MEXICO CITY, April 25, 2019 (GLOBE NEWSWIRE) -- Grupo Hotelero Santa Fe S.A.B. de C.V. (BMV: HOTEL) (“HOTEL” or “the Company”), announced its consolidated results for the first quarter (“1Q19”) ended March 31th, 2019. 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
- 1Q19 Total Revenue reached Ps. 622.6 million, an 8.3% increase compared to 1Q18, driven by the following increases: i) 20.7% in Food and Beverages Revenue, ii) 41.5% in Other Hotel Revenue, and iii) 7.7% in Third-party Hotels’ Management Fees; which more than offset a 3.9% decline in Room Revenue.
- 1Q19 EBITDA1 reached Ps. 211.2 million, a 6.4% decrease compared to 1Q18, derived from higher costs and expenses. 1Q19 EBITDA margin decreased to 33.9%.
- 1Q19 Net Income reached Ps. 106.4 million, a 48.1% decrease compared to the Ps. 204.9 million in 1Q18. This decrease was mainly attributed to a higher Net Financing Cost, combined with lower Operating Income. 1Q19 Net Income Margin was 17.1%.
- 1Q19 Net Operating Cash Flow was Ps. 165.7 million, a decrease of 15.9% compared to the Ps. 195.7 million reported in 1Q18. This variation was primarily driven by a lower EBITDA, which was partially offset by a lower unrealized FX loss.
- Net Debt/EBITDA (LTM) ratio was 4.2x at the end of 1Q19. Operating cash flow in dollars represented 100% of total operating cash flow, thereby providing a natural hedge of the dollarized financial debt.
- HOTEL’s total portfolio at the end of 1Q19 reached 5,916 rooms in operation, a 3.8% increase compared to the 5,701 rooms at end of 1Q18.
- RevPAR2 for the Company-owned hotels decreased by 12.4% in 1Q19 compared to 1Q18, due to a 3.8 percentage point decrease in occupancy combined with a 7.2% decrease in ADR2, driven by: i) the Holy Week shift from March (2018) to April (2019); ii) slowdown in international tourism combined with a lower perception of security in certain markets which impacted resort hotels; iii) the maturation curve of the Reflect Krystal Grand properties which has been negatively affected by the aforementioned external factors and, iv) lower economic activity in the country which affected urban hotels.
| First Quarter | 3 months ended March 31 | ||||||||||||||||
| Figures in thousand Mexican Pesos | 2019 | 2018 | Var. | % Var. | 2019 | 2018 | Var. | % Var. | |||||||||
| Total Revenue | 622,590 | 574,968 | 47,622 | 8.3 | 622,590 | 574,968 | 47,622 | 8.3 | |||||||||
| EBITDA | 211,213 | 225,634 | (14,421 | ) | (6.4 | ) | 211,213 | 225,634 | (14,421 | ) | (6.4 | ) | |||||
| EBITDA Margin | 33.9 | % | 39.2 | % | (5.3 pt | ) | (5.3 pt | ) | 33.9 | % | 39.2 | % | (5.3 pt | ) | (5.3 pt | ) | |
| Operating Income | 151,414 | 171,359 | (19,945 | ) | (11.6 | ) | 151,414 | 171,359 | (19,945 | ) | (11.6 | ) | |||||
| Net Income | 106,362 | 204,949 | (98,587 | ) | (48.1 | ) | 106,362 | 204,949 | (98,587 | ) | (48.1 | ) | |||||
| Net Income Margin | 17.1 | % | 35.6 | % | (18.6 pt | ) | (18.6 pt | ) | 17.1 | % | 35.6 | % | (18.6 pt | ) | (18.6 pt | ) | |
| Operating Cashflow | 165,741 | 195,658 | (29,917 | ) | (15.3 | ) | 165,741 | 195,658 | (29,917 | ) | (15.3 | ) | |||||
| Occupancy | 64.9 | % | 68.7 | % | (3.8 pt | ) | (3.8 pt | ) | 64.9 | % | 68.7 | % | (3.8 pt | ) | (3.8 pt | ) | |
| ADR | 1,385 | 1,493 | (108 | ) | (7.2 | ) | 1,385 | 1,493 | (108 | ) | (7.2 | ) | |||||
| RevPAR | 899 | 1,026 | (127 | ) | (12.4 | ) | 899 | 1,026 | (127 | ) | (12.4 | ) | |||||
| Note: operating figures include hotels with 50%+ ownership. | |||||||||||||||||
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 Executive Vice-President
Mr. Francisco Zinser, stated:
This first quarter marked a tough start for the tourism sector in Mexico and therefore also for HOTEL. Our quarterly results were below our expectations due to the Holy Week shift from March (2018) to April (2019) combined with external factors. In Mexico, tourist activity was negatively affected at both at resort and urban destinations. At resort destinations, the main issues were a slowdown in international tourism combined with a lower perception of security in certain markets. Recently, the US Department of state warned American citizens about incremental risks in the country. At urban destinations a slowdown in economic activity affected the booking activity of various segments including meetings & conventions, corporate accounts and government accounts due to austerity measures.
Moving on to our quarterly results, they were affected by the aforementioned effects combined with the maturation curve of the Reflect Krystal Grand properties which have been negatively affected by these factors. Revenue in the quarter totaled Ps. 622.6 million up 8.3% compared to 1Q18. EBITDA on the other hand was Ps. 211.2 million in the quarter, down 6.4% compared to 1Q18. Regarding company-owned hotels, RevPAR decreased by 12.4%, due to a 7.2% decrease in ADR and 3.8 percentage points of decrease in occupancy.
It is important to mention that since the beginning of the year we have tightened our cost-cutting initiatives to protect profitability. The lower than expected results for the Reflect Krystal Grand properties affected our profitability since this brand has higher standards and therefore higher operating costs. It is a natural effect, as you have to implement these standards in order to achieve higher ADR growth over time. We continue to believe that the the strategic alliance with AMResorts will bring the Company accelerated revenue growth coupled with a higher percentage of dollar denominated sales. We are already starting to see these effects, as 1Q19 we posted 48% dollarized income, a record for the company, compared to 42% in 1Q18.
Also, last month Nexxus Capital distributed their HOTEL shares among its investors, which are equivalent to 19.1% of total outstanding shares, as part of their natural exit plan. We believe we will benefit from this action in the short and long term, as our higher float and liquidity should be a catalyst for the Company’s objective of enhancing shareholder value.
HOTEL is on the right track to become the 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 profitable growth will enable us to meet our goals. As always, we are thankful for the trust and support of our shareholders.
| 1Q19 Conference Call Details: | ||
| HOTEL will host its earnings webcast (audio + presentation) to discuss results: | ||
| Date: | Friday, April 26, 2019 | |
| 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 Power Point presentation and the audio of the call, please visit our website www.gsf-hotels.com/investors | |
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 2018, the Company employed over 3,500 people and generated revenues of Ps. 2,065 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