Hoteles City Express Results

Hoteles City Express 4th Quarter 2014 Total Revenues Up 28.7%

otal revenues reached $393.9 million, an increase of 28.7% over the same period in 2013, mainly due to a 27.9% rise in the number of Occupied Room Nights at the Chain level, combined with growth of 12.3% in Revenue per Available Room .

Hoteles City Express

Hoteles City Express S.A.B. de C.V. (BMV: HCITY), announced yesterday its results for the 4th quarter ("4Q14") and twelve months ("12M14") of 2014.  These figures were prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican Pesos ("$").

Financial and Operating Highlights (4Q14)

  • Total revenues reached $393.9 million, an increase of 28.7% over the same period in 2013, mainly due to a 27.9% rise in the number of Occupied Room Nights at the Chain level, combined with growth of 12.3% in Revenue per Available Room ("RevPAR").
  • Operating Income rose 45.8% to $71.5 million over the prior corresponding quarter.
  • EBITDA and Adjusted EBITDA reached $123.6 million and $129.1 million respectively, representing increases of 25.7% and 20.9% over the same period in 2013. EBITDA margin and Adjusted EBITDA margin were 31.4% and 32.8%, respectively.
  • Net Income for the period rose to $48.5 million, an increase of 72.8% over the fourth quarter of 2013. Net Income Margin came to 12.3% for the quarter.
  • At the Chain level, occupancy for 4Q14 reached 61.6%, 403 basis points ("bps") higher than the same period a year earlier. Average Daily Rate ("ADR") and RevPAR grew 5.0% and 12.3%, reaching $748 and $461 respectively.
  • At the close of the quarter the Chain was operating 96 hotels, a gain of 14 new units from the end of 2013. The number of rooms in operation in 4Q14 came to 10,929, a gain of 17.2% from 9,326 rooms a year earlier.

Financial and Operating Highlights (12M14)                                                         

  • Total Revenues for the twelve-months ending on December 2014 came to $1,412.4 million, representing an increase of 27.9% over the same period in 2013. This was due to a 26.6% increase in the number of Occupied Room Nights at Chain level, the 9.6% gain in RevPAR, and expansion of 35.2% in Hotel Management activities. 
  • Operating profit grew 40.1% to $250.2 million for 2014 over the prior year. 
  • EBITDA and Adjusted EBITDA came to $457.2 million and $471.0 million, or growth of 33.6% and 31.5% respectively, from the close of 2013. EBITDA and Adjusted EBITDA margins came to 32.4% and 33.3%. 
  • Net Income for the period was $142.7 million, representing a gain of 70.5% on full year 2013. Net Income Margin was 10.1% at the close of 2014. 
  • At the Chain level, occupancy for the year closed at 59.1%, with an ADR of $737 and RevPAR of $436, reflecting gains of 2.1% and 9.6%, respectively.

Operating and Financial Highlights

4Q14

4Q13

4Q14 vs 4Q13

12M14

12M13

12M14 vs 12M13

% Change

% Change

Operating Statistics for the Chain

Number of Hotels at the End of the Period

96

82

17.1%

96

82

17.1%

Number of Rooms at the End of the Period

10,929

9,326

17.2%

10,929

9,326

17.2%

Number of Installed Room Nights

949,161

794,114

19.5%

3,585,874

3,040,485

17.9%

Number of Occupied Room Nights

584,944

457,397

27.9%

2,120,413

1,675,426

26.6%

Average Occupancy Rate (%)

61.6%

57.6%

403 pbs

59.1%

55.1%

403 pbs

ADR ($) 

748

713

5.0%

737

722

2.1%

RevPAR ($) 

461

411

12.3%

436

398

9.6%

Consolidated Financial Information (thousands of pesos)

Total Revenues

393,947

306,179

28.7%

1,412,423

1,103,956

27.9%

Operating Profit

71,497

49,043

45.8%

250,224

178,566

40.1%

Operating Margin (%)

18.1%

16.0%

213 pbs

17.7%

16.2%

154 pbs

Adjusted EBITDA

129,053

106,772

20.9%

471,010

358,196

31.5%

Adjusted EBITDA Margin (%)

32.8%

34.9%

-211 pbs

33.3%

32.4%

90 pbs

EBITDA

123,607

98,311

25.7%

457,218

342,229

33.6%

EBITDA Margin (%)

31.4%

32.1%

-73 pbs

32.4%

31.0%

137 pbs

Net Income

48,539

28,090

72.8%

142,744

83,733

70.5%

Net Income Margin (%)

12.3%

9.2%

315 pbs

10.1%

7.6%

252 pbs

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

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

"We announce our results for the 4th quarter and full year 2014, which show solid performance both on a quarterly basis and over the past 12 months.  In a year of moderate economic growth, Hoteles City Express achieved the best operating, financial and development results in its history.

In 2014 we continued with profitable growth, opening 14 hotels during the year to reach a total of 96 hotels in operation at the end of December. Hoteles City Express continues to be the industry leader in terms of number of new hotel openings per year, and is consolidating its preeminence in the limited services segment. Over the course of 2014, we remained concentrated in Mexico, extending our presence in markets with high growth potential that offer attractive investment dynamics. We also maintained our plans with respect to the international expansion effort, starting construction of one hotel both in Colombia and in Chile.

With respect to our operating results, these reflected a productive commercial strategy throughout the year. We achieved important growth rates across our key indicators of occupancy, ADR and RevPAR, registering an annual increase of 9.6% in the latter. In the case of our financial indicators, in 2014, Hoteles City Express reached a 27.9% growth in Total Revenues, 31.5% growth in Adjusted EBITDA and 70.5% in Net Income.

In October 2014, we successfully executed a Follow-on Offering for a total amount of $2,577.9 million pesos. The net resources of this offering will enable us to proceed with our expansion plan, consolidate our business in a highly fragmented industry segment, and increase our market share. 

During 2015, we will continue to expand our commercial and selling capabilities. At the same time, we will take advantage of our scale in order to achieve incremental profitability from our investments, expanding simultaneously the size of the chain with the opening of 18 to 20 new hotels.

With the ongoing efforts of our team at Hoteles City Express, 2015 should be a year in which we further expand our leadership in the limited services hotel segment." 

About Hoteles City Express:

Hoteles City Express 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 Express specializes in offering high-quality, comfortable and safe lodging at affordable prices via a limited-service hotel chain geared mainly towards domestic business travelers. With 96 hotels in operation located throughout Mexico, Costa Rica and Colombia, Hoteles City Express operates four distinct brands: City Express, City Express Plus, City Express Suites and City Express Junior to serve different segments of its target market. In June 2013, Hoteles City Express completed its IPO and began trading on the Mexican Stock Exchange under the ticker symbol "HCITY;" furthermore, on October 8, 2014, Hoteles City Express completed a subsequent public offering of stock with the aim of accelerating its growth in new hotels in coming years.

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), Vector Analisis (Marco Montanez) and Santander (Pedro Balcao)



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