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14.08.2015 23:20
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Temple Hotels Inc. Reports 2015 Second Quarter Results
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Canada NewsWire
WINNIPEG, Aug. 14, 2015
WINNIPEG, Aug. 14, 2015 /CNW/ - Temple Hotels Inc. ("Temple") (TSX: TPH) today reported its financial results for the quarter ended June 30, 2015. 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 quarter ended June 30, 2015, 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 share, average daily rate ("ADR"), and revenue per available room ("RevPAR") amounts.
Highlights
- Net operating income decreased by $1.3 million or 9% in Q2-2015 compared to Q2-2014, comprised of a $2.8 million decrease in operating income in the same property portfolio partially offset by $1.5 million attributable to new acquisitions.
- Net operating income for non-Alberta same properties increased by $0.7 million or 14% in Q2-2015 compared to Q2-2014, reflecting an increase in occupancy levels by 3 percentage points, a $1.48 increase in ADR (1.1%) and $5.19 increase in RevPAR (5.5%).
- The sale of Hotel Saskatchewan will close on September 1, 2015 and is expected to provide approximately $24.5 million of net cash proceeds that will be directed to the repayment of debt.
- The change in the dividend policy to a quarterly annual dividend will permit operating cash flows to be directed to additional debt repayment.
- The Board of Directors has strengthened Board governance by separating the role of the C.E.O. and Chairman. Mr. Chris Cahill assumes the role of Chairman and Mr. Arni Thorsteinson as C.E.O.
OPERATING RESULTS
| | Three Months Ended June 30 | Six Months Ended June 30 | |||||
| | 2015 ARIVA.DE Börsen-GeflüsterKurse
| 2014 | 2015 | 2014 | |||
| Total revenue | $47,896 | $47,495 | $91,453 | $87,408 | |||
| Operating income | $14,149 | $15,482 | $24,942 | $27,201 | |||
| Net loss | $(2,284) | $(34) | $(6,900) | $(2,331) | |||
| | | | | | |||
| Cash flow from operating activities | $6,787 | $7,127 | $9,963 | $9,692 | |||
| Funds from operations | $5,350 | $6,669 | $6,861 | $10,928 | |||
| Adjusted funds from operations | $4,213 | $5,642 | $4,664 | $8,861 | |||
| Per share | | | | | |||
| ‑ FFO | $0.13 | $0.16 | $0.17 | $0.27 | |||
| ‑ AFFO | $0.10 | $0.14 | $0.11 | $0.22 | |||
| | | | | | |||
| Occupancy | 66% | 68% | 62% | 66% | |||
| ADR | $144.34 | $152.74 | $143.91 | $151.10 | |||
| RevPAR | $94.67 | $103.74 | $89.80 | $100.28 | |||
Key Points
- In comparison to Q2-2014, operating income decreased by $1.3 million or 9% during Q2-2015, comprised of a $2.8 million decrease in operating income from the same property portfolio (properties acquired prior to January 1, 2014) partially offset by a $1.5 million increase in operating income from the six hotel properties acquired in 2014.
- The decrease in operating income from the same property portfolio continues to reflect the impact of lower oil prices on oil-dependent lodging markets in Fort McMurray and, to a lesser extent, properties located in other parts of Alberta. During Q2-2015, operating income from the Fort McMurray segment decreased by $1.9 million and operating income from the other Canada segment decreased by $0.9 million, compared to the same period in 2014.
- The decline in operating income from the Fort McMurray segment reflects a decrease in occupancy from 66% during Q2-2014 to 53% during Q2-2015. The decrease in occupancy reflects lower business activity in 2015 compared to more favourable hotel market conditions in the Q2-2014.
- The decrease in operating income from the other Canada segment mainly reflects a decrease in other hotel revenue of $0.8 million, which is mainly attributable to lower food and beverage revenues at the Sheraton Red Deer and, to a lesser extent, the Days Inn Lloydminster. The decrease in other hotel revenue is mainly the result of weakening economic conditions in Alberta.
- During Q2-2015, "Funds from Operations" (FFO) decreased by $1.3 million and "Adjusted Funds from Operations" (AFFO) decreased by $1.4 million, compared to Q2-2014. On a basic per share basis, FFO and AFFO decreased by $0.03 per share and $0.04 per share, respectively, compared to Q2-2014.
- Cash flow from operating activities decreased by $0.3 million during Q2-2015, compared to Q2-2014. After excluding working capital adjustments, cash flow from operating activities decreased by $1.5 million during Q2-2015, compared to Q2-2014.
Non-Alberta Properties
Net operating income for non-Alberta same properties increased by $0.7 million or 14% in Q2-2015 compared to Q2-2014, reflecting an increase in occupancy levels by 3 percentage points, a $1.48 increase in ADR (1.1%) and $5.19 increase in RevPAR (5.5%).
Sale of the Hotel Saskatchewan
On July 6, 2015, Temple announced the $38 million sale of the Hotel Saskatchewan. A gain on sale in the approximate amount of $5 million will be recorded in Q3-2015. The sale results from an unsolicited offer and is expected to provide net proceeds on closing of $17.0 million after the repayment of the existing first mortgage loan. The agreement also provides for the repayment to Temple by the purchaser of all capital expenditures incurred to the closing date. The aggregate net cash proceeds of approximately $24.5 million, including capital expenditure reimbursement, will be used to retire the revolving loan in full, to reduce debt and to improve working capital.
Dividends
In May 2015, Temple discontinued its monthly dividend in favour of a quarterly dividend policy of $0.025 per share ($0.10 annualized) and declared a dividend of $0.025 per share for the quarter ending September 30, 2015 to be paid on October 15, 2015. The change to the dividend was implemented to address the anticipated reduction in Temple's 2015 operating results as a result of a decline in oil prices.
In comparison to the per share AFFO of $0.35 for the trailing twelve month period ended June 30, 2015, the annualized dividend of $0.10 per share represents a payout ratio of 29% and, as a result; the reduced dividend will permit Temple to retain operating cash flow in order to improve working capital and reduce debt.
Capital Expenditures
With the sale of the Hotel Saskatchewan and the completion of major capital expenditure programs at three properties in 2015, capital expenditures during 2015 are expected to be substantially reduced compared to the prior year. It is anticipated that total capital expenditures for the remainder of 2015 will be approximately $7.0 million, comprised of $3.5 million of capital expenditures at the Hotel Saskatchewan which will be reimbursed at closing, $0.7 million of ongoing major capital expenditure at the Saskatoon Inn and $2.8 million of recurring capital expenditures.
Changes to the Board of Directors
At the June 30, 2015 annual and special meeting of the shareholders, three new directors were elected to the Board. The new directors include Mr. Chris Cahill, a corporate director with over 40 years of experience in the hotel industry; Mr. Rai Sahi, the chairman and CEO of Morguard Corporation; and Mr. Peter Aghar, the founder and president of Crux Capital Corporation. The Board of Directors has strengthened Board governance by separating the role of the C.E.O. and Chairman. Mr. Chris Cahill assumes the role of Chairman and Mr. Arni Thorsteinson as C.E.O.
Outlook
The sale of the Hotel Saskatchewan will permit Temple to repay debt and improve working capital. In addition, the reduction of the dividend and the completion of most major capital expenditure programs will permit Temple to further reduce debt and improve working capital.
Although weaker conditions are expected to persist in Alberta, the balance of the geographical markets in which Temple operates are generating growth in revenues and earnings this year. Lower gas prices and the declining value of the Canadian dollar are already attracting higher volumes of domestic and foreign guests at other hotels.
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Analysis of Net Income (Loss) | |||||||||||||||
| | Three Months Ended | | | Six Months Ended | | ||||||||||
| | | | | | Increase / | | | | | | Increase / | ||||
| | 2015 | | 2014 | | in Income | | 2015 | | 2014 | | in Income | ||||
| Revenue | | | | | | | | | | | | ||||
| | Room revenue | $ 35,307 | | $ 34,422 | | $ 885 Werbung Mehr Nachrichten zur Anleihe kostenlos abonnieren
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