Hoteles City Express Announces Results for 1st Quarter 2017 with ADR growth of 18.0% and Operating Income Increase of 47.4%

MEXICO CITY, April 26, 2017 /PRNewswire/ -- Hoteles City Express S.A.B. de C.V. (BMV: HCITY) ("Hoteles City Express" or "the Company"), announced today its results for the first quarter ("1Q17").  The figures have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican Pesos ("$").

Financial and Operating Highlights (1Q17)

• At the Chain level, Average Daily Rate ("ADR") and Revenue per Available Room ("RevPAR") increased by 18.0% and 10.6% in comparison with 1Q16, to $957 and $532, respectively. Chain occupancy in 1Q17 was 55.6%.
  
  
• Total Revenues were $571.3 million, which represents a 25.6% increase with respect to the same quarter in 2016, primarily due to a 14.2% increase in the number of Installed Room Nights at the Chain level, as well as a 10.6% increase in RevPAR.
  
  
• Operating income was $109.9 million in 1Q17, an increase of 47.4% over the same quarter the year before.
  
  
• EBITDA and Adjusted EBITDA were $193.8 million and $196.1 million, respectively, reflecting year on year increases of 33.8% and 32.0%. EBITDA margin and Adjusted EBITDA margin for the period came to 33.9% and 34.3%, respectively.
  
  
• Net Income for the period reached $38.4 million. Net Income margin was 6.7% for the quarter.
  
  
• At the close of the quarter, the Chain was operating 124 hotels; an increase of 18 new units compared to the 106 hotels operating at the close of the same period in 2016. The number of rooms in operation in 1Q17 was 13,829, an increase of 15.8% in comparison with the 11,944 at the close of 1Q16.

Comments by Luis Barrios, Chief Executive Officer of Hoteles City Express:

"Our first quarter 2017 results reflect standout performance for Hoteles City Express across all aspects of the business.

In this quarter, macroeconomic uncertainty was offset by strong key demand generators in Mexico, especially consumption, exports, services and industry. In an economic landscape positively shaped by historically low unemployment, consistently growing salary mass and a solid base for gross fixed investment, our hotel inventory is reaping the benefits of diversification across all industries and geographies.

That said, in trying to absorb the impact of higher inflation and boost productivity at the asset level, we continued to push ADR growth. During the first quarter, ADR increased 18.0% and RevPAR posted an impressive 10.6% growth. We are selling a larger inventory of rooms at a significantly higher rate.

It is worth noting that the Company's priority remains maximizing our RevPAR for as long as we see robust market dynamics across the Chain's portfolio. This reflects the Company's commitment to boost the productivity of its asset base, resulting in strong revenue and productivity growth with less intensive room use.

Turning to our financial performance, our results demonstrate strong and profitable growth, with a 26% rise in Total Revenues and 47% growth in Operating Income. Adjusted EBITDA margin recorded its highest level for comparable periods since our IPO, reaching 34.3% as the Company's scaling efforts start to unfold. Notably, results from our Operating Company again show the relevance of its business, posting an attractive 40% growth in revenues before intercompany consolidation.

Our state-of-the-art digital marketing, distribution and room operation platform continues to bolster the Company's returns. A first-class user experience for each one of our guests, double-digit increases in rates, and margins above 30% are just the some of the benefits from our investments on this front. Now more than ever, we are committed to a process-geared organization that allow us to generate bottom-up innovation.

Regarding our 2017 development plan, we are on track with all projects. Our cost discipline and expertise in the development process will see us have 140 hotels in operation within the next twelve months, as we apply our cash balance to ramp up the utilization of our landbank. In terms of our international properties, our hotel in Medellín is due to open toward the end of the year.

Looking ahead, we will work hard to ensure that our impressive first quarter results mark the start of another record year for Hoteles City Express."

Conference Call Details:

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

About Hoteles City Express:
Hoteles City Express 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 Express specializes in offering high-quality, comfortable and safe lodging at affordable prices via a limited-service hotel chain geared mainly towards domestic business travelers. With 124 hotels located in Mexico, Costa Rica and Colombia, Hoteles City Express operates five distinct brands: City Express, City Express Plus, City Express Suites, City Express Junior, and City Centro to serve different segments of its target market. In June 2013, Hoteles City Express completed its IPO and began trading on the Mexican Stock Exchange under the ticker symbol "HCITY;" furthermore, in October of 2014, Hoteles City Express completed a follow on with the aim of accelerating its growth in new hotels in the short- and medium-term.

HCITY has formal coverage, notes and analytical assessments by the following financial institutions and analysts: Actinver (Pablo Duarte), Bank of America Merrill Lynch (Carlos Peyrelongue), Citigroup (Alejandro Lavín), GBM (Héctor Vázquez),  ITAU BBA (Enrico Trotta), J.P. Morgan (Adrián Huerta), Morgan Stanley (Nikolaj Lippman), Santander (Cecilia Jiménez), Signum Research (Armando Rodriguez) and UBS (Marimar Torreblanca).

For further information, please visit our website: https://cityexpress.com/en/investors/

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

Related Links

http://cityexpress.com/en/investors/