Crisis for Scandic – refuses to pay rent to homeowners

In the third quarter, the hotel chain Scandic had an occupancy rate of only 36 percent. In the same period last year, occupancy was over 75 percent. Revenue fell by 60 percent; from around 5.2 to 2.1 billion Swedish kroner.

The accounts for the third quarter, which were published on Tuesday morning, also show that the company has received a total of SEK 371 million in state crisis aid.

Thanks to crisis assistance and sharp cost cuts, the company was thus able to deliver a slightly positive operating profit before depreciation (so-called adjusted EBITDA) of SEK 90 million. That is 733 million weaker than in the same period last year.

So far this year, ie from January to the end of September, Scandic’s turnover has been reduced by 57 per cent from SEK 14.1 billion to SEK 6.1 billion. Adjusted ebitda has fallen by almost 2.8 billion Swedish kroner from plus just over 1.55 billion last year to minus 1.22 billion Swedish kroner this year.

Pressures hotel renters – reduces rent payments

If occupancy and revenues were very low in the third quarter, the signals from Scandic are that it will get worse rather than better. In October, occupancy was only 32 percent. And in November, occupancy will be even lower, CEO Mathiesen announced in a web presentation on Tuesday morning, after which the share price of the company fell by more than seven percent to less than 22 kroner; the lowest since the pandemic struck in March-April.

In the stock exchange announcement from the company, CEO Jens Mathiesen writes that “the corona crisis will have consequences for a long time for the hotel industry, and it will take several years before we return to the occupancy levels from before the pandemic”. He also writes that the company is now intensifying negotiations with hotel owners to get agreements that represent what he calls “balanced risk distribution”.

“Some hotels, especially in the big cities, today have a rent that exceeds the hotels’ turnover, which is unreasonable”, he writes and adds that “we are now intensifying negotiations with the hotel tenants and will therefore reduce the rent payments until we have agreed new agreements ».

– We have to get a solution with the homeowners. That is the only way we can go now, because we can not trust that we will get any immediate improvement in the markets. We can also not assume that we get new crisis packages from the authorities, Mathiesen added in the presentation.

The listed hotel real estate company Pandox, with Christian Ringnes and the siblings Christian and Helene Sundt as the largest shareholders, owns a number of hotels that are rented out to Scandic.

– I have understood it so that Scandic will come out of fixed leases and land on the model we have had for many years between the companies with turnover-based agreements with minimum rent, writes Anders Nissen, CEO of Pandox, in a text message to DN Tuesday morning.

Christian Ringnes is chairman of the board of Pandox.

– Scandic has always paid to us in accordance with the agreements we have made with them. I have no signals that they will do anything else in the future and will be very surprised if they do not continue to comply with the agreements with us, Ringnes writes in a text message.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other form of use of all or part of the content, can only take place with written permission or as permitted by law. For further terms see here.