MEXICO CITY, July 17, 2019 /PRNewswire/ -- Hoteles City Express S.A.B. de C.V. (BMV: HCITY) ("Hoteles City Express" or the "Company"), presents its results for the second quarter of 2019 ("2Q19").  All accounting figures have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican pesos ("$").

Summary of Relevant Operating and Financial Information (2Q19)

  • At the Chain level, the Average Daily Rate ("ADR") increased 4.4% and Revenue per Available Room ("RevPar") increased 2.6% versus 2Q18, to $1,012 and $592, respectively. The Chain's occupancy in 2Q19 was 58.5%.
  • Total Revenues were $804.9 million, a 13.6% increase compared to the same quarter in 2018, due mainly to an increase in the number of Installed Room Nights at the Chain level and to ADR growth.
  • Operating Income was $141.3 million in 2Q19, a year-over-year decrease of 1.0%. The latter is mainly explained by the absorption of the increase in room inventory coupled with an increase in depreciation expense as a result of the adjustments corresponding to IFRS 16.
  • EBITDA and Adjusted EBITDA were $255.1 million and $257.0 million, respectively. EBITDA and Adjusted EBIDTA margins during the period were 31.7% and 31.9%, respectively.
  • Net Income for the period was $22.7 million.
  • At quarter end, the Chain was operating 152 hotels, an increase of 13 new units compared to the 139 hotels that were operating at the close of the same period in 2018. The number of rooms in operation at the close of 2Q19 was 17,226, an increase of 9.8% versus the 15,691 rooms operating at the close of 2Q18.

 

Operating and Financial Highlights

2Q19

2Q18

2Q19 vs 2Q18

6M19

6M18

6M19 vs 6M18

% Change

% Change









Operating Statistics for the Chain
















Number of Hotels at the End of the Period

152

139

9.4%

9.4%

152

139

9.4%

Number of Rooms at the End of the Period

17,226

15,691

9.8%

9.8%

17,226

15,691

9.8%









Number of Installed Room Nights

1,568,479

1,413,978

10.9%

10.9%

3,088,002

2,792,804

10.6%

Number of Occupied Room Nights

917,198

840,794

9.1%

9.1%

1,727,770

1,644,596

5.1%









Average Occupancy Rate (%)

58.5%

59.5%

-99 pbs

-99 bps

56.0%

58.9%

-294 bps

ADR($)

1,012

969

4.4%

4.4%

1,014

973

4.2%

RevPAR($)

592

576

2.6%

2.6%

567

573

-1.0%









Consolidated Financial Information (Thousands of Pesos)















Total Revenues

804,873

708,759

13.6%

13.6%

1,521,907

1,394,881

9.1%









Operating Income

141,336

142,767

-1.0%

-1.0%

249,492

285,223

-12.5%

Operating Income Margin

17.6%

20.1%

-258 pbs

-258 bps

16.4%

20.4%

-405 bps









Adjusted EBITDA

257,039

235,519

9.1%

9.1%

476,530

476,515

0.0%

Adjusted EBITDA Margin (%)

31.9%

33.2%

-129 pbs

-129 bps

31.3%

34.2%

-285 bps









EBITDA

255,123

236,261

8.0%

8.0%

471,236

473,114

-0.4%

EBITDA Margin (%)

31.7%

33.3%

-164 pbs

-164 bps

31.0%

33.9%

-295 bps









Net Income

22,686

69,090

-67.2%

-67.2%

23,074

119,377

-80.7%

Net Income Margin (%)

2.8%

9.7%

-693 pbs

-693 bps

1.5%

8.6%

-704 bps

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

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

"We are pleased to announce our second quarter results that reflect solid performance and renewed momentum. Although Mexico's political and economic environments remain tenuous due to various domestic and international factors, we are encouraged by the progress we have made since the first quarter, when market conditions became challenging.

Sexennial transition periods in government have historically been accompanied by pauses in public investment that often result in slower business cycles in Mexico.  Having a defensive property portfolio with geographic, sector and market diversification has always been our company's key competitive advantage, and the early part of the year was no exception.

By the end of the second quarter of 2019, Hoteles City Express's performance was solid, with positive trends across the economic corridors where we have a presence. More favorable business conditions in the Southeast, Northeast as well as Gulf corridors are primarily being driven by exports to the United States, with which Mexico has become the leading trading partner, despite economic volatility during the renegotiation of the USMCA. The result has been a healthy trade balance and, consequently, a strengthening of our hotels located in these regions.

During the quarter, our consolidated portfolio generated a solid 2.6% increase in RevPAR to deliver another double-digit gain in Total Revenues. Our strategies and commercial efforts related to the differentiation of our variety of brands and products, as well as our ability to capture more than 80% of reservations through our own sales channels, have enabled us to optimize our average daily rate and help continue reporting a healthy mix of performance indicators.

Hoteles City Express's productivity, as measured by Adjusted EBITDA, was 9.1%, compared to the same period last year. We continue to maintain strict cost and expense controls to help offset rising energy costs, which we can begin mitigating in the fourth quarter, when our Energy Acquisition and Supply Contract is expected to become fully effective. Additionally, we remain confident that the rapid expansion of our innovative operating, distribution and marketing platform will continue to improve profitability and result in greater operating leverage in the long term.

Regarding our expansion plan, we continue to focus investments in areas with clear growth trends, to enhance market diversification as well as tap current and future demand for lodging. As of the date of this report, we have more than 30 projects in development and we keep working hard in order to achieve our yearend goals, primarily focusing under the City Express Plus brand, which allows us to spread risk by entering deeper primary and secondary markets. Although we have encountered delays related to permits and government procedures, in locations such as Guadalajara and Mexico City, which may show an opening delay of 3-5 hotels, we are focused on resolving them as quickly as possible and achieving our annual expansion goals, as we have consistently done in previous years.

With 152 hotels in more than 70 cities across Mexico and in select markets in Latin America, Hotels City Express is the lodging chain with the greatest geographic diversification and most widely accepted brand in the region. We remain confident that executing strategies focused on commercial agility, investing with discipline, operating adaptably, and differentiating our products will allow us to continue growing efficiently and profitably to generate more value for our shareholders. Thank you for your continued trust in our company."

Conference Call Details:



Hoteles City Express will host a conference call to discuss these results. Details on the call follow:



Date:             

Thursday, July 18, 2019

Time:             

11:00 am Eastern Time / 10:00 am Mexico City Time

Telephones

1-866-652-5200  (from within the USA) / 1-412-317-6060 (outside the USA)


001-855-817-7630 (toll free in Mexico)


Please ask to be connected to the Hoteles City Express call.



Webcast:       

https://services.choruscall.com/links/hcity190718.html

Conference call replay will be available for 30 days: 
U.S.: 1-877-344-7529/ International: 1-412-317-0088
Code: 10132951

About Hoteles City Express:
Hoteles City Express is 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. Created 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 152 hotels located in Mexico, Costa Rica, Colombia and Chile, Hoteles City Express operates five distinct brands: City Express, City Express Plus, City Express Suites, City Express Junior and City Centro, 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," and in October 2014, Hoteles City Express completed a follow-on share issuance with the aim of accelerating its growth in new hotels in the coming years.

HCITY has formal coverage, notes and analytical assessment by the following financial institutions and analysts: Actinver (Pablo Duarte), Bank of America Merrill Lynch (Carlos Peyrelongue), Citigroup (Dan McGoey), GBM (Eugenio Saldaña), ITAU BBA (Enrico Trotta), J.P. Morgan (Adrián Huerta), Morgan Stanley (Nikolaj Lippman), Santander (Cecilia Jiménez), Signum Research (Armando Rodriguez) and UBS (Marimar Torreblanca).

For more information, please visit our website: https://cityexpress.com/es/inversionistas/

Disclaimer:
The information presented in this report contains certain forward-looking statements and information regarding Hoteles City Express, S.A.B. de C.V. and its subsidiaries (jointly, the "Company"), which are based on the understanding of its management, as well as assumptions and information currently available to the Company. These statements reflect the Company's current vision regarding future events and are subject to certain risks, factors of uncertainty and assumptions. Many factors may cause the results, performance and current achievements of the Company to be materially different with respect to any future results, performance and accomplishments of the Company that might be included, expressly or implicitly, within such forward-looking statements, including, among others: changes in general economic and/or political conditions, governmental and commercial changes at the global level and in the countries where the Company does business, changes in interest rates and inflation, exchange rate volatility, changes in business strategy, and various other factors. If one or more of these risks or uncertainty factors should materialize, or if the assumptions used prove to be incorrect, actual results may vary materially from those described herein as anticipated, estimated or expected. The Company does not intend to assume and does not assume any obligation whatsoever to update these forward-looking statements.

 

 

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SOURCE Hoteles City Express S.A.B. de C.V.


Source: Hoteles City Express S.A.B. de C.V.