Total Revenue for 3Q16 reached Ps. 308.5 million, 28.6% higher compared to 3Q15, driven by the following increases: 30.6% in Room Revenue, 24.6% in Food and Beverages, 15.6% in Other Hotel Revenue and 49.9% in management fees related to third-party owned hotels.
Grupo Hotelero Santa Fe S.A.B. de C.V. (BMV:HOTEL) (“HOTEL” or “the Company”), announced today its consolidated results for the third quarter period (“3Q16”) ended September 30, 2016. Figures are expressed in Mexican Pesos, are unaudited and are in accordance with International Financial Reporting Standards “IFRS”).
3Q16 Highlights
- Total Revenue for 3Q16 reached Ps. 308.5 million, 28.6% higher compared to 3Q15, driven by the following increases: 30.6% in Room Revenue, 24.6% in Food and Beverages, 15.6% in Other Hotel Revenue and 49.9% in management fees related to third-party owned hotels.
- As a result of the revenue growth and efficiencies from operating leverage achieved in 3Q16, EBITDA1 reached Ps. 108.3 million, 39.5% higher compared to the figure reported in 3Q15. EBITDA margin rose by 2.8 percentage points compared to 3Q15, to reach 35.1% in 3Q16.
- Net Income for 3Q16 reached Ps. 64.4 million, equal to a net income margin of 20.9%, mainly as a result of lower net financing costs, as the Company increased its U.S. dollar position to hedge all of its U.S. dollar-denominated financial liabilities.
- Net operating cash flow for 3Q16 was Ps. 99.4 million, an increase of 20.3% compared to the Ps. 82.6 million reported in 3Q15. This increase was mainly due to EBITDA growth and variations in working capital.
- Net Debt/EBITDA (LTM) ratio was -1.8xat the end of 3Q16. Operating cash flow in dollars represented 48.9% of total operating cash flow, thereby maintaining a natural hedge of the dollarized financial debt.
- HOTEL’s total portfolio at the conclusion of 3Q16 reached 4,472 rooms in operation, a 14.7% increase compared to the 3,898 rooms at end of 3Q15. The 574-room increase was the result the following: 73% from new contracts for third-party owned hotels managed by the Company, 24% from the inclusion of Company-owned hotels to the portfolio and 2% from the remodeling and/or expansion of third-party owned hotels that were already managed by the Company.
- RevPAR2 for the Company-owned hotels rose by 21.4% in 3Q16 compared to 3Q15, driven by an increase of 9.3% in ADR2 and 6.9 percentage points in occupancy.
Chief Executive Officer Mr. Francisco Zinser, stated:
Results continue to follow a very positive trend, as was evident in the quarterly figures. Additionally, the tourism industry continues to experience very solid fundamentals. As such, the tourism boom that is being felt throughout the country will allow the various annual sector indicators to reach very strong growth at the close of 2016, in line with the projections of the National Tourism Board (Consejo Nacional Empresarial Turístico) and Anahuac University’s Tourism and Gastronomy Faculty (Facultad de Turismo y Gastronomía). According to the latest report drafted by both institutions, entitled “Mexican Panorama”, for 2016, the arrival of international tourists is expected to increase by 10%, to reach 35.3 million. This will give the country the opportunity to climb up the ranking of the most visited destinations in the world, where Mexico is currently in ninth place.
Once again, this quarter has been extraordinary. In the Company-owned hotels, we reached balanced growth both in terms of occupancy as well as ADR that drove 21.4% RevPAR growth with almost half of the growth coming from the ADR increase. Revenues of Ps. 308.4 million and EBITDA of Ps. 108.3 million rose by 29% and 40%, respectively, versus the previous year. In the nine-month results, we can see EBITDA growth of 38.9% reaching Ps. 319.1 million. It is important to mention that EBITDA for the accumulated nine months was 35.4%, a new record for the Company.
As part of our expansion plan, we continue working on the 2 projects located on Insurgentes in Mexico City; these are in line with the formerly-announced plan. Additionally, the Company is working on the 100-room suite expansion at the Krystal Grand Punta Cancun.
I wish to highlight that we reached 51% growth in Operating Revenue, compared to 3Q15, which was mostly derived from the solid performance of our hotel portfolio, the inclusion of the Krystal Urban Guadalajara as a Company-owned hotel, as well as three third party-owned hotels managed by the Company, which were not in the portfolio during 3Q15.. It is important to mention that this last segment continues to contribute significantly to our results. During 3Q16, the Krystal Monterrey was added to this portfolio; this 207-room hotel is located in the central part of the city of Monterrey. With this inclusion, we have three hotels in this city, which represents 9.7% of the total portfolio.
Lastly, I want to mention that none of these achievements would have been possible without the support of our great management team, our dedicated employees who work alongside us, as well as the confidence placed in us by you, our investors.
About Grupo Hotelero Santa Fe
HOTEL is one of the leading companies in the Mexican hotel industry and is focused on acquiring, developing and operating hotels. The Company has a unique business model characterized by its flexibility and adaptability as HOTEL´s experience allows it to operate under different brands, local and foreign, in different segments.
The Company maintains a focus on the strengthening and positioning of its Krystal® brand, which has considerable recognition in the Mexican market. This strategy allows HOTEL to offer different experiences adapted to the specific demand in each market and to maximize the profitability of its investments.
The Company’s operating model is characterized by the multi-functionality and efficiency of its personnel, as well as a strict cost control that allows a rapid adaptation and anticipation to the changing necessities of the industry. HOTEL has the capacity to add new hotels to its existing portfolio through acquisition, development and conversion of properties or through the celebration of operating contracts with third parties. The Company considers that its diversified portfolio and its management capacities focused on profitability, in addition to the property of a brand with high recognition in the market, all together help HOTEL to obtain new operating contracts for hotels owned by third parties.
Our shares are listed on the Mexican Stock Exchange (BMV: HOTEL).
1EBITDA is calculated by adding Operating Income, Depreciation and Total Non-recurring expenses.
2Revenue per Available Room (“RevPAR”) and Average Daily Rate (“ADR”).