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Temple Hotels Inc. Reports 2019 First Quarter Financial Results

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MISSISSAUGA, ON, May 3, 2019 /CNW/ - Temple Hotels Inc. ("Temple" or the "Company") (TSX:TPH) today reported its financial results for the three months ended March 31, 2019. 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, 2019, 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 2019 KEY HIGHLIGHTS

  • Subsequent to March 31, 2019, the Company completed a rights offering and issued 25,022,329 common shares at a price of $1.75 per common share for gross proceeds of $43.8 million.

  • Subsequent to March 31, 2019, the Company fully repaid the 7.25% Series E convertible debentures in the amount of $40.6 million, which will reduce annual interest expense by $2.9 million.

  • On March 11, 2019, the Company completed the sale of a 30% undivided interest in the Acclaim Hotel for gross proceeds of $6.5 million resulting in aggregate net cash proceeds of $1.8 million after deducting the assumption of first mortgage loan of $4.6 million. Prior to disposition, the Company paid down an aggregate balance of $7.0 million on a mortgage loan secured by the Acclaim Hotel.

  • Revenue decreased $2.7 million or 7% during the three months ended March 31, 2019 compared to 2018, due to a decrease in revenue within the Fort McMurray, Other Alberta and Other Canada portfolios of $1.5 million, $0.8 million and $0.4 million, respectively.

  • Hotel operating income decreased by $2.1 million or 28% during the three months ended March 31, 2019 compared to 2018, due to a decrease in hotel operating income within the Fort McMurray, Other Alberta and Other Canada portfolios of $1.1 million, $0.9 million and $0.1 million, respectively.

  • FFO decreased by $1.8 million during the three months ended March 31, 2019, compared to the three months ended March 31, 2018. On a basic per common share basis, FFO decreased by $0.07 per common share, compared to the first quarter of 2018.

  • Subsequent to March 31, 2019, the Sheraton Red Deer Hotel was rebranded to the Cambridge Red Deer Hotel & Conference Centre (the "Cambridge Red Deer").

  • On April 29, 2019, Temple announced that it has filed a rights offering circular for the subscription of up to 50,044,658 rights and gross proceeds of up to $37.5 million. A maximum of 25,022,329 common shares will be issued as each right will entitle the holder thereof to subscribe for one-half of a common share upon payment of the subscription price of $1.50 per common share.

OPERATING RESULTS


Three months ended March 31


2019


2018





Total revenue

$34,531


$37,211

Hotel operating income

$5,426


$7,547

Recovery of impairment

$1,228


-

Net loss

($4,891)


($4,708)





Cash flow provided by (used in) operating activities

($1,715)


$1,627

Funds from operations

($1,833)


($56)





Per common share




‑ FFO

($0.07)


-





Weighted average number of common shares

25,144,881


25,346,160





Occupancy

54%


57%

ADR

$132.92


$132.40

RevPar

$71.56


$75.93

 

Debt Covenants

At March 31, 2019, the Company was not in compliance with debt service covenants affecting seven mortgage loans in the aggregate amount of $103.8 million. The loan covenant breaches are expected to be resolved by debt refinancings, loan modification agreements and/or a waiver of the covenant requirements. Subsequent to March 31, 2019, the Company received a waiver in regard to one mortgage loan with an aggregate principal balance of $14.5 million.

Room Revenue Statistics

As disclosed in the following chart, for the three months ended March 31, 2019, RevPar for the Same Property portfolio was $71.56, compared to $75.93 for the three months ended March 31, 2018. RevPar for Same Property portfolio results generally reflect decreased occupancy levels at the Company's Fort McMurray and Other Alberta segments. 

Room Revenue Statistics



Three Months Ended March 31



2019


2018



Occ



ADR


RevPar


Occ



ADR


RevPar

Same Property

















Fort McMurray


31%


$

138.75


$

42.29


43%


$

137.49


$

58.81

Other Alberta


51%


$

118.24


$

60.44


53%


$

116.64


$

61.55

Other Canada


65%


$

135.78


$

87.53


65%


$

135.63


$

87.65

Overall Portfolio


54%


$

132.92


$

71.56


57%


$

132.40


$

75.93

 

The above chart reflects 70% of the operating results for the Acclaim Hotel commencing March 11, 2019.

Other Hotel Revenue

During the first quarter of 2019, other hotel revenue in the Same Property portfolio decreased by $0.9 million or 8%, compared to the first quarter of 2018, comprised of a decrease of $0.6 million or 13%, from the Other Alberta properties and a decrease of $0.3 million or 5%, from the Other Canada portfolio, partly offset by an increase of $0.1 million or 21%, from the Fort McMurray portfolio. The decline in Other Alberta was primarily at the Cambridge Red Deer, due to excessive cold weather.

Notwithstanding the above, the Cambridge Red Deer Hotel & Convention Centre was the most significant contributor to other hotel revenue in the overall portfolio during the first quarter of 2019, accounting for $3.3 million or 32% 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


2019



2018


2019


2018

Fort McMurray

$

257


$

1,395


7%


27%

Other Alberta


493



1,359


6%


15%

Other Canada


4,676



4,793


21%


21%

Total portfolio

$

5,426


$

7,547


16%


20%

 

After accounting for the increase in total revenues and the increase in hotel operating costs, total operating income decreased by $2.1 million or 28% during the first quarter of 2019, compared to the first quarter of 2018, comprised of decreases of $1.1 million, $0.9 million and $0.1 million for the Fort McMurray, Other Alberta and Other Canada segments, respectively.

As disclosed in the preceding chart, the overall profit margin of the entire hotel portfolio declined from 20% in the first quarter 2018 to 16% in the first quarter of 2019.

ABOUT TEMPLE

Temple is a hotel investment company with hotel properties located across Canada. Temple is listed on the Toronto Stock Exchange under the symbol TPH (common shares). 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.

View original content: http://www.newswire.ca/en/releases/archive/May2019/03/c4035.html

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