MEXICO CITY, July 25, 2019 (GLOBE NEWSWIRE) -- Grupo Hotelero Santa Fe S.A.B. de C.V. (BMV: HOTEL) (the “HOTEL” or the “Company”), announced its consolidated results for the second quarter (“2Q19”) ended June 30, 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
- 2Q19 EBITDA1 was Ps. 134.2 million, a 0.8% increase compared to 2Q18, driven by revenue growth. 2Q19 EBITDA margin was 24.8%, compared to 28.2% in 2Q18.
- 2Q19 Total Revenues were Ps. 541.9 million, a 14.8% increase compared to 2Q18, driven by the following increases: i) 3.7% in Room Revenue, ii) 25.6% in Food and Beverages Revenue, iii) 46.8% in Other Hotel Revenue, and iv) 16.3% in Third-Party Hotels’ Management Fees.
- 2Q19 Net Income posted a gain of Ps. 19.7 million, compared to a loss of Ps. 77.8 million in 2Q18. A foreign exchange gain offset lower operating income and higher interest expenses.
- 2Q19 Net Operating Cash Flow was Ps. 163.4 million, an increase of 13.1% compared to the Ps. 144.4 million reported in 2Q18. This increase was driven by Net Income growth.
- At the end of 2Q19, Net Debt/LTM EBITDA ratio was 4.1x. Operating Cash Flow in US dollars represented 89.1% of total operating cash flow, thereby providing a natural hedge of the dollarized financial debt.
- HOTEL’s total portfolio at the end of 2Q19 was 6,058 rooms in operation, a 5.3% increase compared to the 5,756 rooms in operation at the end of 2Q18.
- RevPAR2 for Company-owned hotels decreased by 8.0% in 2Q19 compared to 2Q18, driven by a 7.6% decline in ADR2 combined with a 0.3 percentage point decrease in Occupancy.
| Second Quarter | 6 months ended June 30 | ||||||||
| Figures in thousand Mexican Pesos | 2019 | 2018 | Var. | % Var. | 2019 | 2018 | Var. | % Var. | |
| Total Revenue | 541,934 | 472,176 | 69,758 | 14.8 | 1,164,525 | 1,047,145 | 117,380 | 11.2 | |
| EBITDA | 134,180 | 133,096 | 1,084 | 0.8 | 345,393 | 358,730 | (13,337) | (3.7) | |
| EBITDA Margin | 24.8% | 28.2% | (3.4 pt) | (3.4 pt) | 29.7% | 34.3% | (4.6 pt) | (4.6 pt) | |
| Operating Income | 64,751 | 77,434 | (12,683) | (16.4) | 216,164 | 248,793 | (32,629) | (13.1) | |
| Net Income | 19,740 | (77,818) | 97,558 | NA | 126,102 | 127,131 | (1,029) | (0.8) | |
| Net Income Margin | 3.6% | (16.5%) | 20.1 pt | 20.1 pt | 10.8% | 12.1% | (1.3 pt) | (1.3 pt) | |
| Operating Cashflow | 163,403 | 144,434 | 18,969 | 13.1 | 329,144 | 340,091 | (10,947) | (3.2) | |
| Occupancy | 60.7% | 61.0% | (0.3 pt) | (0.3 pt) | 62.8% | 67.0% | (4.3 pt) | (4.3 pt) | |
| ADR | 1,288 | 1,393 | (106) | (7.6) | 1,338 | 1,446 | (109) | (7.5) | |
| RevPAR | 782 | 850 | (68) | (8.0) | 840 | 969 | (129) | (13.3) | |
| Note: operating figures include hotels with 50%+ ownership. | |||||||||
Comments from the Executive Vice-President
Mr. Francisco Zinser, stated:
Despite a turbulent year for the Mexican tourism sector, our sequential growth improved. Even so, our quarterly results were below our expectations due to external factors, which were partially offset by the Holy Week shift from March (2018) to April (2019). In Mexico, tourist activity at both resort and urban destinations continued to show softer dynamics. At resort destinations, the main headwind was the slowdown in international tourism that began at the end of last year, driven by the combined effect of perception of decreased security in certain markets, and the large amounts of sargassum (brown algae) washing up along the beaches in Cancún and the Riviera Maya. Regarding urban destinations, the slowdown in economic activity continued to affect booking activity in several segments, including meetings and conventions, corporate accounts, and government accounts due to austerity measures.
Our quarterly results were impacted by the aforementioned items, combined with the maturation curve of the Reflect Krystal Grand properties, (which have been negatively affected by the same factors), which weighed on our performance. Quarterly revenue totaled Ps. 541.9 million, up 14.8% compared to 2Q18. 2Q19 EBITDA, on the other hand, was Ps. 134.2 million, up 0.8% compared to 2Q18. Regarding Company-owned hotels, RevPAR decreased by 8.0%, due to the combined effect of a 7.6% decrease in ADR and a 0.3 percentage point contraction in Occupancy.
We would like to emphasize our increasingly stringent cost-cutting initiatives to maintain profitability, which have proved to be effective on a sequential basis. The lower-than-expected results in Reflect Krystal Grand properties affected our profitability, since this brand has higher standards and therefore higher operating costs. The foregoing is normal, as higher standards must be met in order to achieve higher ADR growth over time. The strategic alliance with AMResorts will bring about accelerated revenue growth for HOTEL, coupled with a higher proportion of dollar-denominated revenue. Our dollarized income is starting to grow and we estimate this trend will continue.
HOTEL is on the right track to become the leading hotel company in Mexico. Our management team and associates, who 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.
2Q19 Conference Call Details:
HOTEL will host its earnings webcast (audio + presentation) to discuss results:
Date: Friday, July 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: US: 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, focused 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. At 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 Maximilian Zimmermann
Chief Financial Officer Investor Relations Director
inversionistas@gsf-hotels.com mzimmermann@gsf-hotels.com
1EBITDA is calculated by adding together Operating Income, Depreciation and Total Non-Recurring Expenses.
2Revenue Per Available Room (“RevPAR”) and Average Daily Rate (“ADR”).