MISSISSAUGA, ON, Feb. 21, 2018 /CNW/ - Temple Hotels Inc. ("Temple" or the "Company") (TSX: TPH) today reported its financial results for the year ended December 31, 2017. 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 year ended December 31, 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.
2017 KEY POINTS/HIGHLIGHTS
OPERATING RESULTS
Year Ended December 31 | |||
2017 |
2016 | ||
Total revenue |
$165,612 |
$162,236 | |
Hotel operating income |
$42,885 |
$44,548 | |
Provision for impairment |
($18,607) |
($104,850) | |
Net loss |
($23,033) |
($133,177) | |
Net loss per common share - basic and diluted |
($0.91) |
($9.81) | |
Cash flow provided by operating activities |
$11,873 |
$17,382 | |
Funds from operations |
$14,051 |
$11,640 | |
Per common share |
|||
? Funds from operations |
$0.55 |
$0.86 | |
Weighted average number of common shares |
25,348,718 |
13,573,459 | |
Occupancy |
62% |
59% | |
ADR |
$138.88 |
$139.81 | |
RevPar |
$85.70 |
$82.71 |
Operating Activities
Liquidity and Financing Activities
As of December 31, 2017, the unrestricted cash balance of Temple was $11.4 million and working capital was $3.8 million.
Investing Activities
The investing activities of Temple resulted in a net cash inflow of $5.4 million during 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 December 31, 2017, the Company was not in compliance with debt service covenants affecting seven mortgage loans (December 31, 2016 ? nine) in the aggregate amount of $109.3 million (December 31, 2016 ? $139.2 million). 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 Loss | ||||||
Year Ended | ||||||
December 31 | ||||||
2017 |
2016 |
Increase/ (Decrease) in Income | ||||
Revenue |
||||||
Room revenue |
$120,831 |
$117,692 |
$3,139 | |||
Other hotel revenue |
44,781 |
44,544 |
237 | |||
Total revenue |
165,612 |
162,236 |
3,376 | |||
Hotel operating costs |
122,727 |
117,688 |
(5,039) | |||
Hotel operating income |
42,885 |
44,548 |
(1,663) | |||
Interest expense |
28,609 |
32,121 |
3,512 | |||
Other expense (income) |
(1,236) |
(914) |
322 | |||
Share based compensation |
133 |
311 |
178 | |||
General and administrative expenses |
3,277 |
3,235 |
(42) | |||
Depreciation and amortization |
17,745 |
24,233 |
6,488 | |||
(5,643) |
(14,438) |
8,795 | ||||
Equity income on investment in hotel properties |
1,170 |
1,031 |
139 | |||
Provision for impairment |
(18,607) |
(104,850) |
86,243 | |||
Change in fair value of financial instruments: gain |
- |
90 |
(90) | |||
Deferred income tax recovery (expense) |
47 |
(15,010) |
15,057 | |||
Net loss and comprehensive loss |
($23,033) |
($133,177) |
$110,144 | |||
Per Common Share Results: |
||||||
Basic and diluted |
($0.91) |
($9.81) |
Hotel Revenue
Analysis of Total Hotel Revenues |
|||||||||||||||
Year Ended December 31 | |||||||||||||||
2017 |
2016 |
Increase/ (Decrease) | |||||||||||||
Same Property |
|||||||||||||||
Fort McMurray |
|||||||||||||||
Room revenue |
$ |
22,326 |
$ |
20,610 |
$ |
1,716 | |||||||||
Other hotel revenue |
1,342 |
2,139 |
(797) | ||||||||||||
$ |
23,668 |
$ |
22,749 |
$ |
919 | ||||||||||
Other Alberta |
|||||||||||||||
Room revenue |
$ |
17,058 |
$ |
17,749 |
$ |
(691) | |||||||||
Other hotel revenue |
18,150 |
18,116 |
34 | ||||||||||||
$ |
35,208 |
$ |
35,865 |
$ |
(657) | ||||||||||
Other Canada |
|||||||||||||||
Room revenue |
$ |
79,619 |
$ |
76,841 |
$ |
2,778 | |||||||||
Other hotel revenue |
25,260 |
24,251 |
1,009 | ||||||||||||
$ |
104,879 |
$ |
101,092 |
$ |
3,787 | ||||||||||
Total ? Same Property |
|||||||||||||||
Room revenue |
$ |
119,003 |
$ |
115,200 |
$ |
3,803 | |||||||||
Other hotel revenue |
44,752 |
44,506 |
246 | ||||||||||||
Total hotel revenue |
$ |
163,755 |
$ |
159,706 |
$ |
4,049 | |||||||||
Total ? Sold Property |
|||||||||||||||
Room revenue |
$ |
1,828 |
$ |
2,492 |
$ |
(664) | |||||||||
Other hotel revenue |
29 |
38 |
(9) | ||||||||||||
Total hotel revenue |
$ |
1,857 |
$ |
2,530 |
$ |
(673) | |||||||||
Room revenue |
$ |
120,831 |
$ |
117,692 |
$ |
3,139 | |||||||||
Other hotel revenue |
44,781 |
44,544 |
237 | ||||||||||||
Total hotel revenue |
$ |
165,612 |
$ |
162,236 |
$ |
3,376 |
During 2017, Same Property room revenue increased by $3.8 million or 3%, compared to 2016. The increase is comprised of a $2.8 million (4%) increase in the Other Canada portfolio and a $1.7 million (8%) increase in the Fort McMurray portfolio, offset by a $0.7 million (4%) decrease in the Other Alberta portfolio.
The increase in Same Property room revenue during 2017, compared to 2016, is largely due to an increase in occupancy and RevPar for the Other Canada segment and an increase in occupancy and RevPar for the Fort McMurray segment, as 2016 was negatively impacted by wildfires and mandatory evacuation, which led to a period of hotel closures due to the repair and remediation of properties in Fort McMurray, offset by unfavourable market conditions affecting oil?dependent markets in the Other Alberta segment.
Room Revenue Statistics
As disclosed in the following chart, for the year ended December 31, 2017, RevPar for the Same Property portfolio was $85.81, compared to $82.93 for the year ended December 31, 2016.
RevPar for Same Property portfolio results generally reflect increased occupancy levels across all regions as well as an increase in ADR within the Other Canada segment, partially offset by reduced ADR levels in the Fort McMurray and Other Alberta segments.
Room Revenue Statistics | ||||||||||||||||
Year Ended December 31 | ||||||||||||||||
2017 |
2016 | |||||||||||||||
Occ |
ADR |
RevPar |
Occ |
ADR |
RevPar | |||||||||||
Same Property |
||||||||||||||||
Fort McMurray |
48% |
$ |
138.35 |
$ |
65.92 |
39% |
$ |
152.99 |
$ |
60.29 | ||||||
Other Alberta |
52% |
$ |
120.09 |
$ |
61.98 |
51% |
$ |
125.42 |
$ |
64.39 | ||||||
Other Canada |
71% |
$ |
144.04 |
$ |
101.93 |
70% |
$ |
139.94 |
$ |
98.27 | ||||||
Total ? Same Property |
62% |
$ |
139.00 |
$ |
85.81 |
59% |
$ |
139.98 |
$ |
82.93 | ||||||
Sold Property |
60% |
$ |
131.42 |
$ |
79.01 |
57% |
$ |
133.03 |
$ |
75.70 | ||||||
Overall Portfolio |
62% |
$ |
138.88 |
$ |
85.70 |
59% |
$ |
139.81 |
$ |
82.71 |
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.
Other Hotel Revenue
In 2017, other hotel revenue in the Same Property portfolio increased by $0.2 million or 1%, compared to 2016, mainly comprised of an increase of $1.0 million from the Other Canada portfolio, partially offset by a decrease of $0.8 million from the Fort McMurray portfolio.
Notwithstanding the above, the Sheraton Red Deer was the most significant contributor to other hotel revenue in the Same Property portfolio during 2017, accounting for $13.9 million or 31% of other hotel revenue.
Operating Income and Profit Margin
Operating Income and Profit Margin |
|||||||||
Year Ended December 31 | |||||||||
Operating Income |
Operating Profit Margin | ||||||||
2017 |
2016 |
2017 |
2016 | ||||||
Same Property |
|||||||||
Fort McMurray |
$ |
8,298 |
$ |
10,010 |
35% |
44% | |||
Other Alberta |
4,986 |
5,782 |
14% |
16% | |||||
Other Canada |
29,118 |
28,149 |
28% |
28% | |||||
Total ? Same Property |
$ |
42,402 |
$ |
43,941 |
26% |
28% | |||
Sold Property |
483 |
607 |
26% |
24% | |||||
Total portfolio |
$ |
42,885 |
$ |
44,548 |
26% |
27% |
After accounting for the increase in total revenues and the increase in hotel operating costs, total operating income decreased by $1.7 million or 4% in 2017, compared to 2016, comprised of decrease of $1.5 million or 4% for the Same Property portfolio and a decrease of $0.1 million due to the Sold Property. The decrease in Same Property operating income reflects a $1.7 million, or 17%, decrease in operating income for the Fort McMurray segment and a $0.8 million, or 14%, decrease in operating income for the Other Alberta segment, offset by a $1.0 million, or 3%, increase in operating income for the Other Canada segment.
As disclosed in the preceding chart, the overall profit margin of the entire hotel portfolio decreased 1% from 27% to 26% for 2017 as compared to 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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