Results 3 rd Quarter 2003

Transcription

1 Grupo Posadas, s, S.A. de C.V. & Subsidiaries October 28 th, 2003 Results 3 rd Quarter 2003 Total revenue and EBITDA increased by 10 and 12 % respectively Coastal hotels continue to improve, rates on urban hotels on recovery Hotel margins reflect the increase in insurance premiums as well as in electricity and gas costs Important increase in management division margins Relevant Figures Million pesos as of September 30th Q03 % Var. Real AA % as of September 2003 % Var. Real AA % Net Sales , Operating Profit (4) (14) EBITDA Majority Net Income (27) (3) ,595 Grupo Posadas Today Fiesta Americana Fiesta Inn Caesar Park Caesar Business Other Total Country Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Mexico 21 5, , ,756 USA , ,230 Brazil ,400 Argentina Total 21 5, , , ,559 % Country Urban Coastal Hotels Rooms Hotels Rooms Mexico 46 8, ,565 USA Brazil 7 1, Argentina ROOM DISTRIBUTION 15% Managed (5,002) Leased (2,230) 51% Total 59 10, ,272 % Owned (7,303) 34% For more information please contact: investorrelations@posadas.com.mx Oliver Iriarte Tel.: oiriarte@posadas.com.mx Cicialli Rivas Tel.: crivasm@posadas.com.mx

2 Consolidated Results Total Revenue Consolidated revenue increased 9.9% in the third quarter of 2003, due to the sustained increase in Vacation Club sales, which accounts for 22% of the total revenue of the Company. Additionally, management revenue increased 6.5%, due mainly to a higher number of operated rooms. Hotel revenue (owned plus leased hotels revenue) increased 0.8% in the quarter, showing a certain recover after decreases of 0.1% and 5% in the first and second quarters of 2003, respectively. 100% 80% 60% 40% 20% 0% Revenue by Business Unit Vacation Club Management Leased Owned 3Q03 3Q02 Vacation Ing Admon. Club y and Otros Management Negocios Ing Admon. y Otros Negocios 3Q02 3Q Vacation Club Management Millions of Pesos as of September 03 EBITDA and Operating Profit Although the EBITDA increases 12% in the quarter and the EBITDA margin increases 0.3 percentage points (pp), the operating margin dropped 1.4 pp to 9.9%, due mainly to a 26.1% increase in consolidated depreciation. As has been the case in prior quarters, this increase is due to the decision made by the Company to accelerate depreciation of the Explorean hotels which, due to the environmental conditions in which those hotels operate, suffer greater deterioration than the other hotels operated by the Company. We estimate that the effect of this accelerated depreciation will completely disappear by the first quarter of In the first nine months of 2003, the EBITDA shows a 1.5% increase, whereas operating income reflects a 14% decrease. The increase in EBITDA is due largely to the higher contribution of the management division, in line with the strategy of migrating toward an operating and service business model. This strategy is successfully being achieved with the Company s development capacity, as well as the efforts made throughout the year aiming at optimizing the cost structure of this division. Page 2

3 Owned Hotels Owned Hotels Total Urban Coastal % Var. Real % Var. Real % Var. Real 3Q03 Average No. of Rooms 9,089 (1) 7, ,926 (11) Average Daily Rate (2) Occupancy 60 (2) 61 (4) 58 4 REVPAR 488 (2) 471 (7) Accumulated Average No. of Rooms 9, , ,998 (8) Average Daily Rate 866 (2) 793 (5) 1,136 5 Occupancy 60 (0) 60 (1) 58 3 REVPAR 519 (3) 479 (7) Numbers shown include Owned and Leased Hotels Even when the average daily rate (ADR) at urban hotels has still not been restored to prior year levels in real terms, we observed an improvement in this quarter with respect to prior quarters. The lower ADR of 2% at urban hotels compares to the 8% and 5% decreases reported in the first and second quarter of this year, respectively. This analysis is valid given that urban hotels do not reflect a cyclical behavior throughout the year. In this sense, the Company continues to implement a series of strategies intended to recover ADR at urban hotels located in Mexico. Notwithstanding the reduction in the average number of rooms (derived from converting FA Cancun into a Vacation Club) and the hurricane season, occupation at coastal hotels increased 4 pp, and the ADR went up 7%. Consequently, REVPAR increased 15%, and gross operating income went up 20% as well. The commercial strategy in this line centered on attracting domestic tourism continues to give very positive results. This has become more evident at destinations such as Cancun and Los Cabos that traditionally relied on Northamerican tourism. On the other hand, just like in the first two quarters of the year, we estimate that the contribution margin of hotels was impacted by 2 pp. due to: i) an increase in the cost of energy sources (mainly electricity and gas) of the hotels due to the strong inflation in the public sector managed prices; and ii) an increase approximating 170% in insurance premiums of coverage against damages paid by the hotels as a result of the readjustment that has taken place in the insurance industry worldwide. Page 3

4 Management Management Total Urban Coastal % Var. Real % Var. Real % Var. Real 3Q03 Average No. Of Rooms 13, , ,716 (3) Average Daily Rate (2) 1,116 7 Occupancy 62 (1) 62 (3) 63 3 REVPAR 550 (1) 494 (6) Accumulated Average No. Of Rooms 13, , ,767 (2) Average Daily Rate 930 (1) 811 (5) 1,251 5 Occupancy 61 (0) 61 (1) 61 2 REVPAR 569 (2) 498 (6) Hotel management revenue increased 6.5%, mainly due to a 1% increase in available rooms and better results in coastal hotels. The foregoing was partly offset by a slight drop in the results of urban hotels. As was the case in owned hotels, chainwide coastal hotels increased their occupancy levels and REVPAR (13% increase). In US dollar terms, the ADR of these hotels show a 2% increase during the quarter. Consistent with the Company s strategy, the costs of this division decreased 15.8% in real terms in the quarter, due to savings in the marketing and reservations areas, within the Franchise Vicepresidency, as well as efficiencies achieved in the service areas belonging to the Hotel Operations Vicepresidency. Pursuant to the foregoing, we observed a substantial improvement in the margin of this division, by going from 27.0% to 42.3% in the quarter, as well as from 35.6% to 49.9% in the year. Page 4

5 Integral Financing Cost Item 3Q03 3Q02 as of September as of September Interest Earned (984) (4,462) (4,022) (7,579) Interest Paid 71,855 82, , ,531 Foreign Exchange Loss (Gain) 87,608 49,761 72, ,064 Gains from Monetary Position (39,272) (39,522) (77,908) (145,359) Total Financing Cost 119,207 87, , ,657 Interest paid on debt decreased 12.5% in the quarter, due to a lower weighted average cost by 1 pp, as well as a reduction of US$ 11M in the consolidated debt carried out in the period. In addition to the drop in market rates, the Company s lower funding cost has been achieved by using derivative instruments. The higher exchange loss is the result of the effect (on our debt) of a 5% depreciation of the peso against the dollar during the quarter, which compares with a 2.7% depreciation in 3Q02. During the quarter, the Company maintained a 68% average mix in its debt in US dollars and 32% in pesos. Debt Profile Item 3Q03 2Q03 1Q02 4Q02 3Q02 Total Debt (USD Million) USD denominated Debt (%) (Including hedging operations) Interest Coverage (times) Net Debt / EBITDA (LTM) 4.0 x 3.9 x 4.0 x 4.1 x 4.2 x Important Events Two new hotels were opened in the third quarter. The first hotel, the Fl Insurgentes Viaducto in Mexico City, Mexico, with 210 rooms under a leasing contract. In addition, the fourth Caesar Business hotel was opened in Botafogo, Rio de Janeiro, Brazil with 110 rooms under an operating contract. We expect to add four more hotels with a total of 602 rooms over the remainder of the year. Page 5

6 Development Plan Country Fiesta Americana Fiesta Inn Caesar Park Caesar Business Total Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Mexico , ,855 Brazil , ,767 Total , , ,622 % Distribution by contract Leased Managed Owned Total Investment US$ 380 M Posadas Third Parties 63% 9% 6% 28% 94% Openings Last 12 Months Hote l No. of Rooms Opening Date Type CB Sao Jose dos Campos 157 Jan-03 Managed FI Ciudad del Carmen 131 Feb-03 Managed FI Alameda 140 April-03 Leasing FI Orizaba 103 Jun-03 Managed FI Insuergentes 210 Sep-03 Leasing CB Botafogo 110 Sep-03 Managed Total 851 Grupo Posadas has specialized for more than 30 years in providing high quality hotel services aiming at covering the more specific needs of hotel guests. Currently, the Company operates 76 hotels and approximately 14,000 rooms in the most important and visited urban and coastal destinations in Mexico, the United States and South America. Grupo Posadas operates under the Fiesta Americana, Fiesta Americana Grand, Fiesta Americana Vacation Club, Fiesta Inn, Caesar Park, Caesar Business and The Explorean brands. Grupo Posadas shares are quoted and traded on the Mexican Stock Exchange since 1992 under the ticker names POSADASA & POSADASL; in addition, series A & L are quoted and traded in the U.S. in the PORTAL system under the ticker names GRPALP y GRPYP, respectively.

7 Financial Statements 3 rd Quarter 2003 Income Statement 3Q03 3Q02 as of September 2003 as of September 2002 (constant million pesos as of Var% Var% $ % $ % $ % $ % September 30th 2003) Total Revenue , , Owned Hotels Revenue (0.5) 1, , (5.5) Direct cost , , (3.4) Contribution (5.4) (11.0) Leased Hotels Revenue Direct cost Contribution (90.0) Hotel Management Revenue Direct cost (15.8) (17.2) Other expenses (revenue) Contribution Other Businesses Revenue Direct cost Contribution (8.8) Corporate expenses (25.0) Depreciation/amortization Goodwill amortization, net (0.2) (0.0) (3.0) (0.3) (92.5) (2.7) (0.1) (13.7) (0.5) (80.3) Operating Profit (3.8) (14.1) EBITDA Integral cost of financing (36.5) Other expenses (revenue) (79.7) (39.7) Extraordinary expenses (0.1) (0.0) (0.0) (0.0) (0.2) (0.0) na Profit Before Taxes (35.7) (3.8) (48.0) (5.6) ISR & PTU (31.0) Deferred taxes (28.6) (3.0) (23.9) (2.8) 19.7 (23.9) (0.8) (16.0) (0.5) 49.5 Part. in results of assoc. companies (46.7) (19.9) Net Income before Minority (24.2) (2.5) (48.6) (5.6) Minority Interest (67.2) (37.9) Net Majority Income (26.6) (2.8) (56.0) (6.5) ,594.9

8 Financial Statements 3 rd Quarter 2003 Consolidated Balance Sheet as of September 30th & 2002 (Constant million pesos as of September 30th. 2003) Sep-03 % Sep-02 % Var. (%) ASSETS Current Cash & marketable securities (5.5) Notes & accounts receivable Inventories (14.5) Other assets Total current assets 1, , Long-term Long-term notes receivable Long-term investments (36.4) Other investments (28.7) Prop. & Equip., net 7, , (0.6) Deferred assets Total Assets 9, , LIABILITIES Current Suppliers Short-term debt (36.9) Other current liabilities Total current liabilities 1, , (8.5) Long-term Long-term debt 3, , Other long-term liabilities (12.0) Deferred credits 1, , Total Liabilities 5, , Majority stockholders' equity 2, , Minority interest 1, , (2.4) Total stockholders' equity 4, , Total Liabilities & Stockholders' Equity 9, ,