- Executes Financing of up to $50 million with an Initial
Tranche of $10 million Expected to be Funded on or around June 27,
2023
- Provides Update on First Quarter 2023 Financial Results,
Showing Improvement in Key Operating Metrics vs First Quarter
2022
- In Second Quarter 2023, initiated a Labor Restructuring Plan
expected to generate annualized payroll savings of $5.8 million and
have a one-time cost impact of approximately $1.0 million
- Transaction and Business Update will be discussed on
Conference Call Scheduled for June 29, 2023
Selina Hospitality PLC ("Selina" or the “Company”), (NASDAQ:
SLNA), the fast-growing lifestyle and experiential hospitality
company targeting millennial and Gen Z travelers, today announced a
business update on its operational performance and capital
structure initiatives.
Executes Financing of Up to $50
Million
Selina has secured agreements for a strategic investment
totaling up to $50 million led by an affiliate of Global University
Systems ("GUS" or the “Investor”), a leading global higher
education platform. This funding is part of the Company’s plan to
strengthen its balance sheet as it continues on its path to
achieving profitability and cash flow positive operations. The
investment by GUS will be completed in multiple tranches as
follows:
- The first tranche comprises an immediate $10.0 million in
funding under a secured convertible debt instrument.
- After securing an additional $20.0 million in PIPE equity or
other funding from parties other than the Investor or any of its
affiliates and satisfying other funding conditions, the Investor
commits to an additional tranche of $10.0 million via a private
investment in public equity (“PIPE”) and an additional $10.0
million in PIPE investment and/or convertible debt.
- The arrangements also provide for an optional third tranche
that includes $20.0 million from the Investor, consisting of PIPE
investment and/or convertible debt, in each case generally on the
same terms as the initial convertible debt and PIPE funding.
- Should all investments be completed, including the additional
$20.0 million in conditional funding required to unlock the second
tranche of investments, Selina will have secured $50-$70 million of
additional capital.
As part of its investment, the Investor will receive warrants to
acquire additional shares in the Company at a premium to the
current trading price, and have the ability to appoint two
directors to Selina’s Board of Directors. These agreements, the
details of which are included within a Report on Form 6-K filed
today with the Securities and Exchange Commission, are part of the
company's wider strategy to strengthen its balance sheet and
continue on its path to profitability.
Rafael Museri, co-founder and Chief Executive Officer of Selina,
said, "Securing this strategic investment from GUS marks a
significant milestone for Selina. This transaction, a result of an
exhaustive review of various alternatives, not only fortifies our
financial standing as we work towards cash flow positivity and
profitability, but also endorses our strategic goals and potential
to create value for our shareholders. Our affiliation with GUS
logically extends our commitment to providing exceptional
experiences to an underserved group: students who learn abroad. As
we work to streamline operations, curtail expenses, and enhance
unit economics, we are grateful for GUS's trust in our vision and
potential. My co-founder Daniel, I, and our investment vehicle
Kibbutz Holding S.a.r.l., stand firmly committed to Selina's
future. As part of this strategic investment, we are personally
guaranteeing Selina’s obligations under the convertible debt
arrangements, reinforced by a corporate guarantee from Kibbutz.
This commitment reflects our unwavering dedication to steer Selina
towards profitability.”
Aaron Etingen, Chief Executive Officer of GUS, expressed his
enthusiasm about the partnership, stating, "As a global leader in
higher education, GUS is proud to collaborate with Selina. Their
inventive approach to hospitality aligns perfectly with our mission
to foster innovative learning environments. Selina's unique blend
of thoughtfully designed accommodations, coworking spaces, wellness
offerings, and immersive local experiences is expected to resonate
with our diverse student base. This includes approximately 100,000
full-time degree students under GUS and the broader community
connected to FutureLearn - Europe’s largest online education
platform - encompassing 18 million students and alumni worldwide.
Recognizing the growing trend of work and study nomads, we see our
collaboration with Selina as a pioneering opportunity to adapt to
these evolving dynamics. This new relationship is not only a
strategic investment for us, but also serves as a hedge against the
shifting educational landscape in face of the growing trend of
digital nomads in the world of work and education. Selina’s
properties, many of which already exude the vibrant atmosphere of
university campuses, are extremely relevant and embody the future
of lifelong learning. We are excited to utilize our expertise to
guide Selina's venture into the fast-growing education and student
infrastructure sector, creating a unique ecosystem for modern
learners. Our vision is to push the boundaries of conventional
education by delivering accessible learning opportunities across
the globe, intertwining travel, education, and the evolving demands
of the modern workforce. We foresee this opportunity broadening the
reach of education and revolutionizing the way people learn, work,
and travel."
Beyond the notable investment, Selina’s strategic alliance with
GUS will help Selina connect with another expansive, dynamic
community. The collaboration between the parties is expected to
help broaden and diversify the customer bases for each company. It
is envisioned that Selina will become an important touchpoint for
the GUS community, providing a comfortable and engaging environment
for learning, work, and travel. This affiliation also opens the
door for GUS to implement educational programs, accommodate
students, and facilitate global study initiatives leveraging
Selina's extensive network of properties.
Q1 2023 Update
Rafael Museri, Co-Founder and Chief Executive Officer, shared:
“Selina's first quarter performance is marked by continued
operational momentum, with significant year-over-year growth in
occupancy rates and considerable advancements in key financial
metrics. As we progress through 2023, Selina continues to focus on
three strategic imperatives: enhancing cash flow, making progress
on our path to profitability, and building our brand. Our approach
includes a focused effort to reduce costs at both the corporate and
unit levels, bolster operational efficiency, and accelerate
achieving our financial goals. In tandem, we are committed to
continuing to work on lease and loan renegotiations and the
restructuring of liabilities. These strategic moves are anticipated
to help improve our cash liquidity and strengthen Selina's
financial position.”
Selina also continues to demonstrate its commitment to a
multi-faceted optimization strategy focused on streamlining
operations, reducing expenses, and improving unit economics. Selina
has enacted a series of initiatives in pursuit of these objectives,
including workforce and labor optimization initiatives and steps to
reduce its leasehold and other liabilities. In parallel, Selina has
been enhancing its food and beverage offerings, with the goal of
improving the guest experience and enhancing profitability of
existing venues.
Museri concluded by saying, "We are taking bold and decisive
steps to position Selina for long-term success. Our commitment to
our unique hospitality model remains strong. We acknowledge the
challenges ahead and are committed to addressing them directly. We
look forward to sharing more updates as we make progress on our
transformation journey."
Q1’23 Highlights
- Total revenue of $54.2 million, an increase of $13.0 million,
or 31.6% compared to first quarter 2022, driven primarily by an
increase in bedspaces from newly opened locations, higher occupancy
rates, and higher total revenue per bedspace.
- On a same-store basis (locations operating for the entire
comparable periods), total revenue increased by 18.1% driven by an
increase in same-store occupancy, from 46.0% to 58.8%, and a 13.3%
increase in same -store TRevPABs from $6,710 to $7,602.
- Occupancy rate was 56.9% in Q1 2023, compared to 45.2% for Q1
2022, an 11.7% 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 bed space was $7,056 in Q1 2023,
compared to $6,825 in Q1 2022, a 3.4% increase, driven by the
increase in occupancy and the growth coming from developed
markets.
- Unit Level Operating Loss improved to $0.9 million in Q1 2023,
compared to $1.2 million loss in Q1 2022, mostly coming from
improvements in Central and South America where Selina benefits
from more mature locations.
- Corporate Overhead as a percentage of revenues was 18.4% in Q1
2023, compared to 21.3% in Q1 2022, driven by a strong focus on
efficiency in country, regional and global functions offset
partially by the incremental costs of becoming a publicly listed
company.
- Adjusted EBITDA1 was $0.4 million in Q1 2023, compared to $1.4
million in Q1 2022, driven by an increase in corporate overhead due
to incremental public company costs, pre-opening expenses, and a
reduction in government grant income, offset by an improvement in
unit level operating loss.
Q1’23 Financial
Summary
Quarter Ended
($ in millions, except properties and
bedspaces data)
March 31,
2023
2022
Percent Change
Revenue
$54.2
$41.2
31.6%
Net Loss
($30.3)
($38.3)
(20.9%)
Adjusted EBITDA1
$0.4
$1.4
(71.4%)
Net Cash Used in Operating Activities
($0.7)
($5.3)
86.8%
Free Cash Flow Before Debt Service1
($12.6)
($14.3)
11.9%
Occupancy Rate
56.9%
45.2%
Properties, End of Period
118
103
14.6%
Bedspaces, end of Period
29,600
24,159
20.5%
Total Annualized Revenue per Bedspace
$7,056
$6,825
3.4%
___________________________
1 Adjusted EBITDA and Free Cash Flow
Before Debt Service are non-IFRS measures. Please see Non-IFRS
Financial Measures section for reconciliation.
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.
New Hotel Openings
- Selina did not open any properties during Q1 2023, ending the
period with 118 properties and 29,600 open bedspaces vs 103
properties and 24,159 open bedspaces at March 31, 2022.
- Selina has begun the selective exit of leases of
underperforming locations, a critical step towards achieving
long-term financial sustainability.
- The closure of five properties in Mexico, US, Greece, Austria,
and Costa Rica, which contributed $2.8 million of the $6.7 million
unit-level operating loss in 2022, 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.
- The Company remains committed to ongoing lease negotiations,
with the goal of reducing $800,000 of cash rent per month.
Cash and Cash Flow
Highlights
- As of March 31, 2023, the Company had total cash and cash
equivalents of $23.2 million.
- Net cash used in operating activities totaled $0.7 million for
Q1 2023, compared to $5.3 million in Q1 2022.
- Free cash flow before debt service (FCF)1 totaled $(12.6)
million for Q1 2023, compared to $(14.3) million in Q1 2022. FCF in
Q1 2022 was positively impacted by an inflow from partner loans of
$11.3 million. Excluding inflows from partner loans and related
capex spend, FCF totaled $(8.5) million in Q1 2023 vs $(16.9)
million in Q1 2022.
- On May 31, 2023, Selina drew $10 million under its $50 million
credit facility with Inter-American Investment Corporation (IDB
Invest). The Company currently has $10.6 million available to draw
under the credit facility, subject to compliance with the draw
requirements, as of May 31, 2023.
Liability Management
On June 23, 2023 the Company, certain subsidiaries of the
Company and YAM at Selina Ops, L.P. (“YAM”) entered into (i) an amendment agreement that
amends and supplements the joint venture arrangements among the
parties pertaining to the development of the Company’s business in
Panama, Costa Rica and Nicaragua, and (ii) an equity subscription
agreement in order to (among other things) equitize approximately
$9.5 million owed to YAM under those joint venture arrangements and
provide for the buy-out of YAM’s interest in the joint venture.
Once fully completed, Selina's “current loan payables” will be
reduced by $10.1 million against the amount shown on its balance
sheet as of March 31, 2023. Those agreements are described in more
detail as part of a separate Report on Form 6-K filed today with
the Securities and Exchange Commission.
2023 Outlook
- For the balance of 2023, Selina will continue to be guided by
three strategic imperatives: driving cash flow, executing a path to
profitability, and building the brand. The Company reaffirms its
previously provided guidance of achieving positive Adjusted EBITDA
and positive operating cash flow for the year, and will prioritize
these objectives over top-line growth. The Company will reassess
its previous guidance on top-line growth (previous: 30-40% revenue
growth for 2023) when it announces its Q2 and H1 2023 results,
after further considering the impact on the Company’s business of
the fundraising transaction and related cost control requirements
as well as the operational initiatives it has commenced
implementing, including lease terminations and organizational
restructuring.
- Despite the Company's operating momentum and progress in
achieving its core objectives, it does not yet generate sufficient
revenue to cover operating expenses as noted in its Annual Report
on Form 20-F for the fiscal year ended December 31, 2022. The
Company's success is contingent on generating profitable operations
in the future and securing additional equity or debt financing in
the near term. Throughout 2023, Selina expects to complete the
fundraising set out in its strategic transaction with Global
University Systems BV ("GUS") and to raise additional funds as
necessary and is exploring other options, including restructuring
certain liabilities and/or selling non-core assets, although the
success of these fundraising efforts cannot be guaranteed.
Conference Call Details
A conference call to discuss Selina’s fundraising transaction,
financial results for the quarter ended March 31, 2023 as well as a
general business update, is scheduled for June 29, 2023:
- Date and Time: June 29, 2023, at 10:00 am Eastern
Time
- Webcast:
https://edge.media-server.com/mmc/p/b7vg899z
- To attend by telephone, please use the information below for
dial-in access.
- Please register for the call. You can register any time
starting now through the call.
- Link to register:
https://edge.media-server.com/mmc/p/b7vg899z
- Registration in advance is encouraged. As part of the
registration process, you can choose to be provided with the
dial-in and PIN or to use the automated “Call Me” feature.
- An accompanying updated investor presentation will be available
online prior to the cal on June 29, 2023 at
https://investors.selina.com/
- A recorded replay of the conference call will be available
after the conclusion of the call and will be available for a period
of time 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.
About Global University Systems
Global University Systems (GUS) is a powerhouse in the global
education sector, boasting a diversified portfolio of institutions
across 12 countries, including the UK, Germany, Canada, Ireland,
India, Israel, and Singapore. Dedicated to providing quality
education, fostering innovation, and promoting international
collaboration, GUS offers an array of flexible study options that
accommodate the unique personal and professional commitments of its
students. These options include online and blended learning through
the FutureLearn platform, Europe’s largest online education
platform with a community of over 18 million students and alumni
worldwide. GUS itself is home to a vibrant and diverse community of
over 100,000 active degree students from 150 nationalities on
average per year. Through its various educational initiatives, GUS
impacts millions of lives each year, and with its extensive
networks, the potential reach is even greater. Their strategic
investment in Selina underscores GUS's commitment to broadening its
influence, fostering environments that seamlessly blend education
and travel, and enriching the lives of a globally dispersed
community of learners and travelers. To learn more, visit
GlobalUniversitySystems.com.
SELINA HOSPITALITY PLC AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
U.S. DOLLARS IN
THOUSANDS
At March 31,
At December 31,
2022
ASSETS
2023 (unaudited)
Current assets
Cash
23,209
47,689
Trade and other receivables, net
11,043
10,543
Inventory
2,437
2,286
Assets held for sale
2,500
2,500
Other assets
19,604
16,681
Total current assets
58,793
79,699
Non-currents assets
Property, equipment and furniture, net
112,809
111,330
Right of use assets
414,805
420,800
Intangible assets, net
6,790
6,424
Goodwill
543
548
Trade and other receivables, net
1,681
1,671
Investment in associates and joint
ventures
3,398
3,336
Non-current financial assets
3,150
3,149
Security deposits
10,858
10,910
Other assets
370
424
Total non-current assets
554,404
558,592
Total assets
613,197
638,291
LIABILITIES AND EQUITY
Current liabilities
Trade payables and other liabilities
(84,417
)
(81,526
)
Loans payable
(36,408
)
(37,678
)
Convertible notes
(7,859
)
(7,914
)
Lease liabilities
(58,882
)
(59,115
)
Derivative financial liabilities
(1,216
)
(1,216
)
Warrants
(1,852
)
(1,481
)
Total current liabilities
(190,634
)
(188,930
)
Non-currents liabilities
Loans payable, net of current portion
(101,086
)
(97,996
)
Convertible notes, net of current
portion
(42,706
)
(39,182
)
Lease liabilities, net of current
portion
(467,062
)
(469,745
)
Deferred tax liability
(325
)
(329
)
Employee payables
(7,302
)
(6,852
)
Total non-current liabilities
(618,481
)
(614,104
)
Total liabilities
(809,115
)
(803,034
)
Equity
Common stock
(489
)
(488
)
Additional paid-in capital
(564,390
)
(563,210
)
Currency translation adjustment
3,226
1,452
Other reserves
799
552
Accumulated deficit
755,408
725,248
Total equity
194,554
163,554
Non-controlling interest
1,364
1,189
Total liabilities and equity
(613,197
)
(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
March 31
2023
2022
Revenue
Rooms
32,335
22,969
Food & beverage
15,047
12,288
Other, net
6,867
5,927
Total revenue
54,249
41,184
Costs and expenses
Cost of sales
(6,773
)
(4,267
)
Payroll and employee expenses
(23,409
)
(21,659
)
Insurance, utilities and other property
maintenance costs
(11,724
)
(8,262
)
Legal, marketing, IT and other operating
expenses
(13,890
)
(10,467
)
Depreciation and amortization
(8,982
)
(7,211
)
Total cost and expenses
(64,778
)
(51,866
)
Loss from operations activity before
impairment and government grants
(10,529
)
(10,682
)
Impairment and write-off of non-current
assets
—
(565
)
Government grants
—
1,241
Loss from operations activity
(10,529
)
(10,006
)
Finance income
2
27
Finance costs
(20,755
)
(28,848
)
Gain on net monetary position
1,252
944
Share of profit / (loss) in associates
—
14
Other non-operating income / (expense),
net
3
(106
)
Loss before income taxes
(30,027
)
(37,975
)
Income tax expense
(306
)
(300
)
Net loss
(30,333
)
(38,275
)
Loss attributable to:
Equity holders of the parent
(30,159
)
(37,886
)
Non-controlling interest
(174
)
(389
)
Earnings per share
Basic and diluted, loss for the year
attributable to equity holders of the parent
$
(0.31
)
$
(0.87
)
SELINA HOSPITALITY PLC AND ITS
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
U.S. DOLLARS IN THOUSANDS
(UNAUDITED)
Three Months Ended
March 31
2023
2022
Cash flow from operating
activities:
Loss for the year
(30,333
)
(38,275
)
Adjustments to reconcile net loss to
operating cash flows:
Depreciation and amortization expense
8,982
7,211
Share-based compensation expense
521
2,234
Share of loss in associates
—
(14
)
Impairment and write off of non-current
assets
—
565
Gain on net monetary position
(1,252
)
(944
)
Finance costs
20,755
28,847
Finance income
(2
)
(27
)
Income tax expense charged
306
300
Changes in working capital
372
(5,202
)
Net cash used in operating
activities
(651
)
(5,305
)
Cash flow from investing
activities:
Investments in financial assets
—
—
Purchases of property, equipment and
furniture
(4,053
)
(8,056
)
Security deposits (paid) / returned
51
(172
)
Purchases of intangible assets
(540
)
(452
)
Proceeds from sales of property, equipment
and furniture
—
—
Acquisition of business, net of cash
acquired
—
—
Net cash used in investing
activities
(4,542
)
(8,680
)
Cash flow from financing
activities:
Proceeds from loans
2,698
23,184
Convertible note proceeds
—
—
Repayment of loans
(2,514
)
(2,060
)
Interest paid
(2,869
)
(2,549
)
Repayment of lease liabilities
(13,775
)
(12,051
)
Exercises of share options
—
—
Costs of equity raise
(200
)
—
Capital contributions
—
—
Net cash provided by financing
activities
(16,660
)
6,524
Effect of changes in exchange rates on
cash & cash equivalents
(2,627
)
—
Change in cash and cash equivalents
during the period
(24,480
)
(7,461
)
Cash and cash equivalents at start of
period
47,689
21,943
Cash and cash equivalents at end of
period
23,209
14,482
Segment Reporting for the
quarter ended March 31, 2023 (unaudited)
(In thousands of US$)
Mexico
South America
North America
Central America
Europe & Africa
Israel
APAC
Operative Locations
Content Brands
Adjustments
Total
Consolidated
Rooms
Revenue
4,740
8,240
3,811
6,400
3,793
3,780
1,973
32,737
—
(402
)
32,335
Gross Operating Profit / (Loss)
2,053
3,728
1,344
3,009
404
207
912
11,657
—
(163
)
11,494
Food &
Beverage
Revenue
3,350
3,563
834
3,955
1,645
1,579
581
15,507
—
(460
)
15,047
Gross Operating Profit / (Loss)
(319
)
82
(337
)
350
(427
)
(246
)
(5
)
(903
)
—
(67
)
(969
)
Other
Revenue
866
957
166
1,916
366
311
290
4,872
2,746
(751
)
6,867
Gross Operating Profit / (Loss)
531
365
148
672
178
207
197
2,299
(310
)
(129
)
1,859
All Selina
products
Revenue
8,956
12,760
4,811
12,271
5,804
5,671
2,844
53,115
2,746
(1,612
)
54,249
Gross Operating Profit / (Loss)
2,265
4,176
1,155
4,031
155
167
1,104
13,053
(310
)
(359
)
12,384
Unit Level EBITDAR
1,988
3,782
650
3,953
(31
)
(158
)
1,122
11,305
(310
)
(359
)
10,637
Rent
(1,838
)
(2,628
)
(2,176
)
(1,270
)
(2,507
)
(1,376
)
(458
)
(12,253
)
—
—
(12,253
)
Unit-Level Operating Profit /
(Loss)
150
1,153
(1,526
)
2,683
(2,538
)
(1,533
)
664
(947
)
(310
)
(359
)
(1,616
)
Rent add-back
12,253
Pre-opening Expenses
(533
)
Corporate Overhead
(9,752
)
Non-Cash compensation expense
(521
)
Non-recurring public company readiness
cost
(1,375
)
Depreciation and amortization
(8,982
)
Finance income / (expense), net
(20,753
)
Non operational income
1,252
Income Tax
(306
)
Net Operating Income/(Loss)
(30,333
)
Segment Reporting for the
quarter ended March 31, 2022 (unaudited) - Re-casted
(In thousands of US$)
Mexico
South America
North America
Central America
Europe & Africa
Israel
APAC
Operative Locations
Content Brands
Adjustments
Total
Consolidated
Rooms
Revenue
4,939
6,081
2,500
5,322
1,843
1,992
162
22,838
—
130
22,969
Gross Operating Profit / (Loss)
2,808
2,128
603
2,287
57
210
(123
)
7,970
—
—
7,970
Food &
Beverage
Revenue
4,281
2,052
1,080
3,564
746
655
16
12,394
—
(106
)
12,288
Gross Operating Profit / (Loss)
365
(187
)
(545
)
124
(258
)
(359
)
(41
)
(900
)
—
—
(900
)
Other
Revenue
474
812
115
1,608
247
201
3
3,460
1,160
1,307
5,927
Gross Operating Profit / (Loss)
239
463
114
501
203
17
3
1,541
569
765
2,875
All Selina
products
Revenue
9,694
8,944
3,694
10,495
2,837
2,848
180
38,692
1,160
1,332
41,184
Gross Operating Profit / (Loss)
3,412
2,405
172
2,913
3
(132
)
(162
)
8,611
569
765
9,945
Unit Level EBITDAR
3,302
2,101
(188
)
2,798
(61
)
(209
)
(175
)
7,569
569
765
8,903
Rent
(1,583
)
(2,414
)
(1,188
)
(993
)
(1,794
)
(767
)
—
(8,739
)
—
—
(8,739
)
Unit-Level Operating Profit /
(Loss)
1,719
(312
)
(1,377
)
1,805
(1,855
)
(976
)
(175
)
(1,170
)
569
765
163
Rent add-back
8,739
Pre-opening Expenses
(408
)
Corporate Overhead
(8,225
)
Non-Cash compensation expense
(3,125
)
Non-recurring public company readiness
cost
(616
)
Depreciation and amortization
(7,211
)
Impairment and write-off of non-current
assets
(565
)
Government grants
1,241
Finance income / (expense), net
(28,821
)
Non operational income
853
Income Tax
(300
)
Net Operating Income/(Loss)
(38,275
)
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, and (v) 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.
Key Metrics
The table below sets forth our key
business metrics for the periods presented:
Three Months Ended
March 31
Metric
2023
2022
Opened properties (at period end)
118
103
Open bedspaces (at period end)
29,600
24,159
Open beds (at period end)
20,217
18,661
Average daily open beds
19,435
16,347
Occupancy rate
56.9
%
45.2
%
Total daily revenue per occupied bed
(TRevPOB)
$
51.8
$
53.3
Total daily revenue per occupied bedspace
(TRevPOBs)
$
34.3
$
41.4
Total revenue per bedspace
$
1,740
$
1,683
Non-IFRS Financial Measures
EBITDA, Adjusted EBITDA and Free Cash
Flow before Debt Service
Three Months Ended March 31
(In millions of US$)
2023
2022
IFRS Net loss
$
(30.3
)
$
(38.3
)
Add (deduct):
Income taxes
$
0.3
$
0.3
Finance income / (expense), net
20.8
28.8
Share listing expense
—
—
Depreciation and amortization
9.0
7.2
EBITDA
$
(0.2
)
$
(2.0
)
Non-operational income, net
(1.3
)
(0.9
)
Impairments
—
0.6
Non-Cash compensation expense
0.5
3.1
Non-recurring public company readiness
costs
1.4
0.6
Provision for tax risks (non-income tax
related)
—
—
Adjusted EBITDA
$
0.4
$
1.4
Three Months Ended March 31,
(In millions of US$)
2023
2022
Net cash used in operating
activities
$
(0.7
)
$
(5.3
)
Add (deduct):
Repayment on lease liabilities
$
(13.8
)
$
(12.1
)
Net cash used in investing activities
(4.5
)
(8.7
)
Non-recurring SPAC transaction related
payments
6.0
0.5
Proceeds from partner loans
0.4
11.3
Free Cash Flow before Debt
Service
$
(12.6
)
$
(14.3
)
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20230627641772/en/
Media: press@selina.com Investor: investors@selina.com
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