Hilton Grand Vacations reports strong Q3 results

Hilton Grand Vacations Inc has reported strong third-quarter results, with contract sales up by almost 12 per cent and net owner growth of 7.4 per cent.

Highlights of the results include:

• Diluted EPS was $0.42 and net income was $41 million for the third quarter.
• Adjusted EBITDA was $80 million for the third quarter.
• Total revenues were $427 million for the third quarter.
• Contract sales for the third quarter increased 11.7% from the same period in 2017.
• Net Owner Growth (NOG) for the 12 months ending 30 September 2018, was 7.4%.
  • Acquired a site in the Waikiki area of Honolulu, Hawaii, to develop 191-unit timeshare resort, which is the company’s sixth resort in the Oahu market.
• Acquired timeshare inventory at the Crane Resort in Barbados, the company’s first resort offering in the Caribbean.
• Completed $350 million timeshare securitization transaction at overall weighted average interest rate of 3.6%.
• Completed construction of Phase I of Ocean Tower in early October 2018.
• The company will host an investor day in New York City on 4 December 2018.
• Under ASC 606, deferrals related to Ocean Tower decreased third-quarter reported revenues and operating expenses compared to the previous accounting guidance. Under the previous accounting guidance, third quarter revenue, net income and adjusted EBITDA increased 13.4%, 44.2% and 13.8% respectively from the same period in 2017.

Overview

For the three months ended 30 September 2018, diluted EPS was $0.42 compared to $0.43 for the three months ended 30 September 2017. Net income was $41 million for the three months ended 30 September 2018, compared to $43 million for the three months ended 30 September 2017, and adjusted EBITDA was $80 million for the three months ended 30 September 2018, compared to $94 million for the three months ended 30 September 2017.

Total revenues for the three months ended 30 September 2018, were $427 million, compared to $426 million for the three months ended 30 September 2017.

Adoption of ASC 606 decreased revenue for the three months ended 30 September 2018, by $56 million compared to the previous accounting guidance. The comparable decrease was $21 million to net income, $0.21 per diluted share to EPS and $27 million to adjusted EBITDA.

Mark Wang, president and CEO, Hilton Grand Vacations, said: “We continue to lead the industry with year-to-date contract sales growth of 12.2%. By focusing on our customers and investing in their experiences, we delivered 7.4% net owner growth. The outstanding execution of our team members drove revenue growth across the business and adjusted EBITDA, excluding deferrals, increased 14%.

“Our club members were excited to hear about our first project in the Caribbean and our sixth project in Waikiki, and we are more enthusiastic than ever about the growth opportunities ahead. We’re looking forward to investor day in December when we will share more on the strength and sustainability of HGV’s business model and our ability to create long-term value for our shareholders.”