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HOTEL reports double-digit growth in both Total Revenues and EBITDA for 3Q17

MEXICO CITY, Oct. 25, 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 third quarter (“3Q17”) ended September 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

  • 3Q17 EBITDA1 reached Ps. 121.1 million, a 11.8% increase compared to 3Q16 mainly driven by revenue growth. 3Q17 EBITDA margin contracted to 31.5% as a result of lower occupancy during the quarter driven by external factors such as hurricanes, rainfall and earthquakes among others.
  • 3Q17 Total Revenue reached Ps. 384.8 million, a 24.7% increase compared to 3Q16, driven by the following increases: i) 20.8% in Room Revenue, ii) 45.2% in Food and Beverages Revenue and iii) 15.6% in Other Hotel Revenue which more than compensated a 14.1% decrease in Third Party Hotel Management Fees driven by the sale of Krystal Grand Reforma.
  • 3Q17 Net Income reached Ps. 45.1 million, a 29.9% decrease compared to 64.4 million for the same quarter 2016. This variation is explained by increased interest expenses due to lower interest expenses in 3Q16 driven by the interest income from the cash received from the follow-on in that quarter.
  • 3Q17 Net operating cash flow was Ps. 102.5 million, an increase of 3.2% compared to the Ps. 99.4 million reported in 3Q16. This increase was driven by a higher Cashflow before working capital variations which more than compensated a higher working capital due to the inclusion of Krystal Grand Los Cabos and Krystal Grand Nuevo Vallarta.
  • Net Debt/EBITDA (LTM) ratio was 1.6x at the end of 3Q17. Operating cash flow in dollars represented 55.0% of total operating cash flow, thereby providing a natural hedge of the dollarized financial debt.
  • HOTEL’s total portfolio at the end of 3Q17 reached 5,014 rooms in operation, a 12.1% increase compared to the 4,472 rooms at the end of 3Q16.
  • RevPAR2 for the Company-owned hotels decreased by 9.0% in 3Q17 compared to 3Q16, due to lower occupancy driven by external factors such as hurricanes, rainfall and earthquakes among others.
  • The Company announces its updated 2017 guidance. 2017e Total Revenue: Ps. 1,550 million. 2017e EBITDA: Ps. 530 million. This guidance has been prepared using an average exchange rate of US Dollar/Mexican Peso of US$: $19.00

Third Quarter 9 months ended September
Figures in thousand Mexican Pesos 2017 2016 Var.% Var. 2017 2016 Var.% Var.
Total Revenue 384,812 308,471 76,34124.7 1,140,188 902,537 237,65126.3
EBITDA 121,126 108,300 12,82611.8 381,517 319,141 62,37619.5
EBITDA Margin31.5% 35.1% (3.6 pt) (3.6 pt) 33.5% 35.4% (1.9 pt) (1.9 pt)
Operating Income 81,089 77,249 3,8395.0 256,564 223,295 33,26914.9
Net Income 45,146 64,402 -19,255 (29.9) 304,220 114,401 189,818 NA
Net Income Margin11.7% 20.9% (9.1 pt)(9.1 pt) 26.7% 12.7% 14.0 pt14.0 pt
Operating Cashflow 102,528 99,356 3,1723.2 389,038 314,692 74,34623.6
Occupancy61.9% 69.8% (7.9 pt)(7.9 pt) 64.7% 68.6% (4.0 pt)(4.0 pt)
ADR 1,339 1,305 342.6 1,389 1,306 836.3
RevPAR 829 911 -82(9.0) 898 896 20.3
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:

2017 continues to be a great year for the Mexican tourist industry as growth remains robust, supported by solid underlying fundamentals. According to figures from the Secretary of Tourism, Mexico’s international visitors grew 12% in 1H17 and foreign investment in tourism, in the same period, almost doubled the figure recorded in 2016.

HOTEL posted solid results for the first nine months of the year, with both revenues and EBITDA growing 20% or above. As for the quarterly results, revenues and EBITDA increased by 25% and 12% respectively, compared to 3Q16. These numbers were below expectations as occupancy in the quarter was affected by multiple external factors. First off, we were affected by hurricanes and bad weather which impacted the markets in Los Cabos, Vallarta and Cancun among others, thus impacting our properties. Secondly, the meteorological phenomena that impacted the US in Texas and Florida generated some, cancelations from US customers that were unable to travel amongst other destinations to Mexico. Thirdly, we experienced the earthquake in Mexico generating a general slowdown impacting travel around the country. Furthermore, this year we did not have a long weekend for Mexican Independence Day as the 16th of September this year was a Saturday. Lastly, we had the US government travel warning which has impacted travel from US customers. All of these factors combined with the incorporation of new hotels during the year which are just beginning their maturation curve, resulted in an 8 percentage point lower occupancy of 61.9% for our owned hotels, remaining above the average of the country.

Regarding openings, we announced a couple this quarter. First, the opening of the Altitude Tower of the Krystal Grand Cancun. The building has 100 suites which were added to the 295 existing suites of the hotel which will achieve a 50% higher ADR than the Company’s average. The investment in the project was in line with our budget of Ps. 222 million. Secondly, we announced the opening of the Krystal Grand Suites property located on Insurgentes Sur. It has 150 long-stay suites including kitchenettes. The investment in the project was in line with our budget of Ps. 493 million pesos and the property began its preopening at the end of the quarter, as planned.

We are excited about the fourth quarter of the year as we will have a full quarter of all the hotels we opened this year, combined with the expansions of the Krystal Grand Nuevo Vallarta and the Hilton Puerto Vallarta which will both open by the end of 4Q17.

We continue 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 levels of efficiency and growth will enable us to meet our goal. As always, we are thankful for the trust and support of our shareholders.

3Q17 Conference Call Details:

HOTEL will host its earnings webcast (audio + presentation) to discuss results:
Date:Thursday, October 26, 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 the presentation and 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
CFO
+52 55 5261 0800

Maximilian Zimmermann
IR Director
+52 55 5261 4508


Source:Grupo Hotelero Santa Fe SAB de CV