Operational and Financial Results: Third Quarter 2010

Operational and Financial Results:
Third Quarter 2010
Grupo Posadas, S.A.B. de C.V. & Subsidiaries
Mexico City, October 28, 2010
With respect to the same quarter of last year.
•
•
Systemwide same hotels RevPAR in pesos, increased 37% for South
America and 10% for Urban
We reserved all accounts receivables from NGA
Cash & short term investments reached $620.9 million
(US$49.6 million)
> Financial Highlights
Million pesos as
of September 30, 2010
Total Revenues
EBIT
EBITDA
Mayority Net Result
3Q10
1,714.6
51.8
164.4
(70.5)
%
% Variation
Accumulated
2010
%
% Variation
100
3
10
(4)
4.1
(71.0)
(42.8)
238.5
4,881.4
405.7
743.0
0.6
100
8
15
0
(5.0)
(29.4)
(18.7)
(99.6)
During the third quarter of 2010, we improved our
Nuevo Grupo Aeronáutico, S.A. de C.V. became ef-
operating results in our hotels system wide. RevPAR
fective. Posadas sold the totality of its holdings. The
(Revenue per available room) increased 5.2%, not-
transaction was executed for a symbolic value and,
withstanding the negative effects that local and in-
considering that since December 2008 such invest-
ternational news coverage about insecurity in Mexico
ment has been written off, this transaction did not
have.
have a negative effect in the balance sheet of Posadas.
Urban hotels which represent 81% of total rooms system wide continue to show a positive trend, reaffirm-
Posadas provided several services through its sub-
ing the stability of the business segment driven main-
sidiaries Konexo and Conectum amongst others, to
ly by local business travelers. We believe 15.5% of
Nuevo Grupo Aeronáutico, S.A. de C.V. and/or its sub-
the rooms we operate in urban destinations in Mexico
sidiaries (“NGA”), like reservations and ticket sales
are subjected to a violent environment. Those hotels
services, room rentals for crews and VTP program (all
have decreased occupancy by 1pp with respect to the
inclusive packages). For the six months ended in June
same period last year.
30, 2010, these services represented 3% of Posadas’s
total revenues and EBITDA.
Coastal hotels performed below the same period of
2009, with a decrease in RevPAR of 3.6%, mainly due
Due to the difficult financial situation of NGA, in the
to the further reduced flow of groups and conventions
last months Posadas did not receive payment for
to the coastal destinations.
these services, therefore, as of September 30, 2010,
the total amount of accounts receivables with NGA
On August 20, 2010, Posadas reported that the sale
($113.8 million) has been reserved through a charge
agreement of 30.4% of the capital stock it held in
against Corporate Expenses.
For more information please
contact:
Gerardo de Prevoisin
Tel.: (5255) 5326-6757
[email protected]
Results: Third Quarter 2010
•
2
If we exclude this effect, Posadas last twelve months EBITDA would have been US$94.8 million which would
have represented a 4% decrease against 3Q09.
In addition, on the last days of operations of NGA, a loan of $49 million was provided to NGA that as of Septemin the Other Expenses (Revenues) account.
Also, as of September 30, 2010, approximately $12 million expenses related to the personnel reduction from
the subsidiary that provided call center services to NGA were charged to the Other Expenses (Revenues) account.
If none of the above effects would have occurred, net income before taxes for the first nine months of 2010
would have been $175 million.
> Development
Our development plan is comprised of 39 hotels with approximately 5,216 rooms scheduled to open within the
next three years. These hotels are either under construction or have executed operating agreements. According to the development strategy of the Company, most of these hotels will be under management agreements.
Brands
Mexico
Hotels
Rooms
Fiesta Americana
Fiesta Inn
Caesar Park
Caesar Business
One hotels
Aqua
4
14
17
1
2,126
127
TOTAL
36
4,799
Southamerica
Hotels
Rooms
654
1,892
1
2
148
269
4
14
1
2
17
1
3
417
39
83%
14%
654
1,892
148
269
2,126
127
13
36
3
5
41
2
5,216
100
Posadas
0.5%
Leased
Managed
Other
Owned
99.5%
Openings LTM
One Reynosa Valle Alto
One Playa del Carmen Centro
One Puebla Finsa
FI Monterrey Tecnologico
CB Manaus Amazonas
Total
%
Total investment US $300 M
Room distribution by contract
3%
Total
Hotels
Rooms
No. of Rooms
135
108
126
201
229
799
Type
Managed
Managed
Managed
Managed
Managed
3
Results: Third Quarter 2010
ber 30, 2010 has also been fully reserved. This reserve was created with no effect to the Company’s EBITDA
> Owned & Leased Hotels
Urban
% Variation
Coastal
% Variation
3Q10 (QQ)
Average No. of Rooms
Average Daily Rate
Occupancy (Var. in pp)
REVPAR
9,272
1,071
61%
653
(2.9)
5.5
3.2
11.4
7,926
1,046
64%
667
(3.4)
6.6
4.6
14.9
1,346
1,279
45%
571
0.0
1.4
(4.5)
(8.0)
Accumulated 2010
Average No. of Rooms
Average Daily Rate
Occupancy (Var. in pp)
REVPAR
9,356
1,099
59%
646
(2.6)
(1.8)
6.6
10.7
8,010
1,052
61%
646
(3.0)
1.8
8.4
18.0
1,346
1,498
43%
649
0.0
(12.9)
(3.6)
(19.6)
Revenues for this segment represented 51% of total revenues in 3Q10; revenues increased 4.9% with a 5.5%
ADR (available daily rate) and 3.2pp increase in occupancy, respectively, resulting in a 11.4% increase in
RevPAR when compared to the same period of 2009, even considering a 2.9% reduction in the average number
of available rooms as two leased hotel contracts were not renewed as it was not convenient for the Company.
Urban hotels results showed a recovery when compared to 3Q09, with a decrease of 3.4% in the average
number of rooms available and a higher available daily rate of 6.6% and an increase in occupancy of 4.6pp
resulting in a 14.9% improvement in RevPAR.
Coastal hotels performed below last year despite a slight increase in the available daily rate of 1.4% partially
offset by a 4.5 pp decrease in occupancy which resulted in a 8.0% lower RevPAR against last year’s same
period, with the reduction in the number of groups and conventions attributable to the insecurity environment
reported.
New initiatives: Since August 2010, three hotels located in the southern region of Mexico (Cancun & Cozumel)
are being sold as “all inclusive” which includes room plus food and beverages, as of November 1st of 2010.
The hotels involved are the Live Aqua Cancun, FA Condesa Cancun and FA Cozumel Reef (total rooms 1,097).
With the new sales and marketing strategy the demand should be served accordingly with an improved profitability for these resorts.
4
Results: Third Quarter 2010
Total
% Variation
> Management
Total
% Variation
Urban
% Variation
Coastal
% Variation
18,992
1,042
59%
617
Accumulated 2010
Average No. of Rooms
Average Daily Rate
Occupancy (Var. in pp)
REVPAR
18,772
1,072
57%
613
3.1
5.1
0.1
5.2
2.3
0.1
3.9
7.5
16,098
999
60%
604
2.4
5.6
0.8
7.0
2,894
1,324
52%
686
7.2
3.7
(4.0)
(3.6)
15,878
1,006
59%
589
2.0
2.7
4.8
11.8
2,894
1,497
50%
748
4.2
(7.1)
(0.7)
(8.4)
Includes owned, leased and managed hotels.
Revenues for our Management business represented 26% of total revenues, increasing 9.6% with respect to 3Q09, despite that some businesses (Konexo and Conectum) did not generate any revenues
from sales for more than one month.
The average number of rooms operated increased 3.1% chainwide.
Hotel operations system wide recorded an overall improvement with an increase in ADR of 5.1% with
a marginal increase in occupancy of 0.1pp resulting in a 5.2% improved RevPAR.
Urban hotels performed better with a 5.6% improved ADR with a 0.8pp increase in occupancy resulting
in a RevPAR increase of 7.0%. It is worth mentioning that the RevPAR for the hotels in South America
improved 28% to contribute in an important manner to the overall performance.
By regions, same urban hotels as previous year performed as follows in occupancy: South America
increased12.7pp, within Mexico; central region that holds 31 hotels increased 9.3pp, while the northern, western and southern regions decreased as follows: 9.4pp, 1.9pp,and 2.7pp, respectively.
If we exclude the 12 urban hotels affected by the insecurity environment which are also located in the
northern region of Mexico, we would achieve an increase of 1pp in occupancy.
Coastal hotels showed a 7.2% increase in available rooms as half of the room capacity of a large hotel in
Cancun was shut down for maintenance improvements in the 3Q09. Nevertheless, ADR increased 3.7%
with a lower occupancy rate of 4pp the RevPAR decrease 3.6%. By region throughout Mexico, same
hotels performed as follows in occupancy: southern with four hotels and western regions decreased by
6.7pp and 1.0pp, respectively, while the north improved by 3.7pp besides having a low base.
During the last twelve months we opened five hotels for a total of 799 additional rooms, all under
Management agreements: One Reynosa Valle Alto, One Playa del Carmen Centro, One Puebla Finsa,
FI Monterrey Tecnológico and the Caesar Business Manaus Amazonas, eleventh of Posadas in Brazil.
Ampersand, Conectum and Konexo together represented 60% of total revenues and 57% of total contribution of our Management business.
Results: Third Quarter 2010
5
3Q10 (QQ)
Average No. of Rooms
Average Daily Rate
Occupancy (Var. in pp)
REVPAR
> Vacation Club & Other
Our other related businesses business line primarily includes the Fiesta Americana Vacation Club (FAVC) that
6
with a 3.1% decline in comparison to the same quarter of previous year, despite the lesser number of travelers to
all of Posadas resorts where an important number of membership sales are made and to the temporarily closing
of our sales facilities in Monterrey.
The Vacation Club business continues to show its strength at adverse situations.
It is worth mentioning that the contribution margin for this segment remains in the third quarter at a competitive
level of 26.9%, 1.7pp below the 3Q09.
> EBITDA
Our 3Q10 EBITDA was $164.4 million pesos which represents 9.6% of total revenues and a 42.7% decrease
against the same period of the previous year. Last twelve months EBITDA was US$85.6 million pesos, a 13%
decrease versus the same quarter of the previous year. It is worth noting that when excluding the extraordinary
items related to NGA, the EBITDA (LTM) would have been US$94.8 million, a 4% decrease versus the same
period of the previous year ,that compares favorably with the decreases of -10.8%, -11.4% and -15.8% for the
LTM ending on June 30, 2010, March 31, 2010 and December 31, 2009, respectively.
> Capital Expenditure
Capital expenditures for the quarter were $67 million pesos for hotel maintenance, corporate purposes and the
FA Vacation Club.
Results: Third Quarter 2010
represents 93% of this segment. Revenues for our Vacation Club and Other represented 23% of total revenues
> Comprehensive Financing Cost
Interest income
Accrued interest
Currency exchange fluctuations
Other financial costs (products)
Total Financing Cost
3Q10
3Q09
2010
2009
(4,341)
107,356
(20,159)
(40,639)
(2,221)
83,568
3,574
101,628
(15,005)
329,406
(58,506)
(83,221)
(20,348)
289,760
77,251
(57,437)
42,217
186,549
172,674
289,226
Figures in thousands of pesos.
Net interest coverage was 2.7 times or 3.0 times excluding accounts receivables with NGA at the end
of the quarter; 0.8 times or 0.5 times lower than the ratio observed at the end of 3Q09.
Currency exchange fluctuations and Other financial costs have benefited from the 7.3% appreciation
of the MXN versus the USD from 3Q09 to 3Q10.
With respect to the five contracts used to swap a floating peso note to a USD fix rate (CCS), as of
September 30, 2010, US$24 million in margin calls were posted, US$2 million less than in 2Q10 due
to the 1.2% appreciation of the MXN with respect to the USD during the third quarter of the year.
Moreover, the Company has met at all times the margin calls from its counterparts, which as of October 28, 2010 are approximately US$23 million in cash.
September 30, 2010
Indebtedness
Notional in
MXN ´000
Maturity
CCS in
USD ´000
SWAPS
IRS in
MXN ´000
Maturity
Concept:
Dual Currency Credit Facility (Tranche 1)
Certificados Bursatiles (Posadas 08)
16,675
834,720
15-Nov-10
4-Abr-13
79,045
16,675
15-Nov-10
4-Abr-13
Dual Currency Credit Facility (Tranche 4)
Certificados Bursatiles (Posadas 08)
13,708
677,858
16-Nov-10
4-Abr-13
1,332
65,773
16-Nov-10
4-Abr-13
Dual Currency Credit Facility (Tranche 7)
Bank Loan
13,500
267,429
12-Nov-10
25-Abr-13
1,281
25,518
12-Nov-10
25-Abr-13
TOTAL
1,823,891
172,950
>Net Majority Result
As a result of the above, net loss for the quarter was $70.5 million.
For the nine months of 2010 net profit of $0.6 million has been achieved.
16,675
7
Results: Third Quarter 2010
Item
>Financial Position
During the 3Q10, two committed lines of credit were executed and are currently drawn for an amount
of $180 million and US$20 million, respectively. In addition to these, another line of credit of $150
8
compensate the amount that has not been discounted from the receivables of our Vacation Club business, as we have done on a regular basis in the past.
Net Debt at the end of the quarter was US$424 million.
Net Debt to EBITDA at the end of the quarter was 4.95 times or 4.48 times excluding accounts receivables with NGA, which is 1.35 times or 0.88 times higher than the one observed at the end of 3Q09.
Net Debt mix was: 6.3% short term, 83% USD denominated and 74% fixed rate. The average maturity of the debt was 3.3 years and 9.8% was secured with real estate assets.
As of the date of this report, Grupo Posadas’s current ratings for the “9.25% Senior Notes 2015” and
Certificados Bursatiles (Peso Notes) POSADAS-08 are as follows:
Fitch: Issuer Default Rating (IDR) “B+” and local scale (Caval) “BBB+”, both with stable outlook.
Moody´s: global scale “B2” with stable outlook. On August 11, 2010 the corporate rating was placed
under review for downgrade.
S&P: global scale “B+” and local scale (Caval) “mxBBB”, both with stable outlook.
Results: Third Quarter 2010
million was also drawn. These resources have been used temporarily as cash balance of Posadas to
> Grupo Posadas as of September 30, 2010
Room Distribution
50%
Leased
3,016 rooms
Managed
Owned
35%
Brand
Aqua
Fiesta Americana
Fiesta Inn
Caesar Park
Caesar Business
FA Vacation Club
One Hotels
Others
Total
%
10,057 rooms
6,933 rooms
15%
Mexico
Hotels
Rooms
1
18
59
371
5,213
8,701
Brazil
Hotels
3
8
4
13
1
677
1,635
213
96
16,810
84%
11
Rooms
USA
Hotels
Argentina
Rooms
506
1,622
2,128
11%
Hotels Rooms
2
3
679
3
679
3%
2
Chile
Hotels
Rooms
247
247
1%
1
142
1
142
1%
Total
Hotels
Rooms
1
18
59
5
9
4
13
4
371
5,213
8,701
753
1,764
677
1,635
892
113
20,006
100%
9
Results: Third Quarter 2010
Currently, the Company operates 113 hotels and 20,006 rooms in the
most important and visited urban and coastal destinations in Mexico
(84% of total rooms), Brazil(11%), the United States(3%), Argentina(1%) and Chile(1%). Approximately 81% of rooms are in urban
destinations and 19% in coastal. Grupo Posadas operates under the following brands: Aqua, Fiesta Americana Grand, Fiesta Americana, Fiesta
Americana Vacation Villas, Fiesta Inn, One Hotels in Mexico and Caesar
Park, Caesar Business in Brazil, Argentina and Chile.
> Income Statement
(Million pesos as of September 30, 2010 and 2009)
Total revenues
3Q09
1,714.6
100.0
Revenues
871.6
Direct Cost
789.0
Var%
1,646.9
100.0
4.1
100.0
830.8
100.0
4.9
90.5
753.8
90.7
4.7
82.7
9.5
77.0
9.3
Revenues
449.4
100.0
410.2
Direct Cost
323.4
72.0
283.3
Contribution
126.0
28.0
Revenues
393.6
Direct Cost
287.7
Contribution
2010
4,881.4
2009
Var%
100.0
5,137.3
100.0
(5.0)
2,566.5
100.0
2,428.4
100.0
5.7
2,320.4
90.4
2,228.8
91.8
4.1
7.3
246.0
9.6
199.6
8.2
23.3
100.0
9.6
1,300.8
100.0
1,182.3
100.0
10.0
69.1
14.2
878.2
67.5
728.2
61.6
20.6
126.9
30.9
(0.7)
422.6
32.5
454.1
38.4
(6.9)
100.0
406.0
100.0
(3.1)
1,014.2
100.0
1,526.5
100.0
(33.6)
73.1
303.6
74.8
(5.2)
737.5
72.7
1,216.1
79.7
(39.4)
105.9
26.9
102.4
25.2
3.4
276.7
27.3
310.4
20.3
(10.9)
Corporate Expenses
150.2
8.8
19.0
1.2
689.5
202.3
4.1
49.8
1.0
306.4
Depreciation / amortization
112.6
6.6
109.0
6.6
3.4
337.3
6.9
339.5
6.6
(0.6)
0.0
0.0
0.0
0.0
na
0.0
0.0
0.0
0.0
na
405.7
8.3
574.9
11.2
Owned & Leased Hotels
Contribution
Management
FA Vacation & Others
Goodwill Amortization, net
Operating Profit
EBITDA
51.8
3.0
178.3
10.8
(71.0)
(29.4)
164.4
9.6
287.3
17.4
(42.8)
743.0
15.2
914.4
17.8
(18.7)
42.2
2.5
186.6
11.3
(77.4)
172.7
3.5
289.2
5.6
(40.3)
111.8
6.5
25.9
1.6
331.6
210.7
4.3
66.2
1.3
218.5
Result before Tax & Assoc. Co. (102.3)
(6.0)
(34.1)
(2.1)
199.7
22.3
0.5
219.5
4.3
(89.8)
0.0
0.6
0.0
26.9
2.0
0.0
1.3
0.0
45.0
Comprehensive Fin. Cost.
Other Expenses (Revenues)
Part. in result of Assoc. Co.
Result before Taxes
Income taxes
Deferred taxes
Other
Consolidated Net Result
Minority Interest
Net Majority Result
0.7
(101.5)
(5.9)
(33.5)
(2.0)
202.7
24.2
0.5
220.9
4.3
(89.0)
5.5
0.3
(3.3)
(0.2)
na
28.6
0.6
9.8
0.2
192.6
(39.5)
(2.3)
(11.0)
(0.7)
259.0
(0.4)
49.8
1.0
na
0.0
0.0
0.0
na
0.0
0.0
0.0
0.0
0.0
(67.5)
(3.9)
(19.2)
(1.2)
251.7
16.5
0.3
161.4
3.0
0.2
1.6
0.1
84.5
15.9
0.3
(1.9)
(20.8)
(1.3)
238.5
0.6
0.0
163.2
0.0
(70.5)
(4.1)
(20.8)
3.1
(89.8)
(0.0)
na
3.2
(99.6)
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.
posadas.com
10
Results: Third Quarter 2010
3Q10
> Consolidated Balance Sheet as of December 31st. 2009 &
2008
(million pesos)
(Million pesos as of September 30, 2010 and 2009)
Sep-10
ASSETS
Current
Cash & marketable securities
Notes & accounts receivables
Inventories
Other assets
Total current assets
Long term
Long term notes receivable
Other investments & Investments in
shares of subsidiaries and Assoc. Co.
Property and equipment, net
Intangible and deferred assets
Other long term assets
Total Assets
%
Sep-09
%
Var. (%)
620.9
1,766.0
105.2
76.0
2,568.2
4.6
13.2
0.8
0.6
19.2
589.8
1,507.6
161.2
115.4
2,373.9
4.4
11.1
1.2
0.9
17.5
5.3
17.1
(34.7)
(34.1)
8.2
877.5
6.5
901.3
6.7
(2.6)
493.2
8,814.7
641.7
0.0
3.7
65.8
4.8
0.0
285.5
9,474.9
502.7
0.0
2.1
70.0
3.7
0.0
72.8
(7.0)
27.7
0.0
13,395.2
100.0
13,538.4
100.0
(1.1)
LIABILITIES
Current
Suppliers
Bank loans
Stock market loans
Other current liabilities
Total current liabilities
Long term
Bank loans
Stock market loans
Other liabilities
Deferred credits and Other
479.6
358.8
0.0
1,365.8
2,204.1
3.6
2.7
0.0
10.2
16.5
461.4
802.5
0.0
1,388.3
2,652.2
3.4
5.9
0.0
10.3
19.6
3.9
(55.3)
na
(1.6)
(16.9)
597.4
4,750.2
2,063.3
87.0
4.5
35.4
15.4
0.6
1,507.2
2,732.7
1,437.3
252.4
11.1
20.2
10.6
1.9
(60.4)
73.8
43.6
(65.5)
Total Liabilities
9,702.1
72.4
8,581.9
63.4
13.1
STOCKHOLDERS EQUITY
Majority stockholders equity
Minority interest
Total
3,046.8
646.3
3,693.1
22.7
4.8
27.6
4,019.4
937.0
4,986.5
29.7
6.9
36.6
(24.2)
(31.0)
(25.5)
13,395.2
100.0
13,538.4
100.0
(1.1)
Total Liabilities & Stockholders Equity
Results: Third Quarter 2010
11
> Consolidated Balance Sheet
>Consolidated Cash Flow Statement
(Millon pesos as of September 30, 2010 and 2009)
12
Consolidated Net Income Before Taxes
+ (-) Items that do not require the use of cash
+ (-) Other items
24.2
(374.7)
(374.7)
2009
220.9
(214.2)
(214.2)
+ (-) Entries related to investments
+ Depreciation and amortization for the year
+ (-) Gain or loss on sale of property, plant and equipment
+ (-) Participation in associated and joint business
(-) Interest income
363.3
337.3
43.0
(2.0)
(15.0)
320.1
339.5
2.3
(1.4)
(20.3)
+ (-) Entries related with external financing
+ Accrued interest
+ (-) Other items
329.4
329.4
0.0
289.8
289.8
0.0
Cash generated (used) in operating activities
+ (-) Decrease (increase) in accounts receivable
+ (-) Decrease (increase) in inventory
+ (-) Decrease (increase) in other accounts receivables and other assets
+ (-) Increase (decrease) in supplier accounts
+ (-) Increase (decrease) in other liabilities
+ (-) Profit taxes paid or returned
(65.9)
106.8
(0.4)
(5.7)
(62.1)
(36.7)
(68.0)
41.6
92.2
23.1
(42.1)
(20.6)
(94.1)
83.1
(440.2)
0.0
(144.0)
0.0
15.0
(311.2)
127.0
3,138.4
0.0
71.5
(1,838.3)
(459.8)
(224.1)
(16.6)
(89.4)
(302.7)
(1.1)
(150.9)
(626.0)
0.0
(150.7)
0.0
20.3
(495.6)
(273.3)
448.6
0.0
252.7
(471.0)
(250.0)
(6.8)
(0.3)
(6.5)
(287.4)
(0.0)
47.3
Net increase (decrease) in cash and cash equivalents
(36.8)
(241.2)
Cash and equivalents at the beginning of period
Cash and equivalents at the end of period
657.8
620.9
830.9
589.8
Net cash from investment activities
(-) Stock investments of permanent nature
(-) Investment in property, plant and equipment
+ Dividends received
+ Interest received
+ (-) Other items
Net cash from financing activities
+ Bank financing
+ Stock market financing
+ Other financing, includes margin calls
(-) Bank financing amortization
(-) Stock market financing amortization
(-) Dividends paid
+ Premium on sale of shares
+ Contribution for future capital increases
(-) Interest expense
(-) Repurchase of shares
+ (-) Other items
Results: Third Quarter 2010
2010