MISSISSAUGA, ON, May 8, 2017 /CNW/ - Temple Hotels Inc. ("Temple"
or the "Company") (TSX: TPH) today reported its financial results
for the three months ended March 31,
2017 ("first 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 months ended March 31, 2107, 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.
Q1 2017 KEY POINTS/HIGHLIGHTS
- Hotel operating income increased by $0.3
million or 4% during the three months ended March 31, 2017 compared to 2016, primarily due to
an increase in hotel operating income within the Other Canada and
Fort McMurray portfolios of
$0.4 million and $0.1 million, respectively, partly offset by a
decrease in hotel operating income within the Other Alberta
portfolio of $0.2 million.
- The increase in hotel operating income primarily reflects
higher ADR and occupancy levels within the Other Canada segment as
well as higher occupancy levels within the Fort McMurray segment. In the first quarter of
2017, the occupancy levels of the Other Canada and Fort McMurray segments increased by three and
six percentage points to 64% and 38%, respectively, in comparison
to the first quarter of 2016. Reduced ADR levels within the Other
Alberta and Fort McMurray segments
partially offset the increase in NOI as a result of the
unfavourable market conditions which continue to affect
oil-dependent markets in Alberta.
- FFO increased by $1.0 million
during the three months ended March 31,
2017, compared to the three months ended March 31, 2016. On a basic per common share
basis, FFO increased by $0.02 per
common share, compared to the first quarter of 2016.
- During the three months ended March 31,
2017, Temple used a portion of the proceeds of the
December 2016 rights offering to
repay the Series C convertible debentures and to repay $10.7 million of mortgage debt on two
properties.
OPERATING RESULTS
|
Three months ended
March 31
|
|
2017
|
|
2016
|
|
|
|
|
Total
revenue
|
$36,239
|
|
$35,766
|
Hotel operating
income
|
$7,399
|
|
$7,085
|
Provision for
impairment
|
$ -
|
|
($43,877)
|
Net loss
|
($5,568)
|
|
($68,378)
|
Net loss per common
share - basic and diluted
|
($0.04)
|
|
($0.88)
|
|
|
|
|
Cash flow used in
operating activities
|
($3,941)
|
|
($405)
|
Funds from
operations
|
($215)
|
|
($1,249)
|
|
|
|
|
Per common
share
|
|
|
|
‑ Funds from
operations
|
$ -
|
|
($0.02)
|
|
|
|
|
Weighted average
number of common shares
|
152,028,790
|
|
77,893,011
|
|
|
|
|
Occupancy
|
54%
|
|
52%
|
ADR
|
$132.79
|
|
$136.36
|
RevPar
|
$72.26
|
|
$70.71
|
Operating Activities
- Occupancy and ADR – The increase in hotel operating
income primarily reflects higher ADR and occupancy levels within
the Other Canada segment as well as higher occupancy levels within
the Fort McMurray segment. In the
first quarter of 2017, the occupancy levels of the Other Canada and
Fort McMurray segments increased
by three and six percentage points to 64% and 38%, respectively, in
comparison to the first quarter of 2016. Reduced ADR levels
within the Fort McMurray and Other
Alberta segments partially offset the increase in NOI as a result
of the unfavourable market conditions which continue to affect
oil-dependent markets in Alberta.
- Cash Used in Operating Activities ‑ Cash used in
operating activities increased by $3.5
million during the first quarter of 2017, compared to the
first quarter of 2016. Excluding working capital adjustments, cash
provided by operating activities increased by $1.2 million, compared to 2016.
- Funds from Operations ("FFO") ‑ During the first
quarter of 2017, FFO increased by $1.0
million compared to the first quarter of 2016. On a basic
per common share basis, FFO increased by $0.02 per common share, compared to the first
quarter of 2016. The increase in FFO mainly reflects an increase in
operating income and a decrease in interest expense, due to the
factors noted above.
- Net Loss ‑ Temple completed the first quarter of 2017
with a net loss of $5.6 million,
compared to a net loss of $68.4
million during the same period in 2016. The decrease in net
loss is mainly due to a decrease in provision for impairment of
$43.9 million, a decrease in deferred
income tax expense of $16.8 million,
a decrease in depreciation of $1.2
million, a decrease in interest expense of $0.6 million, and an increase in hotel operating
income of $0.3 million. On a per
common share basis, the net loss was $0.04 for the first quarter of 2017, compared to
$0.88 during the first quarter of
2016.
Liquidity and Financing Activities
As of March 31, 2017, the
unrestricted cash balance of Temple was $25.5 million and working capital was
$19.2 million.
- During the fourth quarter of 2016, Temple completed a rights
offering at $0.6769 per common share
for net proceeds of $49.6 million,
resulting in the issuance of 73,866,155 common shares. The
completion of the rights offering enabled Temple to reduce
indebtedness and improve its working capital position.
- On January 3, 2017, the Company
fully repaid upon maturity the Series C convertible debentures in
the amount of $22.8 million.
- During January 2017, the Company
repaid two mortgage loans at two properties in the amount of
$10.7 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 outflow of $1.0 million during
the first quarter of 2017. Investing activities primarily reflect
cash outflows related to capital expenditures on hotel
properties
ANALYSIS OF OPERATING RESULTS
Analysis of Net
Loss and Comprehensive Loss
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31
|
|
2017
|
|
2016
|
|
Increase/
(Decrease) in
Income
|
Revenue
|
|
|
|
|
|
|
Room
revenue
|
$25,382
|
|
$25,062
|
|
$320
|
|
Other hotel
revenue
|
10,857
|
|
10,704
|
|
153
|
|
Total
revenue
|
36,239
|
|
35,766
|
|
473
|
|
|
|
|
|
|
Hotel operating
costs
|
28,840
|
|
28,681
|
|
(159)
|
Hotel operating
income
|
7,399
|
|
7,085
|
|
314
|
|
|
|
|
|
|
Interest
expense
|
7,285
|
|
7,879
|
|
594
|
Interest and other
income
|
(118)
|
|
(107)
|
|
11
|
Share based
compensation
|
35
|
|
88
|
|
53
|
General and
administrative expenses
|
727
|
|
808
|
|
81
|
Depreciation and
amortization
|
5,204
|
|
6,394
|
|
1,190
|
|
(5,734)
|
|
(7,977)
|
|
2,243
|
|
|
|
|
|
|
Equity income on
investment in hotel properties
|
131
|
|
161
|
|
(30)
|
Provision for
impairment
|
-
|
|
(43,877)
|
|
43,877
|
Change in fair value
of financial instruments: gain
|
-
|
|
67
|
|
(67)
|
Deferred income tax
recovery (expense)
|
35
|
|
(16,752)
|
|
16,787
|
|
|
|
|
|
|
Net loss and
comprehensive loss
|
($5,568)
|
|
($68,378)
|
|
$62,810
|
|
|
|
|
|
|
Per Common Share
Results:
|
|
|
|
|
|
|
Basic and
diluted
|
($0.04)
|
|
($0.88)
|
|
|
Hotel Revenue
Analysis of Total
Hotel Revenues
|
|
|
Three Months Ended
March 31
|
|
|
2017
|
|
|
2016
|
|
|
Increase/ (Decrease)
|
Same
Property
|
|
|
|
|
|
|
|
|
Fort
McMurray
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
4,519
|
|
$
|
4,141
|
|
$
|
378
|
|
Other hotel
revenue
|
|
361
|
|
|
593
|
|
|
(232)
|
|
$
|
4,880
|
|
$
|
4,734
|
|
$
|
146
|
Other
Alberta
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
4,430
|
|
$
|
4,822
|
|
$
|
(392)
|
|
Other hotel
revenue
|
|
4,672
|
|
|
4,813
|
|
|
(141)
|
|
$
|
9,102
|
|
$
|
9,635
|
|
$
|
(533)
|
Other
Canada
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
16,433
|
|
$
|
16,099
|
|
$
|
334
|
|
Other hotel
revenue
|
|
5,824
|
|
|
5,298
|
|
|
526
|
|
$
|
22,257
|
|
$
|
21,397
|
|
$
|
860
|
Total
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
25,382
|
|
$
|
25,062
|
|
$
|
320
|
|
Other hotel
revenue
|
|
10,857
|
|
|
10,704
|
|
|
153
|
|
Total hotel
revenue
|
$
|
36,239
|
|
$
|
35,766
|
|
$
|
473
|
During the first quarter of 2017, room revenue increased by
$0.3 million or 1%, compared to the
first quarter of 2016. The increase is comprised of a $0.4 million (9%) increase in the Fort McMurray portfolio and a $0.3 million (2%) increase in the Other Canada
portfolio, partly offset by a $0.4
million (8%) decrease in the Other Alberta portfolio.
The increase in Same Property room revenue during the first
quarter of 2017, compared to the first 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 Other Alberta
segment.
Room Revenue Statistics
As disclosed in the following chart, for the three months ended
March 31, 2017, RevPar for the
overall portfolio was $72.26,
compared to $70.71 for the three
months ended March 31, 2016.
RevPar for Same Property portfolio results generally reflect
increased occupancy levels in the Fort
McMurray and Other Canada segments, offset by reduced ADR
levels in the Other Alberta segment.
Occupancy at the Fort McMurray
properties increased during the first quarter of 2017 compared to
the first quarter of 2016, but is still impacted by the
unfavourable market conditions in Alberta. Over time, it is expected that those
involved in the rebuilding will create demand for accommodation,
putting upward pressure on occupancy rates.
Room Revenue
Statistics
|
|
|
Three Months Ended
March 31
|
|
|
2017
|
|
2016
|
|
|
Occ
|
|
|
ADR
|
|
RevPar
|
|
Occ
|
|
|
ADR
|
|
RevPar
|
Same
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fort
McMurray
|
|
38%
|
|
$
|
138.92
|
|
$
|
52.63
|
|
32%
|
|
$
|
151.15
|
|
$
|
47.70
|
Other
Alberta
|
|
48%
|
|
$
|
122.89
|
|
$
|
58.32
|
|
48%
|
|
$
|
130.26
|
|
$
|
62.80
|
Other
Canada
|
|
64%
|
|
$
|
134.29
|
|
$
|
85.38
|
|
61%
|
|
$
|
134.16
|
|
$
|
82.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall
Portfolio
|
|
54%
|
|
$
|
132.79
|
|
$
|
72.26
|
|
52%
|
|
$
|
136.36
|
|
$
|
70.71
|
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
During the first quarter of 2017, other hotel revenue increased
by $0.2 million or 1%, compared to
the first quarter of 2016, comprised of an increase of $0.5 million from the Other Canada portfolio,
partly offset by a $0.2 million
decrease from the Fort McMurray
portfolio and a $0.1 million decrease
from the Other Alberta properties.
Notwithstanding the above, the Sheraton Red Deer was the most
significant contributor to other hotel revenue in the overall
portfolio during the first quarter of 2017, accounting for
$3.6 million or 33% of other hotel
revenue.
Operating Income and Profit Margin
Operating Income
and Profit Margin
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31
|
|
Operating
Income
|
|
Operating Profit
Margin
|
Same
Property
|
|
2017
|
|
|
2016
|
|
2017
|
|
2016
|
Fort
McMurray
|
$
|
1,446
|
|
$
|
1,315
|
|
30%
|
|
28%
|
Other
Alberta
|
|
1,315
|
|
|
1,531
|
|
14%
|
|
16%
|
Other
Canada
|
|
4,638
|
|
|
4,239
|
|
21%
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
Total
portfolio
|
$
|
7,399
|
|
$
|
7,085
|
|
20%
|
|
20%
|
After accounting for the increase in total revenues and the
increase in hotel operating costs, total operating income increased
by $0.3 million or 4% during the
first quarter of 2017, compared to the first quarter of 2016. The
increase is comprised of an increase of $0.4
million or 9% in operating income for the Other Canada
segment and a $0.1 million or 10%
increase in operating income for the Fort
McMurray segment, partially offset by a decrease of
$0.2 million or 14% for the Other
Alberta segment.
As disclosed in the preceding chart, the overall profit margin
of the entire hotel portfolio was unchanged at 20% for the first
quarter of 2017 and 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.D, 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.