Hoteles City Announces Second Quarter 2014 Results with Year-over-Year Growth in RevPAR, Revenue and Adjusted EBITDA of 8.7%, 25.7% and 38.3%, Respectively

MEXICO CITY, July 23, 2014 /PRNewswire/ -- Hoteles City Express S.A.B. de C.V. (BMV: HCITY) ("Hoteles City" or "the Company"), the leading limited-service hotel chain in Mexico, today announced its financial results for the second quarter ended June 30, 2014 ("2Q14").  These figures were prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican Pesos ("$").

Financial and Operating Highlights (2Q14)

• At the end of the second quarter of 2014, Hoteles City reached a total 86 hotels in operation, which represents an increase of 13 units compared to 73 hotels in operation at the end of 2Q13.  The number of rooms in operation at the end of 2Q14 totaled 9,778, 17.0% higher than the 8,360 rooms in operation at the close of the same quarter last year.
  
  
• At the hotel chain level, Occupancy Rate reached 57.6% in 2Q14, with an Average Daily Rate ("ADR") of $744 and Revenue per Available Room ("RevPAR") of $429, representing year-over-year increases of 3.3% and 8.7%, respectively. For Established Hotels, Average Occupancy Rate reached 60.6%, with an ADR of $724 and RevPAR of $438, representing year-over-year increases of 1.2% and 4.7%, respectively.
  
  
• Total Revenues grew 25.7% year-over-year to $338.3 million, driven by a 24.2% increase in the number of Occupied Room Nights at the hotel chain level and improvements both in ADR and RevPAR.
  
  
• EBITDA increased 38.6% year-over-year to $108.6 million, while EBITDA margin expanded by 297 basis points ("bps") to 32.1%.  Adjusted EBITDA climbed 38.3% year-over-year to $111.4 million, while Adjusted EBITDA margin improved by 299 bps to 32.9%.
  
  
• Net Income rose 84.0% year-over-year to $32.2 million, while Net Income margin widened by 302 bps to 9.5%.

Adjusted EBITDA = Operating income + Depreciation + Amortization + Pre-opening Expenses for New Hotels.

Comments from the Chief Executive Officer                                                           

Luis Barrios, Chief Executive Officer of Hoteles City, commented:

"Hoteles City's operating and financial indicators in the second quarter of 2014 continue to strengthen on different levels. We achieved strong year-over-year growth of 18.0% in Installed Room Nights and 24.2% in Occupied Room Nights.  RevPAR expanded 8.7% this quarter, despite our recent new hotel openings, which tend to average-down chain-wide occupancy levels during the ramp up process. 

Total Revenues rose 25.7% to $338.3 million and Adjusted EBITDA increased 38.3% to $111.4 million. This quarter's rapid growth in installed capacity has been accompanied by higher levels of profitability at the Operating Income, Adjusted EBITDA and Net Income levels, despite an environment of slow economic growth in the country.

Hoteles City's second quarter and year-to-date results reflect the effectiveness of our business model and highly-efficient hotel operations.  It is important to highlight that Hoteles City's strong performance during the first half of 2014 was achieved during an environment of gradual improvement in the Mexican economy.  Comparable annual GDP growth as of the first quarter 2014 was 1.8%, well below consensus growth expectations at the beginning of the year. However, the dynamic of greater productive activity across certain regions of the country has delivered a favorable impact that will benefit Hoteles City.

With respect to our activities in the development of new hotels, during the second quarter of the year we commenced operations at City express Paraiso, Tabasco, which extends our broad hotel footprint in the energy corridor in the Gulf of Mexico. With the opening of this hotel we continue to make progress executing on our 2014 Development Plan.  We maintain our objective of achieving an additional 14 new hotel openings in the coming months, aiming to close 2014 with 100 hotels in operation.

We recently passed the one-year anniversary of our listing on the Mexican Stock Exchange.  During our inaugural year as a publicly-traded company, we have consistently reported positive operating and financial results, reflecting the favorable evolution of our business. Likewise, we have remained close to the market, implementing best practices in investor relations and corporate governance. Looking ahead, we remain focused on delivering strong operational results, while pursuing a long-term strategic vision and business plan."

For a full version of this earnings release with complete financial statements, please visit: http://www.hotelescity.com/en/investors.aspx.

2Q14 Conference Call Details:

Hoteles City will host a conference call to discuss these results:

Conference Replay (available for 12 days):
Dial 1-877-870-5176 or 1-858-384-5517
Passcode: 7686888

About Hoteles City:
Hoteles City is considered the leading and fastest-growing limited-service hotel chain in Mexico, in terms of number of hotels, number of rooms, geographic presence, market share and revenues. Founded in 2002, Hoteles City specializes in offering high-quality, comfortable and safe lodging at affordable prices via a limited-service hotel chain geared towards the domestic business traveler. With 86 hotels in operation located throughout Mexico, Costa Rica and Colombia, Hoteles City operates three distinct brands: City express, City Suites and City junior to serve different segments of its target market. In June 2013, Hoteles City successfully completed its IPO and began trading on the Mexican Stock Exchange under the ticker symbol "HCITY".

HCITY is covered by the following financial institutions and analysts: Bank of America Merrill Lynch (Carlos Peyrelongue), Citigroup (Dan McGoey), Morgan Stanley (Rafael Pinho), Actinver (Pablo Duarte) y J.P. Morgan (Adrian Huerta).

For more information please visit our Investor Relations website: http://www.hotelescity.com/en/investors.aspx

Disclaimer:
The information presented in this report contains certain forward-looking statements regarding Hoteles City Express, S.A.B. de C.V. and its subsidiaries ("the Company"), which are based on the understanding of its management as well as assumptions available to the Company. These statements reflect the Company's current vision regarding future events and are subject to certain risks, factors of uncertainty and assumptions. Many factors may cause the results, performance and actual achievements of the Company to be materially different from those expressed or implied by these forward-looking statements, including among others, changes in the general economic or political conditions, government and commercial changes at the global level and in the countries in which the Company operates, changes in interest rates and inflation, exchange rate volatility, changes in the business strategy and various other factors. If one or more of these uncertainty factors come to be or if the assumptions utilized are incorrect, actual results can differ materially from those expressed as forward-looking statements, estimated or expected. The Company expressly disclaims any obligation or undertaking to release any update of or revisions to any forward looking statements in this presentation.

SOURCE Hoteles City Express, S.A.B. de C.V.