FibraHotel (FIHO 12) Q2 2024 earnings summary

Executive summary

• Ended Q2 2024 with 85 hotels and 12,360 rooms after selling Gamma Guadalajara hotel for Ps. $135 million, above book value.

• Challenging market conditions with soft economic activity and investment led to slower hotel demand and margin compression due to labor cost pressures.

• Focus on diversified portfolio across brands, segments, and geographies, with ~50% resort/full service.

• Emphasis on attractive risk-adjusted returns, sustainability, and operational efficiency strategies.

• Management highlights strong balance sheet, prudent leverage, and experienced team.

Financial highlights

• Q2 2024 revenues were Ps. $1,364 million, up 6% year-over-year; EBITDA was Ps. $331 million with a 24.3% margin.

• Lodging contribution margin was Ps. $451 million (33.1% margin); net income was Ps. $102 million, down from Ps. $177 million in Q2 2023.

• FFO and AFFO for the quarter were Ps. $260 million and Ps. $166 million, respectively.

• Distribution of Ps. $108 million (Ps. $0.1375 per CBFI) approved for Q2 2024, annualizing to Ps. $0.55, a 10% increase over 2023.

• Net debt at quarter-end was Ps. $3,616 million; total debt Ps. $4,360 million; average cost of debt 9.7%.

Outlook and guidance

• Market conditions expected to remain challenging in Q3, but Q4 and winter 2024/2025 bookings look stronger.

• Focus remains on ADR growth above inflation, even at the expense of occupancy.

• Margin recovery and operational efficiency initiatives are medium- to long-term, with benefits expected more toward next year.

• Expected total 2024 distribution of Ps. $0.55 per CBFI, with two more quarterly payments planned.

• Management confident in portfolio value and operational excellence for continued growth.