(In millions pesos as of March 31, 2000) Accumulated

Transcription

1 Stock Indicators A L Price per Share $ 6.40 $ 5.40 EPS(L12M) $ 0.77 $ 0.77 Book Value Per Share $ 6.55 $ 6.55 P/E P/BV A L A L Posadas Market FV/ EBITDA % 240% 220% 200% 180% 160% 140% 120% 100% 80% 60% Summary of Financial Information Posadas IPC (In millions pesos as of March 31, 2000) Accumulated 2000 % 1999 Total Assets 8, , % Total Liabilities 4, , % Net Worth 4, , (1)% Majority Net Worth 3, , (7)% Net Sales % Operating Income % EBITDA % Majority Net Income (53%) Room Distribution Fiesta Americana Fiesta Inn Caesar Park Others Total Urban Coastal Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms México 20 5, , , , ,044 USA , , Brazil Argentina Total 20 5, , , , , ,704 %

2 Grupo Posadas, S.A. de C.V. & Subsidiaries Income Statement as of March 31, 2000 & 1999 (Constant Thousands of Ps as of March 31 st, 2000) Year 2000 Year 1999 Variation (%) 1st Quarter % 1st Quarter % Total Revenue 831, , Hotels - Revenue 698, , Direct Cost 475, , (23.6) - Contribution 222, , Management - Revenue 121, , Direct Cost 62, , Others (Gains) and Loses. (242) (0.2) Na Net - Contribution 58, , Others Businesses - Revenue 12, , (46.6) - Direct Cost 22, , Contribution (9,235) (71.9) 1, Na Corporate Expenses 19, , (13.6) Depreciation and Amortization 55, , (12.4) Goodwill Amortization, Net (4,554) (0.5) (3,543) (0.5) 28.5 Operating Profit 201, , Integral Cost of Financing (42,717) (5.1) (249,641) (34.7) (82.9) Other (gains) and loses 1, , Extraordinary items Profit Before Taxes 242, , (44.5) ISR and PTU 11, , (9.5) Deferred Taxes 10, NA Earning from affiliates (179) (0.0) NA Net Profit before Minority 221, , (48.1) Minority Interest 28, , (64.2) Mayority Profit 193, , (52.9) Terms Variations 2

3 Grupo Posadas, S.A. de C.V. & Subsidiaries Consolidated Balance Sheet as of March 31, 2000 & 1999 (Constant Thousands of Ps as of March 31st 2000) Variation (%) % % ASSETS Current - Cash and marketable Sec. 107, ,101 6 (78) - Notes & Accounts 351, , receivable - Inventories 160, ,016 3 (40) - Other current assets 50, , Total 670, ,098, (39) - Long-term notes receivable 57, , Long-term investments 80, ,704 1 (8) - Other investments 55, ,321 1 (14) - Property and Equipment, net 7,189, ,892, Deferred Assets 586, , Total Assets 8,640, ,586, LIABILITIES Current Suppliers 185, , Bank Loans 221, ,779 4 (40) Other current liabilities 281, , Total 688, ,388 9 (6) Long-term debt 3,150, ,350, (6) Other liabilities 40, ,486 1 (41) Deferred Credits 461, , Total liabilities 4,340, ,246, STOCKHOLDER S EQUITY Capital stock-issued 1,908, ,058, (7) Reserve for reacq. Of shares 91, ,589 1 (3) Accumulated earnings 1,531, , Accum. Effect of restatement (663,881) (8) (186,213) (2) (257) Net income 193, ,781 5 (53) Total 3,060, ,274, (7) Minority interest 1,239, ,065, Total stockholder s equity 4,299, ,339, (1) Total Liabilities and Equity 8,640, ,586,

4 Note: All of the variations referred to in this document have been calculated in real terms. During the first quarter of 2000, the company continued reaping the benefits of marketing and financial efforts undertaken in recent years. We believe Posadas has adequately positioned itself to gain maximum advantages from current economic and market conditions. In the marketing area, Fiesta Americana launched during the month of April a nationwide advertising campaign under the slogan Fiesta Americana is a pleasure, an expression that symbolizes the firm commitment established by each Fiesta Americana property with its guests, endeavoring to make each stay a pleasure. The campaign is comprised of two versions of TV spots, one of them aimed at business travelers, and the other at the leisure travel segment. At the same time, billboards will be used in various cities throughout the country, as well as light boxes at the Mexico City, Guadalajara and Monterrey airports. In the area of business development, the projects being planned for the South American market continue posting steady advances. With a more stable currency, a downward inflationary trend and an optimistic outlook for foreign investments, the Brazilian market offers a favorable outlook for the development and growth of hotel properties. On the other hand, the company has intensified efforts to attract new management contracts, and various negotiations are about to be finalized to operate new hotels in Mexico. The Fiesta Americana Grand Los Cabos, opened last September in its first stage, and which represented a significant investment for Posadas, has already started fulfilling the company s expectations as it delivered an important contribution to first quarter 2000 operating results. Total Revenue The company s total revenue continues showing an upward trend, especially when measured in dollar terms. The increase in sales is a reflection of the country s improved macroeconomic conditions, and also of the favorable results achieved by the company s marketing strategies. The Chainwide occupancy rate reached 66%, 3 percentage points (pp) over the first quarter 1999 rate. Properties in coastal destinations, boosted by Cancun hotels, made a significant contribution to the overall increase by hiking their own occupancies by 5 pp. Meanwhile, urban hotels increased their occupancy rate by 3 pp, thanks chiefly to occupancy increases posted by the Caesar Park and Fiesta Americana chains, as well as by urban properties in the United States. 4

5 Operating Profit and EBITDA Operating profit advanced by 6% in the first quarter of 2000 over the same period last year. Measured in dollar terms, the growth for the period was 19%. Even though we observed efficiencies regarding margins for urban properties and in the management division, the consolidated operating margin decreased by 2 pp, mainly due to a contraction in coastal property margins as a result of the peso s overvaluation. In peso terms, earnings before interest expense, income taxes, depreciation and amortization (EBITDA) grew by 7%, with a growth of 23% in dollar terms during the period, while the EBITDA margin went from 33% to 30%. This decrease is also the result of smaller margins posted by coastal properties and, to a lesser degree, of the inclusion of new hotels under lease agreements within the business mix. For its part, EBITDA growth is being generated by the strong performance of Fiesta Inn properties, which increased their contribution by 18% in the first quarter Owned Hotels Total Urban Coastal 1st Quarter 2000 Avarage No. Of rooms 7, , , Avarage Daily Rate 938 (9) 873 (7) 1,109 (12) Occupancy REVPAR (3) During the first quarter, owned hotels revenue and contribution increased by 19% and 11%, respectively, due basically to two factors: first, the favorable performance of Fiesta Americana and Fiesta Inn urban hotels; and second, a tangible improvement of Caesar Park hotels. With regard to Fiesta Americana urban hotels, they increased their occupancy rates by 7 pp, and their REVPAR (revenue per available room) by 2%. In this respect, the new positioning of the Fiesta Americana Reforma property, which contributes with more than 600 rooms to the chain, has brought until now very positive results. Rate reductions in this hotel have been more than compensated by higher occupancy rates and REVPAR. During the first quarter, the occupancy rate increased by more than 20 pp, which resulted in a REVPAR increase of 14% over the first quarter of The Fiesta Americana Hermosillo and Fiesta Americana Guadalajara hotels showed the same upward tendency. Both these properties contribute a combined 600 rooms, as their margins of contribution to consolidated results advanced by 5 pp for Hermosillo and 6 pp for Guadalajara. 6

6 In Brazil, the impact on hotel operations from early 1999 s devaluation of the real is, apparently, a thing of the past. Caesar Park hotels showed a significant recovery in occupancy and room rates during the first quarter. The chain showed an increase in occupancy rates of 5 pp over the first quarter of 1999 while average room rates, measured in dollar terms, advanced by 4%. This combination brought as a result an increase of 13% in REVPAR. The positive results yielded by the Caesar Park at Ipanema, along with a slight recovery of the Caesar Park in Sao Paulo in remodelling, brought a significant contribution to the overall performance. Properties in the United States (with more than 750 rooms) once again turned in a good quarter. In dollar terms, these properties were able to uphold their average rates, while increasing their occupancy rate by 7 pp during the first quarter. This combination resulted in an increase of 11% in REVPAR during the period. Total revenues in dollar terms, without considering new openings, advanced by 10% during the quarter. Management Total Urban Coastal 1 st Quarter 2000 Avarage no. Of rooms 12, , ,536 9 Avarage Daily Rate 997 (10) 882 (6) 1,230 (15) Occupancy REVPAR 660 (5) 555 (2) 913 (9) Across the entire chain, average room rates decreased 10% in peso terms due to the reduction in rates expressed in peso terms of properties in the United States and South America, as a result of the Mexican peso s appreciation. However, rates in dollar terms achieved an average increase of 4% when compared to the first quarter of This average room rate increase, along with an average occupancy rate hike of 3 pp, resulted in a 10% increase in REVPAR room rates measured in dollar terms. As a consequence, revenue posted by the hotel management division rose by 11.0% in the first quarter This growth is attributed mainly to three sources: the chain-wide improvement in occupancy rates mentioned previously; the additional fees earned from the 8 hotel openings undertaken in the past 12 months; and fees earned by the Caesar Park chain during the first quarter It is worth mentioning that this chain was not yet earning fee revenues during the first quarter of Even when we are still experiencing strong competition in room rates in the Cancun area, this situation has been more than compensated by significant increases in average occupancy rates at the company s three properties there (Fiesta Americana Condesa Cancun, Fiesta Americana Cancun and Fiesta Americana Grand Coral Beach). Consequently, REVPAR shows an important recovery during the first quarter 2000 when compared to the first three months of In fact, as the accompanying chart shows, REVPAR is at 1997 levels, when the peso was also overvalued. 7

7 Similarly, operating profit per room (GOP per room) for the three Cancun properties were at their highest first-quarter level of the past four years. ADR (USD) 195 Ocuppancy 86% REVPAR (USD) 152 GOP/room (th. USD) Average Daily Rate Occupancy 84% 82% 80% 78% 76% 74% REVPAR GOP/Room Q97 1Q98 1Q99 1Q00 72% 136 1Q97 1Q98 1Q99 1Q Other Businesses Revenues from other businesses compare unfavorably with those registered in the first quarter of Even when Porto Ixtapa turned in important sales of villas and lots, Arcano was not able to equal sales posted during last year s first quarter. It is pertinent to mention that this is a highly volatile business that currently accounts for less than 3% of total revenues. Integral Cost of Financing 1T00 1T99 Interest Expense 112, ,728 Interest Earned (8,552) (171,272) Exchange losses (gains) (61,215) (100,041) Monetary Position (85,310) (109,056) CIF (42,717) (249,641) The steady appreciation of the peso, which advanced by 2.8% during the first quarter 2000, generated a positive integral cost of financing of 42.7 million pesos. This figure is in comparison with a profit of million pesos for the first quarter of 1999, which was the result of earnings obtained through hedging operations. Even when the global cost of the company s dollar-denominated debt has grown because of the upward trend of international interest rates, the decrease in paid interest is the result of the previously mentioned appreciation of the peso, as well as the lower cost of servicing the peso-denominated debt (26% in 1Q99 against 17% in 1Q00). D-4 Bulletin On January 1, 2000, the regulatory guideline Boletin D-4 went into effect, establishing new criteria for the measurement, recognition and disclosure of deferred taxes. In its operating results covering the first quarter 2000, Posadas already recognizes the effects of this guideline as a 288 million 8

8 pesos reduction of equity under the item excess (shortfall) in restatement of stockholders equity. Likewise, recognition of the guideline affected net majority earnings, which reached million pesos (0.41 pesos per share) in the first quarter CAPEX, Debt Investments in fixed assets during the first quarter 2000 were approximately 6 million dollars, of which 50% were earmarked for projects under development, and the rest for already existing hotels. These capital outlays have been financed mainly through internally generated flows. With this, Posadas is in line with its strategy of improving its leverage and interest coverage ratios throughout the year In dollar terms, the company s total outstanding debt from December 1999 through March 2000 was reduced by 6%, while the global cost of debt servicing received the benefit of a drop in interest rates applicable to the peso-denominated debt (12% of the total debt). The average debt maturity terms, is approximately 4 years. Other Relevant Events In early January 2000, the company opened the Fiesta Inn Monterrey Centro hotel. This property operates under a management contract, and has 231 rooms. During the first quarter, we signed an agreement to lease a new hotel in Tijuana with 127 rooms, which will be converted from a Holiday Inn to a Fiesta Inn. In February, Posadas announced the signing of an agreement with Delta Air Lines, establishing an alliance between the Fiesta Americana, Fiesta Inn and Caesar Park hotel chains, and Delta s SkyMiles frequent traveler program, for the benefit of the two companies clients. Openings Last 12 Months Hotel No. of Opening Date Type rooms Residence Inn McAllen 78 April 99 Owned Fiesta Inn Puebla La Noria 154 April 99 Mgmt. Fiesta Inn Veracruz 140 June 99 Magmt FA Grand Los Cabos 250 Sept. 99 Owned Fiesta Inn Torreón 146 Sept. 99 Leased Fiesta Americana Puebla 152 Oct. 99 Leased Fiesta Inn Ciudad Juárez 165 Oct. 99 Owned Fiesta Inn Monterrey Centro 231 Jan. 00 Mgmt TOTAL 1,316 9

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