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HOTEL reports 8.4% growth in Total Revenue for 2019

February 20, 2020

MEXICO CITY, Feb. 20, 2020 (GLOBE NEWSWIRE) -- Mexico City, February 20, 2020 – Grupo Hotelero Santa Fe S.A.B. de C.V. (BMV: HOTEL) (“HOTEL” or the “Company”), announced its consolidated results for the fourth quarter (“4Q19”) and full-year ended December 31, 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

  • 2019 EBITDA1 was Ps. 645.6 million, in line with our revised 2019 guidance, representing a 4.5% decrease compared to 2018.

  • 2019 Total Revenue was Ps. 2,237.9 million, slightly above our revised 2019 guidance, representing an 8.4% increase compared to 2018.

  • 4Q19 Total Revenue rose to Ps. 565.5 million, a 4.2% improvement compared to 4Q18, driven by the following increases: i) 0.1% in Room Revenue, ii) 9.1% in Food and Beverages, iii) 5.4% in Other Hotel Revenue, and iv) 9.9% in Third-Party Hotels’ Management Fees.

  • 4Q19 EBITDA was Ps. 160.7 million, a 7.3% decrease compared to 4Q18 driven by higher costs and expenses. 4Q19 EBITDA margin was 28.4%.

  • HOTEL posted 4Q19 Net Income of Ps. 67.2 million, compared to Ps.17.1 million in the same period of last year; mainly explained by the positive FX result recorded in 4Q19, versus an FX loss in 4Q18.

  • 4Q19 Net Operating Cash Flow was Ps. 96.1 million, a decrease of 42.6% compared to the Ps. 167.5 million reported in 4Q18. This decrease was mainly due to the unrealized FX loss recorded in this period.

  • Net Debt/EBITDA (LTM) ratio was 3.8x at the end of 4Q19. Operating cash flow in dollars in 4Q19 represented 100% of total operating cash flow, thereby maintaining a natural hedge of the dollarized financial debt.

  • HOTEL’s total portfolio at the end of 4Q19 reached 7,130 rooms with 29 hotels, a 4.7% increase compared to the 6,808 rooms at end of 4Q18.

  • RevPAR21for Company-owned hotels remained stable in 4Q19 compared to 4Q18, as the decrease of 6.2% in ADR2 was offset by a 3.7 percentage point increase in occupancy.
 Fourth Quarter 12 months ended December 31
Figures in thousand Mexican pesos20192018Var.% Var. 20192018Var.% Var.
Total Revenue  565,531  542,74122,7904.2  2,237,902 2,064,941172,9608.4
EBITDA  160,666  173,338(12,673)(7.3)   645,570  675,794(30,225)(4.5)
EBITDA Margin28.4%31.9%(3.5 pt)(3.5 pt) 28.8%32.7%(3.9 pt)(3.9 pt)
Operating Income  87,142  111,484(24,342)(21.8)   378,749  450,554(71,806)(15.9)
Net Income  67,164  17,07650,088NA   164,042  267,337(103,295)(38.6)
Net Income Margin11.9%3.1%8.7 pt8.7 pt 7.3%12.9%(5.6 pt)(5.6 pt)
Operating Cashflow  96,130  167,533(71,403)(42.6)   573,775  668,569(94,794)(14.2)
Occupancy61.2%57.5%3.7 pt3.7 pt 61.0%61.5%(0.5 pt)(0.5 pt)
ADR  1,315  1,402(87)(6.2)   1,317  1,422(105)(7.4)
RevPAR80680600.0 803875(72)(8.2)
Note: operating figures include hotels with 50%+ ownership. 

Comments from the Executive Vice President

Mr. Francisco Zinser, stated:

2019 was a challenging year for the Mexican economy as a whole and, thus, for the tourism sector. Our annual results were below our expectations mostly due to external factors. 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 2018, driven by the combined effect of sargassum (brown algae) washing up along the beaches in Cancun and the Riviera Maya, and the perception of decreasing security in certain markets. However, tourist destinations in the Pacific region, such as Puerto Vallarta and Los Cabos, had positive results in part due to the favorable shift of travelers that have preferred these destinations versus the Mexican Caribbean due to the reasons previously mentioned. 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. Keep in mind that this last item includes not only government accounts, but all third-party consultants and service providers who serve this segment.

We met our updated 2019 guidance for both Revenues and EBITDA. Providing more insight into our annual performance, results were also impacted by the aforementioned issues, combined with the performance of the Reflect Krystal Grand properties, which have been negatively affected by the same factors, weighing on our performance for the whole of the year. 2019 revenues were Ps. 2,237.9 million, up 8.4% compared to 2018; EBITDA, on the other hand, was Ps. 645.6 million, down 4.5% compared to 2018, mainly due to lower top line growth, coupled with lower-than-expected results at Reflect Krystal Grand properties. This affected our margins, as this brand has higher standards and, therefore, higher operating costs combined lower than expected ADR. Regarding Company-owned hotels, RevPAR was down 8.2%, due to a 7.4% decrease in ADR, combined with a 0.5 percentage point contraction in Occupancy.

As for management contracts, we added two hotels into our portfolio during 2019. First, the AC Hotel by Marriott Santa Fe with 168 rooms located in the Santa Fe district in Mexico City. Second, the Courtyard by Marriott Puebla with 154 rooms located in the city of Puebla, Puebla. Additionally, we will be operating the Breathless Tulum Resort & Spa, a Grand Tourism category resort with 300 rooms that is under construction. Lastly, we expect the construction of the Hyatt Regency Mexico City Insurgentes to resume soon. 

To wrap up, I would like to mention that none of these achievements would have been possible without the support of our dedicated employees, experienced management team, and the confidence that you, our investors, have placed in us.

4Q19 Conference Call Details:
HOTEL will host its earnings webcast (audio + presentation) to discuss results:
Date:Friday, February 21, 2020
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, 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 2019, the Company employed over 3,500 people and generated revenues of Ps. 2,238 million. For more information, please visit www.gsf-hotels.com

?Contact Information? 
Enrique Martínez Guerrero

Chief Financial Officer

inversionistas@gsf-hotels.com 
Maximilian Zimmermann

Investor Relations Director

mzimmermann@gsf-hotels.com

 

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

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