Hoteles City Express Results

Hoteles City Express Reports ADR Growth of 18.0% and Operating Income Increase of 47.4% for 1st Quarter 2017

At the Chain level, ADR and RevPAR increased by 18.0% and 10.6% in comparison with 1Q16, to $957 and $532, respectively. Chain occupancy in 1Q17 was 55.6%.

Hoteles City Express

Hoteles City Express S.A.B. de C.V. (BMV: HCITY), announced today its results for the first quarter.  The figures have been prepared in accordance with International Financial Reporting Standards and are presented in Mexican Pesos.

Financial and Operating Highlights (1Q17)

  • At the Chain level, Average Daily Rate ("ADR") and Revenue per Available Room ("RevPAR") increased by 18.0% and 10.6% in comparison with 1Q16, to $957 and $532, respectively. Chain occupancy in 1Q17 was 55.6%. 

  • Total Revenues were $571.3 million, which represents a 25.6% increase with respect to the same quarter in 2016, primarily due to a 14.2% increase in the number of Installed Room Nights at the Chain level, as well as a 10.6% increase in RevPAR. 

  • Operating income was $109.9 million in 1Q17, an increase of 47.4% over the same quarter the year before. 

  • EBITDA and Adjusted EBITDA were $193.8 million and $196.1 million, respectively, reflecting year on year increases of 33.8% and 32.0%. EBITDA margin and Adjusted EBITDA margin for the period came to 33.9% and 34.3%, respectively. 

  • Net Income for the period reached $38.4 million. Net Income margin was 6.7% for the quarter.

  • At the close of the quarter, the Chain was operating 124 hotels; an increase of 18 new units compared to the 106 hotels operating at the close of the same period in 2016. The number of rooms in operation in 1Q17 was 13,829, an increase of 15.8% in comparison with the 11,944 at the close of 1Q16.

 

Operating and Financial Highlights

1Q17

1Q16

1Q17 vs 1Q16

% Change

Operating Statistics for the Chain

Number of Hotels at the End of the Period

124

106

17.0%

Number of Rooms at the End of the Period

13,829

11,944

15.8%

Number of Installed Room Nights

1,240,857

1,086,667

14.2%

Number of Occupied Room Nights

690,076

644,830

7.0%

Average Occupancy Rate (%)

55.6%

59.3%

-373 bps

ADR($)

957

811

18.0%

RevPAR($)

532

481

10.6%

Consolidated Financial Information (Thousands of Pesos)

Total Revenues

571,308

454,953

25.6%

Operating Income

109,870

74,560

47.4%

Operating Income Margin

19.2%

16.4%

284 bps

Adjusted EBITDA

196,076

148,556

32.0%

Adjusted EBITDA Margin (%)

34.3%

32.7%

167 bps

EBITDA

193,761

144,859

33.8%

EBITDA Margin (%)

33.9%

31.8%

207 bps

Net Income

38,417

47,213

-18.6%

Net Income Margin (%)

6.7%

10.4%

-365 bps

Adjusted EBITDA= Operating income + depreciation+ amortization + non-recurring costs (expenses associated with new hotel openings).

Comments by Luis Barrios, Chief Executive Officer of Hoteles City Express:

"Our first quarter 2017 results reflect standout performance for Hoteles City Express across all aspects of the business.

In this quarter, macroeconomic uncertainty was offset by strong key demand generators in Mexico, especially consumption, exports, services and industry. In an economic landscape positively shaped by historically low unemployment, consistently growing salary mass and a solid base for gross fixed investment, our hotel inventory is reaping the benefits of diversification across all industries and geographies. 

That said, in trying to absorb the impact of higher inflation and boost productivity at the asset level, we continued to push ADR growth. During the first quarter, ADR increased 18.0% and RevPAR posted an impressive 10.6% growth. We are selling a larger inventory of rooms at a significantly higher rate.

It is worth noting that the Company's priority remains maximizing our RevPAR for as long as we see robust market dynamics across the Chain's portfolio. This reflects the Company's commitment to boost the productivity of its asset base, resulting in strong revenue and productivity growth with less intensive room use.

Turning to our financial performance, our results demonstrate strong and profitable growth, with a 26% rise in Total Revenues and 47% growth in Operating Income. Adjusted EBITDA margin recorded its highest level for comparable periods since our IPO, reaching 34.3% as the Company's scaling efforts start to unfold. Notably, results from our Operating Company again show the relevance of its business, posting an attractive 40% growth in revenues before intercompany consolidation.

Our state-of-the-art digital marketing, distribution and room operation platform continues to bolster the Company's returns. A first-class user experience for each one of our guests, double-digit increases in rates, and margins above 30% are just the some of the benefits from our investments on this front. Now more than ever, we are committed to a process-geared organization that allow us to generate bottom-up innovation.

Regarding our 2017 development plan, we are on track with all projects. Our cost discipline and expertise in the development process will see us have 140 hotels in operation within the next twelve months, as we apply our cash balance to ramp up the utilization of our landbank. In terms of our international properties, our hotel in Medellín is due to open toward the end of the year. 

Looking ahead, we will work hard to ensure that our impressive first quarter results mark the start of another record year for Hoteles City Express."



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