Le Lézard
Classified in: Tourism and vacations, Business
Subject: ERN

Temple Hotels Inc. Reports 2017 Third Quarter Financial Results



MISSISSAUGA, ON, Nov. 9, 2017 /CNW/ - Temple Hotels Inc. ("Temple" or the "Company") (TSX: TPH) today reported its financial results for the three months ended September 30, 2017 ("third quarter"). The following comments in regard to the financial position and operating results of Temple should be read in conjunction with Management's Discussion & Analysis and the financial statements for the three and nine months ended September 30, 2017, which may be obtained from the Temple website at www.templehotels.ca or the SEDAR website at www.sedar.com.

Monetary data in the tables of this press release, unless otherwise indicated, are in thousands of Canadian dollars, except for per common share, average daily rate ("ADR"), and revenue per available room ("RevPar") amounts.

Q3 2017 KEY POINTS/HIGHLIGHTS

OPERATING RESULTS


Three Months Ended
September 30


Nine Months Ended
September 30


2017


2016


2017


2016









Total revenue

$46,106


$45,280


$125,734


$123,001

Hotel operating income

$15,190


$16,052


$35,306


$36,133

Provision for impairment

($235)


-


($235)


($43,574)

Net income (loss)

$3,355


$1,390


$495


($67,968)

Net income (loss) per common share - basic and diluted

$0.13


$0.11


$0.02


($5.23)









Cash flow provided by operating activities

$8,585


$6,572


$10,933


$11,142

Funds from operations

$8,170


$7,863


$14,628


$11,268









Per common share








? Funds from operations

$0.32


$0.61


$0.57


$0.87









Weighted average number of common shares

25,351,516


13,007,808


25,344,724


12,996,435









Occupancy

70%


69%


63%


61%

ADR

$145.52


$143.94


$139.65


$140.98

RevPar

$101.65


$99.32


$88.33


$85.50

 

 Operating Activities

Liquidity and Financing Activities

As of September 30, 2017, the unrestricted cash balance of Temple was $18.2 million and working capital was $12.1 million.

Investing Activities

As disclosed in the Statement of Cash Flows in the financial statements, the investing activities of Temple resulted in a net cash inflow of $9.3 million during the third quarter of 2017. Investing activities primarily reflect the proceeds from the sale of property and equipment and the cash distribution on equity investments, partially offset by cash outflows related to capital expenditures on hotel properties.

Debt Covenants

At September 30, 2017, the Company was not in compliance with debt service covenants affecting six mortgage loans (December 31, 2016 ? nine) in the aggregate amount of $93.9 million (December 31, 2016 ? $139.2 million). During the third quarter the Company refinanced a five-loan mortgage portfolio which included a $7.5 million pay down and a condition that the properties are not subject to any financial covenants during the first 12 months of the five year term. Management has been working with lenders throughout the year and the remaining loan covenant breaches are expected to be resolved by debt refinancings, loan modification agreements and/or a waiver of the covenant requirements.

ANALYSIS OF OPERATING RESULTS

Analysis of Net Income (Loss) and Comprehensive Net Income (Loss)






Three Months Ended


Nine Months Ended


September 30


September 30


2017


2016


Increase/
(Decrease)
in Income


2017


2016


Increase/
(Decrease)
in Income

Revenue













Room revenue

$36,119


$35,426


$693


$93,614


$91,005


$2,609


Other hotel revenue

9,987


9,854


133


32,120


31,996


124


Total revenue

46,106


45,280


826


125,734


123,001


2,733













Hotel operating costs

30,916


29,228


(1,688)


90,428


86,868


(3,560)

Hotel operating income

15,190


16,052


(862)


35,306


36,133


(827)













Interest expense

6,753


8,017


1,264


21,431


23,915


2,484

Other expense (income)

(71)


(73)


(2)


(1,847)


(256)


1,591

Share based compensation

37


70


33


103


243


140

General and administrative













expenses

905


812


(93)


2,511


2,485


(26)

Depreciation and amortization

4,415


6,136


1,721


13,383


18,639


5,256


3,151


1,090


2,061


(275)


(8,893)


8,618

Equity income on investment in













hotel properties

439


435


4


981


913


68

Provision for impairment

(235)


-


(235)


(235)


(43,574)


43,339

Change in fair value of financial













instruments: gain

-


-


-


-


90


(90)

Income tax recovery (expense)

-


(135)


135


24


(16,504)


16,528

Net income (loss) and













comprehensive income (loss)

$3,355


$1,390


$1,965


$495


($67,968)


$68,463

Per Common Share Results:












Basic and diluted

$0.13


$0.11




$0.02


($5.23)



 


Hotel Revenue

Analysis of Total Hotel Revenues


Three Months Ended September 30


Nine Months Ended September 30





Increase/





Increase/


2017


2016


(Decrease)


2017


2016


(Decrease)

Same Property


















Fort McMurray



















Room revenue

$

6,239


$

6,811


$

(572)


$

17,290


$

15,701


$

1,589


Other hotel revenue


277



455



(178)



962



1,681



(719)


$

6,516


$

7,266


$

(750)


$

18,252


$

17,382


$

870

Other Alberta



















Room revenue

$

4,702


$

4,780


$

(78)


$

13,109


$

13,922


$

(813)


Other hotel revenue


3,503



3,501



2



12,812



12,991



(179)


$

8,205


$

8,281


$

(76)


$

25,921


$

26,913


$

(992)

Other Canada



















Room revenue

$

24,691


$

23,228


$

1,463


$

61,387


$

59,417


$

1,970


Other hotel revenue


6,202



5,890



312



18,317



17,294



1,023


$

30,893


$

29,118


$

1,775


$

79,704


$

76,711


$

2,993



















Total ? Same Property



















Room revenue

$

35,632


$

34,819


$

813


$

91,786


$

89,040


$

2,746


Other hotel revenue


9,982



9,846



136



32,091



31,966



125


Total hotel revenue

$

45,614


$

44,665


$

949


$

123,877


$

121,006


$

2,871



















Total ? Sold Property



















Room revenue

$

487


$

607


$

(120)


$

1,828


$

1,965


$

(137)


Other hotel revenue


5



8



(3)



29



30



(1)


Total hotel revenue

$

492


$

615


$

(123)


$

1,857


$

1,995


$

(138)



















Total



















Room revenue

$

36,119


$

35,426


$

693


$

93,614


$

91,005


$

2,609


Other hotel revenue


9,987



9,854



133



32,120



31,996



124


Total hotel revenue

$

46,106


$

45,280


$

826


$

125,734


$

123,001


$

2,733

 

During the third quarter of 2017, Same Property room revenue increased by $0.8 million or 2%, compared to the third quarter of 2016. The increase is comprised of a $1.5 million (6%) increase in the Other Canada portfolio, partially offset by a $0.6 million (8%) decrease in the Fort McMurray portfolio and a $0.1 million (2%) decrease in the Other Alberta portfolio.

The increase in Same Property room revenue during the third quarter of 2017, compared to the third quarter of 2016, is largely due to an increase in occupancy and RevPar for the Other Canada segment, partially offset by the continued unfavourable market conditions affecting oil?dependent markets in the Fort McMurray and Other Alberta segments. 

Room Revenue Statistics

As disclosed in the following chart, for the third quarter ended September 30, 2017, RevPar for the Same Property portfolio was $102.26, compared to $99.95 for the third quarter ended September 30, 2016.

For the nine months ended September 30, 2017, RevPar for the Same Property portfolio was $88.54, compared to $85.64 for the nine months ended 2016.

RevPar for the Same Property portfolio generally reflects increased occupancy levels in the Fort McMurray and Other Canada segments, offset by reduced ADR levels in the Fort McMurray and Other Alberta segments.

Occupancy at the Fort McMurray properties increased during the third quarter of 2017 compared to the third quarter of 2016, but is still impacted by the unfavourable market conditions in Alberta.

Room Revenue Statistics



Three Months Ended September 30






2017







2016





Occ



ADR


RevPar


Occ



ADR


RevPar

Same Property

















Fort McMurray


54%


$

138.20


$

73.98


53%


$

154.00


$

81.46

Other Alberta


57%


$

117.90


$

67.78


58%


$

119.75


$

68.91

Other Canada


81%


$

154.64


$

125.38


80%


$

147.76


$

118.09

Total ? Same Property


70%


$

145.75


$

102.26


69%


$

144.12


$

99.95


















Sold Property


55%


$

130.46


$

71.13


54%


$

135.60


$

73.42


















Overall Portfolio


70%


$

145.52


$

101.65


69%


$

143.94


$

99.32


















Room Revenue Statistics



Nine Months Ended September 30






2017







2016




Occ



ADR


RevPar


Occ



ADR


RevPar

Same Property

















Fort McMurray


49%


$

138.65


$

68.50


39%


$

157.97


$

61.53

Other Alberta


53%


$

120.11


$

63.69


54%


$

125.26


$

67.41

Other Canada


72%


$

145.23


$

105.08


71%


$

141.23


$

100.55

Total ? Same Property


63%


$

139.83


$

88.54


61%


$

141.18


$

85.64


















Sold Property


60%


$

131.42


$

79.01


60%


$

133.70


$

79.72


















Overall Portfolio


63%


$

139.65


$

88.33


61%


$

140.98


$

85.50

 

The above chart does not reflect the operating results for the Cortona Residence, which is 100% leased at an annual net rent of $2.1 million.

Operating Income and Profit Margin

Operating Income and Profit Margin







Three Months Ended September 30


Nine Months Ended September 30


Operating Income


Operating Profit Margin


Operating Income


Operating Profit Margin


2017


2016


2017


2016


2017


2016


2017


2016

Same Property















Fort McMurray

$2,605


$4,238


40%


58%


$6,982


$8,204


38%


47%

Other Alberta

1,191


1,243


15%


15%


3,767


4,446


15%


17%

Other Canada

11,298


10,444


37%


36%


24,061


22,937


30%


30%

Total ? Same Property

$15,094


$15,925


33%


36%


$34,810


$35,587


28%


29%

















Sold Property

$96


$127


20%


21%


$496


$546


27%


27%

















Total portfolio

$15,190


$16,052


33%


35%


$35,306


$36,133


28%


29%

 

After accounting for the increase in total revenues and the increase in hotel operating costs, operating income decreased by $0.9 million or 5% during the third quarter of 2017, compared to the third quarter of 2016. The decrease is comprised of a decrease of $1.6 million or 39% for the Fort McMurray segment and a decrease of $0.1 million or 4% for the Other Alberta segment, partially offset by an increase of $0.8 million or 8% in operating income for the Fort McMurray segment.

For the first nine months of 2017, operating income decreased by $0.8 million or 2% compared to the first nine months of 2016, which was comprised of a decrease of $1.2 million or 15% for the Fort McMurray segment, a decrease of $0.7 million or 15% for the Other Alberta segment and a decrease of $0.1 million for the Sold Property segment, partially offset by an increase of $1.1 million or 5% in operating income for the Fort McMurray segment.

As disclosed in the preceding chart, the overall profit margin of the entire hotel portfolio was at 33% for the third quarter of 2017 compared to 35% for the third quarter of 2016. For the nine months ended September 30, 2017, the overall profit margin was 28%, compared to 29% for the nine months ended September 30, 2016.

ABOUT TEMPLE

Temple is a growth oriented hotel investment company with hotel properties located across Canada. Temple is listed on the Toronto Stock Exchange under the symbols TPH (common shares), TPH.DB.E and TPH.DB.F (convertible debentures). The primary long?term investment objectives of the Company are to yield stable and growing cash flows and to maximize the long?term share value of the Company through the active management of its assets, accretive acquisitions, and the performance of value?added capital improvement programs on selected properties, as deemed appropriate. For further information on Temple, please visit our website at www.templehotels.ca.

This press release contains certain statements that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements.

SOURCE Temple Hotels Inc.


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