Hoteles City Express Results

Hoteles City Express Announces Results for the 2nd Quarter 2016 with 7.1% Growth in RevPAR and Adjusted EBITDA Margin of 33.6%

At the Chain level, occupancy in 2Q16 came to 62.6%, in line with the same period last year. The Average Daily Rate and Revenue per Available Room showed increases of 7.2% and 7.1% in comparison with 2Q15, coming to $812 and $508, respectively.

Hoteles City Express

Hoteles City Express S.A.B. de C.V. (BMV: HCITY) announced today its results for the second quarter of 2016 ("2Q16"). The figures have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican Pesos ("$").

Financial and Operating Highlights (2Q16)  

  • At the Chain level, occupancy in 2Q16 came to 62.6%, in line with the same period last year. The Average Daily Rate ("ADR") and Revenue per Available Room ("RevPAR") showed increases of 7.2% and 7.1% in comparison with 2Q15, coming to $812 and $508, respectively.  
  • Total Revenues were $497.5 million, which represents a 16.7% year-on-year increase, primarily due to a 10.4% rise in the number of Occupied Room Nights at the Chain level, as well as a 7.1% increase in RevPAR. 
  • Operating Income was $89.6 million in 2Q16, an increase of 10.2% over the same quarter last year. 
  • EBITDA and Adjusted EBITDA were $164.2 million and $167.0 million, respectively, reflecting increases of 13.2% and 13.3% compared with the same period in 2015. EBITDA margin and Adjusted EBITDA margin for the period came to 33.0% and 33.6%, respectively. 
  • Net Income for the period reached $66.6 million. Net Income margin was 13.4% for the quarter. 
  • At the close of the second quarter of 2016, the Chain was operating 109 hotels; an increase of 11 new units compared to the 98 hotels operating at the close of the same period in 2015. The number of rooms in operation in 2Q16 was 12,236, an increase of 10.3% in comparison with the 11,092 at the close of 2Q15.  
  • From June 30, 2016 to the date of this report, the Company has opened two additional hotels: City Express CDMX Alameda and City Express Reynosa Aeropuerto; to reach 111 hotels in operation, with 12,456 available rooms. 

 

 

Operating and Financial Highlights

2Q16

2Q15

2Q16 vs 2Q15

6M16

6M15

6M16 vs 6M15

% Change

% Change

Operating Statistics for the Chain

Number of Hotels at the End of the Period

109

98

11.2%

109

98

11.2%

Number of Rooms at the End of the Period

12,236

11,092

10.3%

12,236

11,092

10.3%

Number of Installed Room Nights

1,109,102

1,004,399

10.4%

2,195,769

1,987,143

10.5%

Number of Occupied Room Nights

694,653

629,322

10.4%

1,339,483

1,190,457

12.5%

Average Occupancy Rate (%)

62.6%

62.7%

-2 bps

61.0%

59.9%

109 bps

ADR($)

812

757

7.2%

811

759

6.8%

RevPAR($)

508

475

7.1%

495

455

8.8%

Consolidated Financial Information (Thousands of Pesos)

Total Revenues

497,482

426,282

16.7%

952,435

802,676

18.7%

Operating Income

89,644

81,365

10.2%

164,204

139,959

17.3%

Operating Income Margin

18.0%

19.1%

-107 bps

17.2%

17.4%

-20 bps

Adjusted EBITDA

166,980

147,362

13.3%

315,535

268,060

17.7%

Adjusted EBITDA Margin (%)

33.6%

34.6%

-100 bps

33.1%

33.4%

-27 bps

EBITDA

164,178

145,034

13.2%

309,036

263,803

17.1%

EBITDA Margin (%)

33.0%

34.0%

-102 bps

32.4%

32.9%

-42 bps

Net Income

66,610

66,373

0.4%

113,825

111,551

2.0%

Net Income Margin (%)

13.4%

15.6%

-218 bps

12.0%

13.9%

-195 bps

Adjusted EBITDA = Operating Income + Depreciation + Non recurring expenses associated with new hotel openings

 

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

"Hoteles City Express key results for the second quarter of 2016 affirm a positive trend, reflected in a 7.1% RevPAR increase, a 16.7% rise in Revenues, and Adjusted EBITDA margin of 33.6%. In this regard, Established Hotels- or those with at least 36 months in operation- reported 68.2% occupancy at the end of the quarter, with growth in ADR and RevPAR of 8.1% and 9.6%, respectively. 

An adequate geographical, industrial and commercial diversification enables us to maintain consistent growth in an economy that is moving in divergent directions across regions. For example, we are achieving record occupancy levels at hotels located in the northern maquila corridor, cities that are state capitals and larger metropolitan markets, with double-digit increases in RevPAR. By contrast, hotels in the Gulf of Mexico and those within the hydrocarbon extraction zone are maintaining occupancy figures below the Chain average. Hotels in large and medium-sized cities, as well as those in state capitals, are seeing significant rises in ADR due to a larger number of consumers seeking high quality accommodation.  

Regarding productivity, Hoteles City Express is maintaining discipline in cost control and expenses. In 2Q16 we achieved an Adjusted EBITDA margin of 33.6%, which reflects the establishment of 11 new hotels in the last twelve months. Towards the end of this year, we will be strengthening our expense control, both in our hotels and operating company, with the aim of profitably absorbing the opening of 12 to 16 new hotels over the remainder of 2016.

Our development plan and new property openings continue on schedule. We currently have 111 hotels in operation, and have achieved our goal for new openings in the first half of the year.  With the support of an extraordinary team that specialize in hotel development, we are maintaining strict oversight over all phases of construction, equipment and opening for new units.  Our goal of having between 123 and 127 hotels by the end of 2016 remains intact.

Everyday we are progressing to position Hoteles City Express's reputation as a first-rate company in the lodging & accommodation industry, characterized by modernity, innovation, warmth and service excellence. At the same time, we are focused on ensuring our robust commercial platform incorporates the latest technology, providing superior service for guests whenever they need us."



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