Company Results

Hoteles City First Quarter 2014 Revenues Up 29.4%

EBITDA increased 32.0% YoY to $95.7 million, while EBITDA margin expanded by 60 basis points ("bps") to 30.7%. Adjusted EBITDA climbed 30.8% YoY to $99.5 million, while Adjusted EBITDA margin improved by 40 bps to 32.0%.

Hoteles City

Hoteles City Express S.A.B. de C.V. (BMV: HCITY), a leading limited-service hotel chain in Mexico, today announced its financial results for the first quarter ended March 31, 2014 ("1Q14").  These figures were prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican Pesos ("$").

Financial and Operating Highlights (1Q14)

  • Total Revenues grew 29.4% year-over-year ("YoY") to $311.2 million, driven by a 23.9% increase in the number of Occupied Room Nights ("ORN") at the hotel chain level and a 5.2% improvement in Revenue per Available Room ("RevPAR").
  • EBITDA increased 32.0% YoY to $95.7 million, while EBITDA margin expanded by 60 basis points ("bps") to 30.7%. Adjusted EBITDA climbed 30.8% YoY to $99.5 million, while Adjusted EBITDA margin improved by 40 bps to 32.0%.
  • Net Income rose 54.9% YoY to $16.6 million, while Net Income margin widened by 80 bps to 5.3%.
  • At the hotel chain level, Average Occupancy Rate reached 55.2%, with an Average Daily Rate ("ADR") of $714, and RevPAR grew 5.2% YoY to $395. For Established Hotels, Average Occupancy Rate reached 59.7%, with an ADR of $701, and RevPAR grew 5.8% YoY to $419.
  • The number of hotels in operation at the chain level reached 85 at the end of the quarter, an increase of 13 units compared to 72 hotels in operation at the close of 1Q13. The number of rooms in operation at the end of 1Q14 totaled 9,670, 17.9% higher than the 8,201 rooms in operation at the close of the same quarter last year.

 

Financial and Operating Highlights

1Q14

1Q13

1Q14 vs 1Q13

% Variation

Operating Information for the Chain

Number of Hotels at the End of the Period

85

72

18.1%

Number of Rooms at the End of the Period

9,670

8,201

17.9%

Number of Installed Room Nights

846,882

732,429

15.6%

Number of Occupied Room Nights

467,901

377,598

23.9%

Average Occupancy Rate (%)

55.2%

51.6%

ADR ($) 

714

728

-1.9%

RevPAR ($) 

395

375

5.2%

Consolidated Financial Information (thousands of pesos)

Total Revenues

311,151

240,401

29.4%

Operating Profit

45,548

35,546

28.1%

Operating Margin (%)

14.6%

14.8%

Adjusted EBITDA

99,510

76,056

30.8%

Adjusted EBITDA Margin (%)

32.0%

31.6%

EBITDA

95,670

72,480

32.0%

EBITDA Margin (%)

30.7%

30.1%

Net Income

16,644

10,745

54.9%

Net Income Margin (%)

5.3%

4.5%

Adjusted EBITDA = Operating income + depreciation + amortization + non-recurring expenses (pre-opening expenses for new hotels).

Comments from the Chief Executive Officer

Luis Barrios, Chief Executive Officer of Hoteles City, commented:

"Our operating and financial results for the first quarter of 2014 continue to demonstrate rapid growth, as well as solid levels of profitability, which is particularly positive in the context of a Mexican economy that remains anemic.  In the coming months, we anticipate an improvement in the country's main economic indicators, which will provide a positive backdrop for Hoteles City to build on its trend of consistently delivering favorable results.

During the first quarter of 2014, we completed 3 hotels in Mexico. The first two in Ciudad del Carmen under our City junior brand, thus successfully finalizing our 2013 Development Plan.  At the same time, we completed the opening of City express Tehuacan, our fifth hotel in the State of Puebla and the first opening under our 2014 Development Plan. 

Our strong financial and operating performance reflects our innovative business model and focused growth strategy, complemented by a strict emphasis on the management of costs and expenses, resulting in high levels of productivity.  In 1Q14 we achieved year-over-year increases of 29.4% in total revenue and 30.8% in adjusted EBITDA.  Our operating profit margins in the quarter remain robust, reinforcing the virtues of our efficient business model.

In the following months we will continue to drive the profitable growth of Hoteles City, and expect to reach 100 hotels in operation by the end of 2014."

About Hoteles City:

Hoteles City is considered the leading and fastest-growing limited-service hotel chain in Mexico, in terms of number of hotels, number of rooms, geographic presence, market share and revenues.  Founded in 2002, Hoteles City specializes in offering high-quality, comfortable and safe lodging at affordable prices via a limited- service hotel chain geared towards the domestic business traveler.  With 85 hotels in operation located throughout Mexico, Costa Rica and Colombia, Hoteles City operates three distinct brands: City express, City Suites and City junior to serve different segments of its target market. In June 2013, Hoteles City successfully completed its IPO and began trading on the Mexican Stock Exchange under the ticker symbol "HCITY".

HCITY is covered by the following financial institutions and analysts: Bank of America Merrill Lynch (Carlos Peyrelongue), Citigroup (Dan McGoey), Morgan Stanley (Rafael Pinho), Actinver (Pablo Duarte) y J.P. Morgan (Adrian Huerta).



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