FibraHotel (FIHO 12) Q3 2024 earnings summary

Executive summary

• Q3 2024 results were below expectations due to soft economic activity, weak investment, and higher labor costs, leading to margin compression.

• RevPAR grew 7.3% year-over-year, driven by a 12.2% ADR increase, but occupancy fell by 278 basis points.

• Fiesta Americana Condesa Cancun underperformed due to seasonality, reduced flights, and hurricane impacts, with a 14% RevPAR decrease in USD and revenue at MXN 48 million for the quarter.

• Portfolio comprised 85 hotels with 12,360 rooms as of September 30, 2024, across 26 Mexican states.

• Announced signing of The Ritz-Carlton Cancun, a LEED-certified luxury hotel opening in 2027.

Financial highlights

• Quarterly revenues reached MXN 1.3 billion, up 2.3% year-over-year.

• Adjusted EBITDA was MXN 303 million (23.3% margin), down from MXN 324 million last year.

• Lodging contribution margin for managed hotels was 27%, down from 28.5% a year ago; total lodging contribution was MXN 402 million (30.9% margin), down 6.4% year-over-year.

• AFFO was MXN 143 million, down 9.5% year-over-year; FFO was MXN 240 million.

• Distribution per CBFI for the quarter was MXN 0.1375, totaling MXN 0.55 for the year, a 10% increase year-over-year.

Outlook and guidance

• Market conditions are expected to remain similar in Q4, but forward bookings for Q1 2025 are stronger and more in line with expectations.

• Margin improvement initiatives and operational efficiencies are underway, with significant gains expected only in the medium to long term.

• Management continues to prioritize ADR growth over occupancy and expects to fund the Ritz-Carlton project mainly with existing cash flow.

• Long-term strategy execution and new luxury developments, including The Ritz-Carlton, are underway.