operating Cash Flow
for the year. It is noted that the Company's long-term success is
contingent on generating profitable operations in the future and
securing additional equity or debt financing in the near term.
Throughout the second half of 2023, Selina expects to complete the
fundraising set out in its strategic transaction with GUS and to
raise additional funds, although the success of these fundraising
efforts cannot be guaranteed.
- As noted in its Annual Report on Form 20-F for the fiscal year
ended December 31, 2022, despite the Company's operating momentum
and progress in achieving its core objectives, it does not yet
generate sufficient revenue to cover operating expenses.
Investor Presentation
- An accompanying updated investor presentation is available
online at https://investors.selina.com/.
About Selina Hospitality PLC.
Selina (NASDAQ: SLNA) is one of the world’s largest hospitality
brands built to address the needs of millennial and Gen Z
travelers, blending beautifully designed accommodation with
coworking, recreation, wellness, and local experiences. Founded in
2014 and custom-built for today’s nomadic traveler, Selina provides
guests with a global infrastructure to seamlessly travel and work
abroad. Each Selina property is designed in partnership with local
artists, creators, and tastemakers, breathing new life into
existing buildings in interesting locations in 24 countries on six
continents – from urban cities to remote beaches and jungles. To
learn more, visit Selina.com or follow Selina on Twitter,
Instagram, Facebook, Linkedin or YouTube.
SELINA HOSPITALITY PLC AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
U.S. DOLLARS IN
THOUSANDS
At June 30,
At December 31,
2022
2023 (unaudited)
ASSETS
Current assets
Cash
24,568
47,689
Trade and other receivables, net
13,308
10,543
Inventory
2,456
2,286
Assets held for sale
2,500
2,500
Other assets
19,937
16,681
Total current assets
62,769
79,699
Non-currents assets
Property, equipment and furniture, net
113,307
111,330
Right of use assets
392,606
420,800
Intangible assets, net
6,581
6,424
Goodwill
523
548
Trade and other receivables, net
1,630
1,671
Investment in associates and joint
ventures
5,320
3,336
Non-current financial assets
3,151
3,149
Security deposits
9,816
10,910
Other assets
708
424
Total non-current assets
533,642
558,592
Total assets
596,411
638,291
LIABILITIES AND EQUITY
Current liabilities
Trade payables and other liabilities
(92,878
)
(81,526
)
Loans payable
(36,252
)
(37,678
)
Convertible notes
(7,526
)
(7,914
)
Lease liabilities
(55,548
)
(59,115
)
Derivative financial liabilities
(2,356
)
(1,216
)
Warrants
(5,013
)
(1,481
)
Total current liabilities
(199,573
)
(188,930
)
Non-currents liabilities
Loans payable, net of current portion
(111,915
)
(97,996
)
Convertible notes, net of current
portion
(47,218
)
(39,182
)
Lease liabilities, net of current
portion
(441,556
)
(469,745
)
Deferred tax liability
(313
)
(329
)
Employee payables
(8,482
)
(6,852
)
Total non-current liabilities
(609,484
)
(614,104
)
Total liabilities
(809,057
)
(803,034
)
Equity
Common stock
(508
)
(488
)
Additional paid-in capital
(566,634
)
(563,210
)
Currency translation adjustment
6,600
1,452
Other reserves
659
552
Accumulated deficit
771,010
725,248
Total equity
211,127
163,554
Non-controlling interest
1,519
1,189
Total liabilities and equity
(596,411
)
(638,291
)
SELINA HOSPITALITY PLC AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF PROFIT OR LOSS
U.S. DOLLARS IN THOUSANDS,
EXCEPT PER SHARE DATA (UNAUDITED)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Revenue
Rooms
30,898
26,643
63,233
49,612
Food & beverage
14,570
12,413
29,617
24,701
Other, net
7,019
6,237
13,886
12,164
Total revenue
52,487
45,293
106,736
86,477
Costs and expenses
Cost of sales
(6,786
)
(8,303
)
(13,559
)
(12,570
)
Payroll and employee expenses
(23,972
)
(21,813
)
(47,381
)
(43,472
)
Insurance, utilities and other property
maintenance costs
(10,343
)
(5,112
)
(22,067
)
(13,374
)
Legal, marketing, IT and other operating
expenses
(14,410
)
(19,985
)
(28,300
)
(30,452
)
Depreciation and amortization
(9,471
)
(7,538
)
(18,453
)
(14,749
)
Total cost and expenses
(64,982
)
(62,751
)
(129,760
)
(114,617
)
Loss from operations activity before
impairment and government grants
(12,495
)
(17,458
)
(23,024
)
(28,140
)
Impairment and write-off of non-current
assets
(5,390
)
(4,398
)
(5,390
)
(4,398
)
Government grants
74
—
74
1,241
Loss from operations activity
(17,811
)
(21,856
)
(28,340
)
(31,862
)
Finance income
20,702
30
20,704
57
Finance costs
(17,932
)
(35,776
)
(38,687
)
(64,624
)
Gain on net monetary position
(199
)
674
1,053
1,618
Share of profit / (loss) in associates
(78
)
14
(78
)
28
Other non-operating income / (expense),
net
(13
)
23
(10
)
(83
)
Loss before income taxes
(15,331
)
(56,891
)
(45,358
)
(94,866
)
Income tax expense
(427
)
(314
)
(733
)
(614
)
Net loss
(15,758
)
(57,205
)
(46,091
)
(95,480
)
Loss attributable to:
Equity holders of the parent
(15,602
)
(56,922
)
(45,761
)
(94,808
)
Non-controlling interest
(156
)
(283
)
(330
)
(672
)
Earnings per share
Basic and diluted, loss for the year
attributable to equity holders of the parent
$
$
$
$
(0.16
)
(1.31
)
(0.46
)
(2.19
)
SELINA HOSPITALITY PLC AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
U.S. DOLLARS IN THOUSANDS
(UNAUDITED)
Six Months Ended
June 31,
2023
2022
Cash flow from operating
activities:
Loss for the year
(46,091
)
(95,480
)
Adjustments to reconcile net loss to
operating cash flows:
Depreciation and amortization expense
18,453
14,749
Share-based compensation expense
554
4,339
Share of loss in associates
78
(28
)
Impairment and write off of non-current
assets
5,390
4,963
Gain on net monetary position
(1,053
)
(1,618
)
Finance costs
38,687
64,624
Finance income
(20,704
)
(57
)
Income tax expense charged
733
614
Changes in working capital
6,692
(2,625
)
Net cash used in operating
activities
2,739
(10,519
)
Cash flow from investing
activities:
Investments in financial assets
(2,092
)
—
Purchases of property, equipment and
furniture
(5,648
)
(15,581
)
Security deposits (paid) / returned
(651
)
(158
)
Purchases of intangible assets
(613
)
(1,292
)
Proceeds from sales of property, equipment
and furniture
—
—
Acquisition of business, net of cash
acquired
—
—
Net cash used in investing
activities
(9,004
)
(17,031
)
Cash flow from financing
activities:
Proceeds from loans
13,640
50,025
Convertible note proceeds
9,252
—
Repayment of loans
(3,469
)
(8,444
)
Interest paid
(10,023
)
(4,815
)
Repayment of lease liabilities
(27,172
)
(21,552
)
Exercises of share options
—
111
Costs of equity raise
(200
)
—
Capital contributions
1,595
—
Net cash provided by financing
activities
(16,377
)
15,325
Effect of changes in exchange rates on
cash & cash equivalents
(479
)
—
Change in cash and cash equivalents
during the period
(23,121
)
(12,225
)
Cash and cash equivalents at start of
period
47,689
21,943
Cash and cash equivalents at end of
period
24,568
9,718
Segment Reporting for the six
months ended June 30, 2023 (unaudited)
(In thousands of US$)
Mexico
South America
North America
Central America
Europe & Africa
Israel
APAC
Operative Locations
Content Brands
Adjustments
Total
Consolidated
Rooms
Revenue
8,142
14,042
7,959
10,706
10,641
9,689
3,613
64,792
—
(1,560)
63,233
Gross Operating Profit / (Loss)
2,936
5,361
2,687
4,660
2,920
2,216
1,668
22,449
—
65
22,514
Food &
Beverage
Revenue
5,759
6,539
2,038
7,248
4,020
3,890
1,167
30,660
—
(1,043)
29,617
Gross Operating Profit / (Loss)
(462)
(57)
(646)
530
(830)
(479)
(11)
(1,956)
—
143
(1,813)
Other
Revenue
1,604
1,912
476
3,426
822
711
571
9,523
4,770
(407)
13,886
Gross Operating Profit / (Loss)
888
715
449
1,158
324
435
378
4,346
(688)
61
3,720
All Selina
products
Revenue
15,506
22,493
10,473
21,380
15,484
14,290
5,350
104,975
4,770
(3,010)
106,736
Gross Operating Profit / (Loss)
3,363
6,019
2,490
6,347
2,414
2,171
2,035
24,839
(688)
270
24,421
Unit Level EBITDAR
2,974
5,137
1,491
6,141
1,965
1,581
2,057
21,346
(688)
270
20,929
Rent
(3,724)
(5,461)
(4,207)
(2,630)
(5,622)
(3,084)
(877)
(25,605)
—
144
(25,461)
Unit-Level Operating Profit /
(Loss)
(750)
(324)
(2,716)
3,511
(3,657)
(1,503)
1,180
(4,259)
(688)
414
(4,533)
Rent add-back
25,461
Pre-opening Expenses
(2,225)
Corporate Overhead
(18,987)
Non-Cash compensation expense
(734)
Non-recurring public company readiness
cost
(1,490)
New Convertible Note Issuance expense
(1,045)
Restructuring Expenses
(1,018)
Depreciation and amortization
(18,453)
Impairment and write-off of non-current
assets
(5,390)
Government grants
74
Finance income / (expense), net
(17,983)
Non operational income
966
Income Tax
(733)
Net Operating Income/(Loss)
(46,091)
Segment Reporting for the six
months ended June 30, 2022 (unaudited) -Re-casted-
(In thousands of US$)
Mexico
South America
North America
Central America
Europe & Africa
Israel
APAC
Operative Locations
Content Brands
Adjustments
Total
Consolidated
Rooms
Revenue
8,698
11,674
6,490
9,530
5,570
6,295
690
48,947
—
665
49,612
Gross Operating Profit / (Loss)
4,462
3,722
2,208
3,866
1,126
1,397
(104)
16,677
—
—
16,677
Food &
Beverage
Revenue
6,823
4,190
2,745
6,737
1,823
2,451
170
24,939
—
(238)
24,701
Gross Operating Profit / (Loss)
132
(502)
(932)
(4)
(680)
(895)
(139)
(3,021)
—
—
(3,021)
Other
Revenue
1,019
1,833
247
3,106
728
532
4
7,468
4,997
(301)
12,164
Gross Operating Profit / (Loss)
548
1,029
246
932
562
65
3
3,387
(1,340)
—
2,047
All Selina
products
Revenue
16,540
17,697
9,481
19,373
8,121
9,278
863
81,354
4,997
126
86,477
Gross Operating Profit / (Loss)
5,141
4,249
1,522
4,794
1,009
567
(239)
17,043
(1,340)
—
15,703
Unit Level EBITDAR
4,965
3,644
843
4,674
812
312
(302)
14,948
(1,340)
—
13,608
Rent
3,124
4,831
2,757
1,766
3,650
1,755
68
17,952
17,952
Unit-Level Operating Profit /
(Loss)
1,840
(1,187)
(1,913)
2,908
(2,838)
(1,443)
(370)
(3,004)
(1,340)
—
(4,344)
Rent add-back
17,952
Pre-opening Expenses
(734)
Corporate Overhead
(18,553)
Non-Cash compensation expense
(5,480)
Non-recurring public company readiness
cost
(2,231)
Depreciation and amortization
(14,749)
Impairment and write-off of non-current
assets
(4,963)
Government grants
1,241
Finance income / (expense), net
(64,567)
Non operational income
1,563
Income Tax
(614)
Net Operating Income/(Loss)
(95,480)
Segment Reporting for the
three months ended June 30, 2023 (unaudited)
(In thousands of US$)
Mexico
South America
North America
Central America
Europe & Africa
Israel
APAC
Operative Locations
Content Brands
Adjustments
Total
Consolidated
Rooms
Revenue
3,403
5,802
4,148
4,306
6,848
5,909
1,640
32,056
—
(1,158)
30,898
Gross Operating Profit / (Loss)
844
1,632
1,343
1,650
2,516
2,009
756
10,791
—
228
11,019
Food &
Beverage
Revenue
2,409
2,976
1,204
3,293
2,375
2,310
585
15,153
—
(583)
14,570
Gross Operating Profit / (Loss)
(144)
(139)
(309)
180
(403)
(233)
(6)
(1,053)
—
210
(843)
Other
Revenue
738
955
310
1,510
457
401
281
4,651
2,024
343
7,019
Gross Operating Profit / (Loss)
357
350
301
485
145
228
181
2,047
(486)
191
1,752
All Selina
products
Revenue
6,550
9,733
5,662
9,109
9,680
8,620
2,506
51,860
2,024
(1,398)
52,487
Gross Operating Profit / (Loss)
1,097
1,843
1,335
2,316
2,258
2,004
931
11,786
(486)
629
11,929
Unit Level EBITDAR
986
1,355
841
2,188
1,997
1,739
935
10,041
(377)
629
10,293
Rent
(1,886)
(2,832)
(2,031)
(1,360)
(3,115)
(1,708)
(420)
(13,352)
—
144
(13,209)
Unit-Level Operating Profit /
(Loss)
(900)
(1,477)
(1,190)
828
(1,119)
31
515
(3,311)
(377)
773
(2,916)
Rent add-back
13,209
Pre-opening Expenses
(1,693)
Corporate Overhead
(9,234)
Non-Cash compensation expense
(213)
Non-recurring public company readiness
cost
(115)
New Convertible Note Issuance expense
(1,045)
Restructuring Expenses
(1,018)
Depreciation and amortization
(9,471)
Impairment and write-off of non-current
assets
(5,390)
Government grants
74
Finance income / (expense), net
2,770
Non operational income
(290)
Income Tax
(427)
Net Operating Income/(Loss)
(15,758)
Segment Reporting for the
three months ended June 30, 2022 (unaudited) -Re-casted-
(In thousands of US$)
Mexico
South America
North America
Central America
Europe & Africa
Israel
APAC
Operative Locations
Content Brands
Adjustments
Total
Consolidated
Rooms
Revenue
3,759
5,593
3,990
4,208
3,727
4,303
528
26,109
—
534
26,643
Gross Operating Profit / (Loss)
1,654
1,594
1,605
1,579
1,069
1,187
19
8,707
—
—
8,707
Food &
Beverage
Revenue
2,542
2,138
1,665
3,173
1,077
1,796
154
12,545
—
(132)
12,413
Gross Operating Profit / (Loss)
(233)
(316)
(387)
(129)
(423)
(536)
(97)
(2,121)
—
—
(2,121)
Other
Revenue
545
1,021
132
1,498
481
330
1
4,008
3,837
(1,608)
6,237
Gross Operating Profit / (Loss)
309
566
132
431
359
48
1
1,846
(1,909)
(765)
(828)
All Selina
products
Revenue
6,845
8,753
5,787
8,878
5,284
6,430
683
42,661
3,837
(1,206)
45,293
Gross Operating Profit / (Loss)
1,729
1,844
1,349
1,882
1,006
699
(77)
8,432
(1,909)
(765)
5,758
Unit Level EBITDAR
1,663
1,542
1,031
1,876
874
521
(127)
7,379
(1,909)
(765)
4,705
Rent
(1,541)
(2,417)
(1,568)
(773)
(1,856)
(988)
(68)
(9,212)
—
—
(9,212)
Unit-Level Operating Profit /
(Loss)
121
(875)
(537)
1,103
(983)
(468)
(195)
(1,833)
(1,909)
(765)
(4,507)
Rent add-back
9,212
Pre-opening Expenses
(326)
Corporate Overhead
(10,330)
Non-Cash compensation expense
(2,354)
Non-recurring public company readiness
cost
(1,615)
Depreciation and amortization
(7,538)
Impairment and write-off of non-current
assets
(4,398)
Government grants
—
Finance income / (expense), net
(35,746)
Non operational income
711
Income Tax
(314)
Net Operating Income/(Loss)
(57,205)
KEY METRICS AND NON-IFRS FINANCIAL MEASURES
Management uses a number of operating and financial metrics,
including the following key business metrics, to evaluate Selina’s
business, measure Selina’s performance, identify trends affecting
Selina’s business, formulate financial projections and business
plans, and make strategic decisions. Management regularly reviews
and may adjust Selina’s processes for calculating Selina’s internal
metrics to improve their accuracy. This release includes Adjusted
EBITDA and Free Cash Flow Before Debt Service, which are not
prepared in accordance with the international financing reporting
standards issued by IFRS. Management believes that these non-IFRS
financial measures provide useful information to investors about
our business and financial performance, but there are limitations
related to the use of these non-IFRS financial measures and they
may not be directly comparable to similar titled measures of other
companies. These non-IFRS financial measures should be considered
in addition to, and not as a substitute for or superior to,
measures of financial performance prepared in accordance with IFRS
and should not be considered as an alternative to any measures
derived in accordance with IFRS.
- When we report figures on a same-store basis, that
refers to properties operating for the entire comparable
periods.
- We define our occupancy rate as the number of beds sold
divided by the total number of open beds, over any given
period.
- Open beds reflect the total number of beds in inventory
at opened properties at the end of any given period. As our
properties have the ability to convert rooms into different bed
configurations, the total number of open beds may fluctuate at any
given location over any given period.
- Average daily open beds is calculated as the total
number of beds in inventory over any given period of time on a
daily basis. This metric reflects Selina’s daily accommodation
capacity and is used in the calculation of occupancy rate.
- We define TRevPOB as total revenue, excluding Remote
Year revenue, for any given property, for any given period, divided
by the number of beds sold in that same period. This measure
removes the impact of occupancy, as it reflects total revenue on a
per occupied bed basis. Changes in this metric reflect the
variability in our business arising from our ability to change room
and bed configurations based on demand.
- We define TRevPOBs as total revenue, excluding Remote
Year revenue, for any given property, for any given period, divided
by the number of bedspaces sold in that same period. The number of
bedspaces sold is determined by multiplying the occupancy rate for
any given period by the average of the total number of open
bedspaces at the beginning and end of that period. This measure
removes the impact of occupancy, as it reflects total revenue on a
per occupied bedspace basis.
- Total revenue per bedspace is calculated as total
revenue, excluding Remote Year revenue, for any given property, for
any given period, divided by the average of the total number of
open bedspaces at the beginning and end of that period. Management
views total revenue per bedspace as a useful measure of comparing
performance between locations or cohorts over time, as well as
providing an indication of future revenue potential as we continue
to grow total bedspaces.
- The number of open bedspaces reflects the total number
of bedspaces at opened properties at the end of any given period.
Bedspaces is a metric we use to measure the potential sleeping
capacity of a given property. It is a static capacity measure, and
not one reflecting actual capacity in a given period. Every 5.5m2
of accommodation (sleeping room) area in a property equals one
bedspace. Our rooms are designed to be convertible into different
modalities and with distinct bed configurations. We offer
“Standard” accommodations with one double bed, “Twins''
accommodations with two single beds, “Family” accommodations with
space designed to accommodate up to four people, and “Community”
accommodations with space designed to accommodate up to eight
people. At the discretion of property managers, the double bed in a
“Standard'' accommodation can be replaced with a bunk bed for eight
guests, for example. Accordingly, management views the number of
bedspaces, instead of the number of physical beds, as the static
measure of property capacity because it avoids potentially
misleading fluctuations that would arise from the changing room
configurations in any given property.
- EBITDA is defined as IFRS net profit (loss) excluding
impact of income taxes, net interest expense (finance income and
costs), and depreciation and amortization. Adjusted EBITDA
is defined as EBITDA, excluding (i) non-operating income (expense),
such as gain on net monetary position, share of profit/(loss) in
associates, other non-operating income / (expense), and income from
COVID-related concessions, (ii) impairment losses, (iii) non-cash
stock-based compensation expense, (iv) non-recurring public company
readiness costs, (v) new debt issuance expenses, (vi) one-off
restructuring expenses and (vii) provision for tax risks that are
non-income tax related.
- Operating Cash Flow is defined as Net Cash used in
Operating Activities in the IFRS Consolidated Statement of Cash
Flows. Free Cash Flow Before Debt Service is defined as
Operating Cash Flow, minus: (i) repayment on lease liabilities, and
(ii) net cash used in investing activities; plus (iii)
non-recurring SPAC transaction related payments, and (iv) proceeds
from partner loans, to reflect only Selina out-of pocket capital
expenditures.
- Gross Operating Profit / (Loss) is defined as revenue
less the direct expenses related to the sale and operation of
Rooms, F&B and Other; specifically, cost of goods sold, labour
costs, marketing and sales costs, and operating expenses such as
laundry, cleaning, linen, contract services, programming expenses,
operating supplies and equipment (OS&E), utilities, security,
etc.
- Unit Level EBITDAR is defined as unit level earnings
before interest, income taxes, depreciation and amortization and
before rent (or similarly, GOP minus other non-operating unit level
expenses such as property insurance and property taxes).
- Unit-Level Operating Profit / (Loss) is defined as Unit
Level EBITDAR minus Rent Expense. For segment reporting purposes,
and CODM unit level performance assessment purposes, Rent is
treated as an operating expense (meaning not applying IFRS 16 to
leases). Unit level performance metrics do not include (i) non-cash
compensation expense, (ii) impact of corporate overhead costs,
which are reviewed and monitored separately and (iii) pre-opening
expenses (operating costs incurred prior to opening a new
location).
Key Metrics
The table below sets forth our key business metrics for the
periods presented:
Three Months Ended
Six Months Ended
June 30,
June 30,
Metric
2023
2022
2023
2022
Opened properties (at period end)
114
111
114
111
Open bedspaces (at period end)
28,825
27,415
28,825
27,415
Open beds (at period end)
19,663
18,336
19,663
19,277
Average daily open beds
19,917
19,768
19,567
19,022
Occupancy rate
51.4%
45.9%
54.1%
45.5%
Total daily revenue per occupied bed
(TRevPOB)
54.8
50.8
53.2
52
Total daily revenue per occupied bedspace
(TRevPOBs)
37.4
38.9
35.7
38.9
Total revenue per bedspace
1,728
1,608
3,490
3,206
Non-IFRS Financial Measures
EBITDA, Adjusted EBITDA and Free Cash Flow before Debt
Service
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions of US$)
(In millions of US$)
2023
2022
2023
2022
IFRS Net loss
$
(15.8
)
$
(57.2
)
$
(46.1
)
$
(95.5
)
Add (deduct):
Income taxes
$
0.4
$
0.3
$
0.7
$
0.6
Finance income / (expense), net
(2.8
)
35.8
18.0
64.6
Share listing expense
—
—
—
—
Depreciation and amortization
9.5
7.5
18.5
14.7
EBITDA
$
(8.6
)
$
(13.6
)
$
(8.9
)
$
(15.6
)
Non-operational income, net
0.2
(0.7
)
(1.0
)
(1.6
)
Impairments
5.4
4.4
5.4
5.0
Non-Cash compensation expense
0.2
2.4
0.7
5.5
Non-recurring public company readiness
costs
0.1
1.6
1.5
2.2
New Convertible Note Issuance expense
1.0
—
1.0
—
Restructuring Expenses
1.0
—
1.0
—
Provision for tax risks (non-income tax
related)
—
—
—
—
Adjusted EBITDA
$
(0.7
)
$
(5.9
)
$
(0.3
)
$
(4.5
)
Three Months Ended
Six Months Ended
June 30,
June 30,
(In millions of US$)
(In millions of US$)
2023
2022
2023
2022
Net cash used in operating
activities
3.4
(5.2
)
2.7
(10.5
)
Add (deduct):
Repayment on lease liabilities
(13.4
)
(9.5
)
(27.2
)
(21.6
)
Net cash used in investing activities
(4.5
)
(8.4
)
(9.0
)
(17.0
)
Non-recurring SPAC transaction related
payments
0.6
0.9
6.6
1.4
Proceeds from partner loans
0.3
2.1
0.7
13.4
Free Cash Flow before Debt
Service
(13.6
)
(20.1
)
(26.1
)
(34.3
)
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements generally relate to future events, and include terms
such as “may,” “should,” “expect,” “intend,” “will,” “estimate,”
“anticipate,” “believe,” “predict,” “potential,” or “continue,” or
the negatives of these terms or variations of them or similar
terminology. In particular, statements in this press release
regarding our beliefs regarding our goals for our performance and
financial results for the fiscal year ended December 31 2023,
including revenue growth, achieving and sustaining positive
adjusted EBITDA and operating cash flow, the efficiency of our
business model, our expansion plans, our ability to renegotiate
lease terms, our path to profitability, and our ability to obtain
additional funding, restructure liabilities and/or sell assets.
Such forward-looking statements are subject to risks, uncertainties
(some of which are beyond our control), and other factors which
could cause actual results to differ materially from those
expressed or implied by such forward-looking statements. These
forward-looking statements are based upon estimates and assumptions
that, while we consider reasonable, are inherently uncertain.
Factors that may cause actual results to differ materially from
current expectations include, without limitation: potential
negative impacts on our financial results as a result of changes in
travel, hospitality, and real estate markets, including the
possibility that travel demand and pricing do not recover to the
extent anticipated, particularly in the current geopolitical and
macroeconomic environment; volatility in the capital markets; our
ability to execute on our plans to increase occupancy and margins;
the potential inability to meet our obligations under our
commercial arrangements and debt instruments; delays in or
cancellations of our efforts to develop, redevelop, convert or
renovate the properties that we own or lease; challenges to the
legal rights to use certain of our leased hotels; risks associates
with operating a significant portion of our business outside of the
United States; risks that information technology system failures,
delays in the operation of our information technology systems, or
system enhancement failures could reduce our revenues; changes in
applicable laws or regulations, including legal, tax or regulatory
developments, and the impact of any litigation or other legal or
regulatory proceedings; possible delays in ESG and sustainability
initiatives; the possibility that we may be adversely affected by
other economic, business and/or competitive factors, including
risks related to the impact of a world health crisis, such as the
ongoing COVID-19 pandemic,; and other risks and uncertainties
described under the heading “Risk Factors” contained in the Annual
Report on Form 20-F for the fiscal year ended December 31, 2022. In
addition, there may be additional risks that Selina does not
presently know, or that Selina currently believes are immaterial,
that could also cause actual results to differ from those contained
in the forward-looking statements. Nothing in this press release
should be regarded as a representation by any person that the
forward-looking statements set forth herein will be achieved or
that any of the contemplated results of such forward-looking
statements will be achieved. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. Except as may be required by law, we do not undertake any
duty to update these forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230913983468/en/
Media: press@selina.com Investor: investors@selina.com
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