Fibra Inn Announces Consolidated Results for the Fourth Quarter 2014

Deutsche Bank Mexico, S.A., Institución de Banca Múltiple, Trust Division F/1616 or Fibra Inn (BMV:FINN13) (“Fibra Inn” or “the Company”), a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, today announced its non-audited third quarter results for the period ended December 31, 2014 (“4Q14”). These results were prepared in accordance with International Financial Reporting Standards (“IFRS”) and are stated in nominal Mexican pesos (Ps.).

Fourth Quarter 2014 Financial Highlights

  • Fibra Inn concluded 4Q14 with 30 hotels under operation, 1 hotel in the process of acquisition and 3 developments, representing 5,718 rooms, of which 645 are under construction.
  • In terms of Same-Store Sales for the 22 comparable hotels(1)in the portfolio:
    • Room revenues: Ps. 220.2 million; an increase of 14.1% compared to the Ps. 192.9 million in 4Q13.
    • Occupancy: 59.4%; a decrease of 2.3 percentage points (“pp”) due to an increase of 8.5% of additional rooms of the comparable properties. Excluding this effect, the occupancy would have been 64.4%.
    • Average Daily Rate (“ADR”): Ps. 1,044.8.0; an increase of 9.3%.
    • Revenue per Available Room (“RevPAR”): Ps. 620.0; an increase of 5.2%, including the effect of 8.5% increase in the number of available rooms following the expansion of the comparable hotel portfolio. Excluding the addition of rooms, RevPAR would be equal to Ps. 673.
  • Total Revenue: reached Ps. 256.7 million, broken down as follows:
    • Room Revenue: Ps. 241.2 million (94.0% of total Fibra revenues).
    • Rental Revenue: Ps. 15.5 million (6.0% of total Fibra revenues).
  • Net Operating Income (“NOI”)(2): Ps. 95.0 million, an increase of 35.6% compared to the Ps. 70.0 million reported in 4Q13 and a 9.5% increase compared with Ps. 86.7 million in 3Q14. This represented a margin of 37.0% over Fibra revenues, representing a decrease of 1.7 pp versus 3Q14.
  • Earnings before interest, taxes, depreciation and amortization (“EBITDA”): Ps. 13.8 million, which include the accounting effect of expenses related to the acquisition of 11 hotels during 2014, equal to Ps. 64.1 million. Excluding such expenses, adjusted EBITDA was Ps. 77.9 million, a 33.7% increase compared to Ps. 74.8 million in 3Q13.
  • Net Income: Ps. 20.3 million loss. Excluding acquisition-related expenses, net income would be equal to Ps. 43.8 million, a 30.9% and 70.2% increase compared to 3Q14 and 4Q13, respectively.
  • FFO(3): Ps. 79.6 million, which represented an increase of 19.5% compared to Ps. 66.6 million during 4Q13.
  • Distributions to Holders: Ps. 74.6 million, a 21.0% increase compared to Ps. 60 million in 3Q14 and a 24.4% increase compared to Ps. 61.7 million in 4Q13. Distribution was equivalent to Ps. 0.1707 per CBFI(4) using a larger base of CBFIs, equal to 437 million after the follow-on that took place in November 2014. This represents a dividend yield of 4.2%(4).
  • Recent Events:
    • Fees: The acquisition fee was eliminated and the advisory fee was modified to 0.75% over the gross asset value, effective October 17, 2014
    • Acquisitions: two Casa Grande hotels (Chihuahua and Delicias), four Microtel Inn & Suites by Wyndham hotels (Chihuahua, Culiacan, Toluca, Cd. Juarez) and one Crowne Plaza Hotel (Monterrey). After the close of 4Q14, a purchase agreement was signed to acquire Mexico Guadalajara Andares hotel.
    • Equity Increase: Ps. 2,832.0 million were raised via an equity increase of equity of a CBFI subscription. The Control Trust has 16.7% and the float is 83.3%.
    • New Directors: The reassignment of management: Victor Zorrilla, Chairman of the Technical Committee, Oscar Calvillo as Chief Executive Officer and Joel Zorrilla as Vice-President of Corporate Strategy. In addition, the hiring of Fernando Rocha as the Director of Acquisitions and Development and Rafael de la Mora as Director of Hotel Operations. The position of Chief Financial Officer is currently under recruitment.
  • As of December 31, 2014:
    • Cash: Ps. 1,108.7 million.
    • Bank Debt increased to Ps. 100.0 million, which represents a loan-to-value equal to 1.3% as well as a coverage ratio for the debt service of 8.0x.
    • Equity: Ps. 7,188.5 million.
  • CAPEX during the quarter was equal to Ps. 8.2 million.
1 Of the 31 hotels of the total portfolio, 22 are comparable, excluding hotels under agreement: México Plaza Guadalajara Andares, Crowne Plaza Monterrey Airport, two Casa Grande hotels Chihuahua and Delicias, four Microtel Inn & Suites by Wyndham Chihuahua, Culiacan, Toluca and Ciudad Juarez, as these hotels were part of the portfolio for less than 45 days during the quarter, and as well as the recently-constructed Aloft Guadalajara hotel with operations of less than 12 months.
2 NOI is the calculation of the Fibra’s revenue (rent and other revenue) minus operating expenses for administration, maintenance, lodging, utilities, fees, royalties, marketing and promotion, as well as property tax and insurance.
3 FFO is calculated as the net result plus the non-monetary charges (depreciation and executive equity-based compensation).
4 Calculated using 437,019,542 CBFIs outstanding on December 31, 2014.

Statement from the President of the Technical Committee

“During 2014, we have prepared Fibra Inn for the upcoming years. We have a solid and seasoned management team as well as the resources necessary to reach approximately 60 hotels by the conclusion of 2016, and we are ready to continue growing via acquisitions that add value to our portfolio,” stated Victor Zorrilla, President of the Technical Committee of Fibra Inn.

For the full version of this report, please visit http://www.fibrainn.mx/en/financial-information.php

Contacts:

In Monterrey, Mexico:
Fibra Inn
Lizette Chang, IRO, 52 1 (81)1778-5926
lchang@fibrainn.mx
or
In New York:
i-advize Corporate Communications, Inc.
Maria Barona / Melanie Carpenter
212-406-3691/92
mbarona@i-advize.com / mcarpenter@i-advize.com
Twitter: @fibrainn

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