Hoteles City Express Announces Results for 3rd Quarter 2016 with 10.2% growth in RevPAR and Adjusted EBITDA Margin of 34.8%

MEXICO CITY, Oct. 19, 2016 /PRNewswire/ -- Hoteles City Express S.A.B. de C.V. (BMV: HCITY) ("Hoteles City Express" or "the Company"), announced today its results for the third quarter of 2016 ("3Q16").  The figures have been prepared in accordance with International Financial Reporting Standards ("IFRS") and are presented in Mexican Pesos ("$").

Financial and Operating Highlights (3Q16)

• At the Chain level, occupancy in 3Q16 came to 63.2%. The Average Daily Rate ("ADR") and Revenue per Available Room ("RevPAR") showed significant increases of 11.5% and 10.2% in comparison with 3Q15, registering $854 and $539, respectively.
• Total Revenues were $533.6 million, which represent an 18.7% increase with respect to the same quarter in 2015, primarily due to a 9.9% rise in the number of Occupied Room Nights at the Chain level, as well as a 10.2% increase in RevPAR.
• Operating Income was $105.4 million in 3Q16, an increase of 23.6% over the same quarter last year.
• EBITDA and Adjusted EBITDA were $180.5 million and $185.5 million, respectively, reflecting increases of 15.6% and 17.3% compared with the same period of the year before. EBITDA margin and Adjusted EBITDA margin for the period came to 33.8% and 34.8%, respectively.
• Net Income for the period reached $71.6 million. Net Income margin was 13.4% for the quarter.
• At the close of the quarter, the Chain was operating 115 hotels; an increase of 15 new units compared to the 100 hotels operating at the close of the same period in 2015. The number of rooms in operation in 3Q16 was 12,887, an increase of 13.9% in comparison with the 11,313 at the close of 3Q15.

Comments from Mr. Luis Barrios, CEO of Hoteles City Express:

"Our third quarter 2016 operating and financial results continue to show strengthening trends on all fronts. Specifically, our emphasis on accelerated growth with strong profitability enabled us to report double-digit increases in RevPAR, Total Income, Adjusted EBITDA and Net Income this quarter.

During the third quarter, we continued to focus on increasing ADR across the chain through effective marketing and yield management, which resulted in a 10.2% increase in RevPAR. Along these lines, it's important to note that our Established hotels, those in operation for at least 36 months, reported 68.8% occupancy at the quarter end, with ADR and RevPAR growth of 12.4% and 12.6%, respectively.

Hoteles City Express has maintained this strong operating performance against the backdrop of Mexico's uneven economic growth, due to our geographical diversification and our presence in higher growth markets. We also continue to benefit from strong growth of the maquila industry in the north of the country, as well as regions with exposure to manufacturing and service industries, primarily within metropolitan areas. Encouragingly, weakness in the energy corridor seems to have bottomed out, and we're beginning to see a stabilization process.

In terms of productivity, Hoteles City Express continues to maintain disciplined cost and expense control. During 3Q16, we achieved an Adjusted EBITDA margin of 34.8% despite opening 15 new hotels over the last twelve months. The strengthening of cost and expense control initiatives at our hotels and at the operating company are also beginning to show positive results, and represent a foundation for gradual improvement in profitability.

Our development plan continues to progress well, with 15 hotels opened since 3Q15. Our goal is to open 8 to 12 new properties by the end of this calendar year. Our target to have between 123 to 127 hotels by the end of 2016 remains intact, in line with the target we announced at the beginning of the year.

We will continue working to consolidate our position as one of the fastest growing and most profitable companies in our industry, focusing on modernity, innovation, warmth and excellence in service."

Conference Call Details:

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

Conference Replay will be available for 30 days:   
U.S.: 1-877-344-7529/ International: 1-412-317-0088
Passcode: 10094402

About Hoteles City Express:

Hoteles City Express is 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 seeking a high value price ratio. With 115 hotels located in Mexico, Costa Rica, Colombia and Chile, Hoteles City Express operates four distinct brands: City Express, City Express Plus, City Express Suites and City Express Junior, 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 is covered by the following financial institutions and analysts:  Actinver (Pablo Duarte), Bank of America Merrill Lynch (Carlos Peyrelongue), Citigroup (Dan McGoey), 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: www.cityexpress.com/en/investors    

Disclaimer: The information presented in this report contains certain forward-looking statements and information regarding Hoteles City Express, S.A.B. de C.V. and its subsidiaries (jointly, "the Company"), which are based on the understanding of its management, as well as assumptions and information currently 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 or current achievements of the Company to be materially different with respect to any future result, performance or accomplishment of the Company that might be included, expressly or implicitly, within such forward-looking statements, including, among other things: changes in general economic and/or political conditions, governmental and commercial changes at the global level and in the countries in which the Company does business, changes in interest rates and inflation, exchange rate volatility, changes in business strategy and various other factors. If one or more of these risks or uncertainty factors should materialize, or if the assumptions used prove to be incorrect, actual results could differ materially from those described herein as anticipated, estimated or expected. The Company does not intend to assume, and does not assume any obligation whatsoever to update these forward looking statements.

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