Hoteles City Express Results

Hoteles City Express Reports Q4 2015 7.9% Growth in RevPAR and 20.5% Growth in Adjusted EBITDA

At the Chain level, occupancy in 4Q15 came to 63.9%, 225 basis points higher than the same period of the year before. The Average Daily Rate and Revenue per Available Room showed increases of 4.1% and 7.9% in comparison with 4Q14, coming to $779 and $498, respectively.

Hoteles City Express

Hoteles City Express S.A.B. de C.V. (BMV: HCITY), announced its results yesterday for the fourth quarter ("4Q15") and twelve months ("12M15") of 2015. The figures have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican Pesos ("$").

Financial and Operating Highlights (4Q15)

  • At the Chain level, occupancy in 4Q15 came to 63.9%, 225 basis points ("pbs") higher than the same period of the year before. The Average Daily Rate ("ADR") and Revenue per Available Room ("RevPAR") showed increases of 4.1% and 7.9% in comparison with 4Q14, coming to $779 and $498, respectively. 
  • Total Revenues were $466.3 million, which represents an increase of 18.4% over the same quarter in 2014, mainly due to a rise of 14.8% in the number of Occupied Room Nights at the Chain level, together with growth of 7.9% in RevPAR. 
  • Operating Income was $95.1 million in 4Q15, an increase of 33.1% over the same quarter last year. 
  • EBITDA and Adjusted EBITDA were $152.6 million and $155.5 million, respectively, reflecting increases of 23.4% and 20.5% in comparison with the same period of the previous year. EBITDA margin and Adjusted EBITDA margin for the period came to 32.7% and 33.4%, respectively. 
  • Net Income for the period reached $39.9 million. Net Income Margin came to 8.6% for the quarter. 
  • At the close of the fourth quarter 2015, Hoteles City Express was operating 106 hotels, a gain of 10 new units compared to the 96 hotels operating at the close of the same period in 2014. The number of installed rooms in 4Q15 was 11,944, an increase of 9.3% in comparison with the 10,929 installed rooms at the close of 4Q14. 

Financial and Operating Highlights (12M15)

  • At the Chain level, occupancy during the last twelve months reached 62.0%, with an ADR of $766 and RevPAR of $475, reflecting increases of 4.0% and 9.0%, respectively. 
  • Consolidated Total Revenues as of December 2015 were $1.72 billion, an increase of 21.7% with respect to the same period in 2014. This was due to a 19.1% increase in the number of Occupied Room Nights at the Chain level, a 9.0% increase in RevPAR and growth of 18.2% in revenues from Hotel Management activity. 
  • Operating Income came to $320.4 million during 2015, an increase of 28.0% over 2014. 
  • EBITDA and Adjusted EBITDA reached $572.6 million and $581.7 million, representing growth of 25.2% and 23.5%, respectively, compared to the close of 2014. EBITDA and Adjusted EBITDA Margins came to 33.3% and 33.9% respectively. 
  • Net Income for the period rose to $208.8 million, an increase of 46.2% over 2014. Net Income Margin was 12.1% at the close of 2015.

 

Operating and Financial Highlights

4Q15

4Q14

4Q15 vs 4Q14

12M15

12M14

12M15 vs 12M14

% Change

% Change

Operating Statistics for the Chain

Number of Hotels at the End of the Period

106

96

10.4%

106

96

10.4%

Number of Rooms at the End of the Period

11,944

10,929

9.3%

11,944

10,929

9.3%

Number of Installed Room Nights

1,051,241

949,161

10.8%

4,077,026

3,585,874

13.7%

Number of Occupied Room Nights

671,554

584,944

14.8%

2,526,359

2,120,413

19.1%

Average Occupancy Rate (%)

63.9%

61.6%

225 bps

62.0%

59.1%

283 bps

ADR($)

779

748

4.1%

766

737

4.0%

RevPAR($)

498

461

7.9%

475

436

9.0%

Consolidated Financial Information (Thousands of Pesos)

Total Revenues

466,266

393,947

18.4%

1,718,311

1,412,423

21.7%

Operating Income

95,132

71,497

33.1%

320,371

250,224

28.0%

Operating Income Margin

20.4%

18.1%

225 bps

18.6%

17.7%

93 bps

Adjusted EBITDA

155,511

129,053

20.5%

581,741

471,010

23.5%

Adjusted EBITDA Margin (%)

33.4%

32.8%

59 bps

33.9%

33.3%

51 bps

EBITDA

152,562

123,607

23.4%

572,578

457,218

25.2%

EBITDA Margin (%)

32.7%

31.4%

134 bps

33.3%

32.4%

95 bps

Net Income

39,889

48,539

-17.8%

208,750

142,744

46.2%

Net Income Margin (%)

8.6%

12.3%

-377 bps

12.1%

10.1%

204 bps

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

 

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

"During the fourth quarter and throughout 2015, Hoteles City Express achieved solid improvement across key profitability metrics.

While the outlook for the Mexican economy is mixed, demand indicators for the tourism sector remain robust. In particular, both domestic air travel as well as hotel activity in the most important markets where we operate continue to register record growth. Furthermore, commercial and manufacturing activity continues to expand throughout the country. 

We continue to increase chain productivity, recording strong results in ADR and RevPAR, with annual increases of 4.0% and 9.0%, respectively. Over the year to December 31, 2105, we achieved growth of 19.1% in the number of Occupied Room Nights, reflecting strong brand positioning, the Company's commercial acumen, and the increase of our market share.  Regarding financial performance, we increased Total Revenues by 21.7% during the year, with growth in adjusted EBITDA and Net Income of 23.5% and 46.2%, respectively. 

The execution of our marketing strategy and investment in our e-commerce platforms are beginning to produce results, enabling us to increase reservations generated through our own channels.

In 2015, we opened 10 new hotels in high growth markets, bringing the total number of hotels in operation to 106. While the development of new hotels is progressing well, the procurement of permits and licenses continues to delay construction starts. We have made adjustments in our structure to ensure tighter oversight of projects and thus mitigate potential delays.  Overall, we hope to have approximately 125 hotels, and more than 14,300 rooms in operation by the end of the year.

This year we will remain focused on consolidating our position as the leading limited service chain in Mexico. Furthermore, we are continuing to increase our exposure in the country's major cities, diversifying our investments through industries and regions.  Looking ahead, we are confident that our operating discipline, supported by attractive demand dynamics, will allow us to continue achieving profitable growth in 2016.

We are proud of our results for 2015, which underscores our strong competitive position and encourage us to continue being an alternative for profitable growth."

 



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