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HOTEL reports 36% and 35% increases in Total Revenues and EBITDA respectively for 2Q17

MEXICO CITY, July 20, 2017 (GLOBE NEWSWIRE) -- Grupo Hotelero Santa Fe S.A.B. de C.V. (BMV:HOTEL) (“HOTEL” or “the Company”), announced its consolidated results for the second quarter (“2Q17”) ended June 30, 2017. Figures are expressed in Mexican Pesos, are unaudited and are in accordance with International Financial Reporting Standards (“IFRS”) and may vary due to rounding.

Highlights

  • 2Q17 EBITDA1 reached Ps. 109.7 million, a 34.5% increase compared to 2Q16 mainly driven by revenue growth. 2Q17 EBITDA margin slightly contracted to 29.8% due the incorporation of Krystal Grand Los Cabos and Krystal Grand Nuevo Vallarta which are in stabilization.
  • 2Q17 Total Revenue reached Ps. 368.3 million, a 35.5% increase compared to 2Q16, driven by the following increases: i) 33.1% in Room Revenue, ii) 42.6% in Food and Beverages Revenue, iii) 28.8% in Other Hotel Revenue, and iv) 34.3% in management fees related to third-party owned hotels.
  • 2Q17 Net Income reached Ps. 74.1 million compared to a negative figure in 2Q16 driven by an FX loss. Net income margin was 20.1%, driven by an FX gain combined with a higher operating income.
  • 2Q17 Net operating cash flow was Ps. 127.3 million, an increase of 32.8% compared to the Ps. 95.9 million reported in 2Q16. This increase was mainly due to working capital variations combined with a higher operating income.
  • Net Debt/EBITDA (LTM) ratio was 1.3x at the end of 2Q17. Operating cash flow in dollars represented 92.1% of total operating cash flow, thereby providing a natural hedge of the dollarized financial debt.
  • HOTEL’s total portfolio at the end of 2Q17 reached 5,264 rooms in operation, a 23.4% increase compared to the 4,265 rooms at end of 2Q16.
  • RevPAR2 for the Company-owned hotels rose by 5.7% in 2Q17 compared to 2Q16, driven by an increase of 10.3% in ADR2 which more than compensated a lower occupancy following the incorporation of the Krystal Grand Los Cabos and Krystal Grand Nuevo Vallarta which are in stabilization.

Second Quarter 6 months ended June 30
Figures in thousand Mexican Pesos 2017 2016 Var. % Var. 2017 2016 Var. % Var.
Total Revenue 368,336 271,915 96,420 35.5 755,377 594,067 161,310 27.2
EBITDA 109,745 81,565 28,181 34.5 260,391 210,841 49,550 23.5
EBITDA Margin 29.8% 30.0% (0.2 pt) (0.2 pt) 34.5% 35.5% (1.0 pt) (1.0 pt)
Operating Income 65,139 47,217 17,922 38.0 175,475 146,045 29,429 20.2
Net Income 74,147 (20,385) 94,533 NA 259,073 50,006 209,068 NA
Net Income Margin 20.1% (7.5%) 27.6 pt 27.6 pt 34.3% 8.4% 25.9 pt 25.9 pt
Operating Cashflow 128,577 95,906 32,671 34.1 285,256 222,356 62,900 28.3
Occupancy 62.9% 65.6% (2.7 pt) (2.7 pt) 66.2% 68.0% (1.8 pt) (1.8 pt)
ADR 1,336 1,212 124 10.3 1,415 1,306 109 8.3
RevPAR 840 795 45 5.7 937 888 49 5.6
Note: operating figures include hotels with 50%+ ownership.

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1EBITDA is calculated by adding Operating Income, Depreciation and Total Non-recurring expenses.
2Revenue per Available Room (“RevPAR”) and Average Daily Rate (“ADR”).


Comments from the Chief Executive Officer

Mr. Francisco Zinser, stated:

The first half of the year has been solid for HOTEL; results for the second quarter exceeded our expectations, supported by the positive Holy Week effect. In Mexico, tourism continues to post robust growth with solid underlying fundamentals. As per Bank of Mexico’s publication, tourism revenue from international travelers increased 10.2% from January to May in 2017 compared to the same period last year, which is a good indicator that the rest of the year should be positive for our sector.

A couple of months ago we closed an important acquisition for the Company, which was comprised of a 50% stake of two hotels in Los Cabos and Nuevo Vallarta. The Krystal Grand Los Cabos was officially inaugurated in June, with 454 rooms and the Krystal Grand Nuevo Vallarta is currently in expansion and will be a 479-room hotel by November 2017; currently the hotel is in operation with 215 rooms. The ramp up in terms of occupation in Krystal Grand Los Cabos was slightly slower than expected in the first months of operation, but since June has already reached expected levels.

Moving on to our quarterly results, we posted solid numbers. In the quarter, revenues were Ps. 368.3 million and EBITDA was Ps. 109.7 million, which increased by 36% and 35% respectively, compared to 2Q16. Regarding company-owned hotels, we reached a RevPAR growth of 5.7% driven by an increase of 10.3% in ADR which more than offset a lower occupancy, following the incorporation of the Krystal Grand Los Cabos and Krystal Grand Nuevo Vallarta which are in stabilization.

In this reporting quarter, we also announced two new management contracts for third-party owned hotels. The first one is the Ibis Irapuato, a 140-room hotel which we are operating since June. The second one is the Zacatecas Centro Histórico Curio Collection by Hilton, a 32-room hotel under construction. With these contracts, we are reaching 12 hotels under a third-party Management Contract that has been added to the Company’s portfolio, a clear sign of trust from real estate investors on HOTEL’s operating capacity.

We are excited about the second half of the year as our expansions of the Krystal Grand Punta Cancun and the Hilton Puerto Vallarta will open in August and December, respectively. Also, we plan to open the first tower of the Krystal Grand Suites in Mexico City by September; with the second one in October. These openings combined with the growth in the Krystal Grand Los Cabos and with new rooms becoming available from our expansion at Krystal Grand Nuevo Vallarta, will fuel our growth in the second half of the year. Hence, we are confident to achieve the objectives set in our 2017 Guidance which comprises growth rates of 40% and 45% for Revenues and EBITDA respectively.

We are on the right track to become a leading hotel company in Mexico. Our top management team and associates which are recognized for their passion and commitment, combined with high efficiency levels and growth will enable us to meet our goal. As always, we are thankful for the trust and support of our shareholders.

2Q17 Conference Call Details:

HOTEL will host its earnings webcast (audio + presentation) to discuss results:

Date: Friday, July 21, 2017
Time: 12:00 p.m. Mexico City Time
1:00 p.m. New York Time
To participate in the conference call and Q&A session please dial:
Telephone: U.S.: 1 800 863 3908
International +1 334 323 7224
Mexico: 01 800 847 7666
Conference password: HOTEL 000
Webcast: The webcast will be in English. To follow presentation and the audio of the call, please visit https://hotel.adobeconnect.com/hotel/

About Grupo Hotelero Santa Fe
HOTEL is a leading company in the Mexican hotel industry, centered on acquiring, converting, developing and operating its own hotels as well as third party-owned hotels. The Company focuses on strategic hotel location and quality, a unique hotel management model, strict expense control and the proprietary Krystal® brand as well as other international brands. As of year-end 2016, the Company employed over 2,800 people at 23 hotels in Mexico and generated revenues of Ps. 1,221 million. For more information, please visit www.gsf-hotels.com

Contact Information Enrique Martínez Guerrero Chief Financial Officer +52 55 5261 0800 inversionistas@gsf-hotels.com Maximilian Zimmermann Investor Relations Director +52 55 5261 4508 mzimmermann@gsf-hotels.com

Source:Grupo Hotelero Santa Fe SAB de CV