MISSISSAUGA, ON, Aug. 9, 2016 /CNW/ - Temple Hotels Inc. ("Temple"
or the "Company") (TSX: TPH) today reported its financial results
for the three months ended June 30,
2016 ("second 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 six months ended
June 30, 2016, 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.
Q2 2016 KEY POINTS/HIGHLIGHTS
- On June 30, 2016, the Board of
Directors (the "Board") announced that it is conducting a
comprehensive review of strategic alternatives available to best
enhance the long-term interests of Temple and all of its
stakeholders. The review process is continuing and there can be no
assurance that the Board's process will result in any specific
action. Temple does not intend to disclose further developments
unless and until the Board approves a specific action or otherwise
concludes the review of strategic alternatives.
- During the second quarter of 2016, Temple's properties located
in Fort McMurray were evacuated
and were placed under mandatory evacuation due to the wildfires
that impacted the region. Temple's Fort
McMurray portfolio consists of 891 rooms in nine properties.
As at June 30, 2016, eight of the
nine Fort McMurray properties had
been reopened. One property, Radisson Hotel & Suites, sustained
greater fire, smoke and water damage, remains closed, and a full
assessment and action plan for repair and remediation is being
implemented.
- The events in Fort McMurray
will result in an insurance claim under the Company's business
interruption policy. Recoveries under this policy are only
recognized at the earlier of when proceeds have been received or
confirmation has been given by the insurer of the amount of any
settlement. Because of the complex and uncertain nature of the
settlement negotiations process, the Company has not recognized any
provision in the financial statements for the three months ended
June 30, 2016.
- Net operating income decreased by $1.9
million or 13% during the three months ended June 30, 2016 compared to 2015, primarily due to
decreases of net operating income within the Fort McMurray portfolio of $1.5 million, and by $0.5
million, attributable to the sale of Hotel Saskatchewan in
the third quarter of 2015.
- Other Canada Same Property segment net operating income
increased by $0.3 million, or 4%,
during the three months ended June 30,
2016 compared to 2015.
- FFO decreased by $0.7 million and
AFFO decreased by $0.6 million during
the three months ended June 30, 2016,
compared to the three months ended June 30,
2015. On a basic per common share basis, FFO and AFFO
decreased by $0.07 per common share
and $0.05 per common share,
respectively, compared to the second quarter of 2015.
OPERATING RESULTS
|
Three Months Ended June
30
|
|
Six Months Ended June
30
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Total
revenue
|
$41,955
|
|
$47,896
|
|
$77,721
|
|
$91,453
|
Hotel operating
income
|
$12,996
|
|
$14,882
|
|
$20,081
|
|
$26,329
|
Recovery of (provision for)
impairment
|
$303
|
|
-
|
|
($43,574)
|
|
-
|
Net
loss
|
($980)
|
|
($2,284)
|
|
($69,358)
|
|
($6,900)
|
|
|
|
|
|
|
|
|
Cash flow provided by operating
activities
|
$4,975
|
|
$6,787
|
|
$4,570
|
|
$9,963
|
Funds from
operations
|
$4,648
|
|
$5,350
|
|
$3,392
|
|
$6,861
|
Adjusted funds from
operations
|
$3,616
|
|
$4,213
|
|
$1,601
|
|
$4,664
|
|
|
|
|
|
|
|
|
Per common
share
|
|
|
|
|
|
|
|
‑
Funds from operations
|
$0.06
|
|
$0.13
|
|
$0.04
|
|
$0.17
|
‑
Adjusted funds from
operations
|
$0.05
|
|
$0.10
|
|
$0.02
|
|
$0.11
|
|
|
|
|
|
|
|
|
Weighted average number of shares
outstanding
|
77,995,220
|
|
41,198,983
|
|
77,944,116
|
|
41,132,182
|
|
|
|
|
|
|
|
|
Occupancy
|
61%
|
|
66%
|
|
56%
|
|
62%
|
ADR
|
$141.51
|
|
$144.34
|
|
$139.14
|
|
$143.91
|
RevPar
|
$86.33
|
|
$94.67
|
|
$78.52
|
|
$89.80
|
Operating Activities
- Occupancy and ADR ‑ The decrease in Same Property
operating income reflects the reduced ADR and occupancy levels
within the Fort McMurray and Other
Alberta segments, as a result of the unfavourable market conditions
continuing to affect oil‑dependent markets in Alberta as well as a result of wildfires and
mandatory evacuation, which led to a period of hotel closures due
to the repair and remediation of properties in Fort McMurray. In the second quarter of 2016,
the occupancy level of the Fort
McMurray and Other Alberta segments decreased by 21 and 5
percentage points, respectively, in comparison to the second
quarter of 2015. In addition, the ADR of the Fort McMurray and Other Alberta segments have
decreased by $2.28 and $6.57, respectively, in comparison to the second
quarter of 2015.
- Cash Provided by Operating Activities ‑ Cash provided by
operating activities decreased by $1.8
million during the second quarter of 2016, compared to the
second quarter of 2015. After excluding working capital
adjustments, cash provided by operating activities decreased by
$0.9 million, compared to 2015.
- Funds from Operations ("FFO") and Adjusted Funds from
Operations ("AFFO") ‑ During the second quarter of 2016, FFO
decreased by $0.7 million and AFFO
decreased by $0.6 million, compared
to the second quarter of 2015. On a basic per common share basis,
FFO and AFFO decreased by $0.07 per
common share and $0.05 per common
share, respectively, compared to the second quarter of 2015. The
decrease in FFO and AFFO mainly reflects a decrease in operating
income, due to the factors noted above.
- Net Loss ‑ Temple completed the second quarter of 2016
with a net loss of $1.0 million,
compared to a net loss of $2.3
million during the same period in 2015. The decrease in the
net loss is mainly due to a decrease in depreciation of
$2.4 million, and a decrease in net
interest expense of $1.1 million,
partially offset by a decrease in operating income of $1.9 million. On a per common share basis, the
net loss was $0.01 for the second
quarter of 2016, compared to a net loss per common share of
$0.06 during the second quarter of
2015.
- Asset Impairment ‑ The economic downturn in Alberta has resulted in decreased occupancy
levels and room rates for certain hotel properties. Evidence that
the occupancy and room rate declines may be prolonged, as well as
the lower common share trading price, mandated the completion of an
impairment review and recoverability analysis in accordance with
IFRS. As a result of the analysis, a non‑cash accounting adjustment
for asset impairment in the aggregate amount of $43.6 million on nine hotels in Alberta and three in Other Canada was recorded
in the first six months of 2016.
- Deferred Income Tax Asset – Temple has $30.9 million relating to temporary tax
differences that have not been recognized, as it is not probable
that the deferred income tax asset will be realized.
Liquidity and Financing Activities
As of June 30, 2016, the
unrestricted cash balance of Temple was $11.5 million and working capital was
$4.4 million.
- On June 30, 2016, Temple entered
into a revolving loan agreement with Morguard Corporation
("Morguard") for $6.0 million,
secured by a first mortgage charge against Nomad Hotel, and bearing
interest at prime plus 2.00%
- Dividend Policy ‑ In response to the economic downturn
in Alberta, in January 2016, the Company suspended the payment
of dividends in order to preserve liquidity and reduce debt.
- At June 30, 2016, the Company was
not in compliance with debt service covenants affecting 14 mortgage
loans in the aggregate amount of $201.4
million. The loan covenant breaches are expected to be
resolved by debt refinancings, loan modification agreements and/or
a waiver of the covenant requirements.
Investing Activities
Temple invested in hotel renovation programs with the objective
of enhancing the quality and competitive position of its hotel
properties through the second quarter of 2016. During the first six
months of 2016, capital expenditures on hotel properties amounted
to $4.2 million, of which
$3.1 million related to renovation
and upgrade programs at two properties. With major capital
expenditures programs substantially complete, capital expenditures
are expected to be lower than prior year during the remainder of
2016. Management believes that the major capital expenditures
programs, undertaken over the past several quarters, will serve to
enhance the competitive position of Temple's renovated hotel
properties.
ANALYSIS OF OPERATING RESULTS
Analysis of Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30
|
|
June 30
|
|
2016
|
|
2015
|
|
Increase/
(Decrease)
in Income
|
|
2016
|
|
2015
|
|
Increase/
(Decrease)
in Income
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$30,517
|
|
$35,307
|
|
($4,790)
|
|
$55,579
|
|
$66,681
|
|
($11,102)
|
|
Other hotel
revenue
|
11,438
|
|
12,589
|
|
(1,151)
|
|
22,142
|
|
24,772
|
|
(2,630)
|
|
Total
revenue
|
41,955
|
|
47,896
|
|
(5,941)
|
|
77,721
|
|
91,453
|
|
(13,732)
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating
costs
|
28,959
|
|
33,014
|
|
4,055
|
|
57,640
|
|
65,124
|
|
7,484
|
Hotel operating
income
|
12,996
|
|
14,882
|
|
(1,886)
|
|
20,081
|
|
26,329
|
|
(6,248)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
7,943
|
|
9,045
|
|
1,102
|
|
15,715
|
|
18,011
|
|
2,296
|
Share based
compensation
|
85
|
|
91
|
|
6
|
|
173
|
|
175
|
|
2
|
General and
administrative
expenses
|
|
|
|
|
|
|
|
|
|
|
|
865
|
|
829
|
|
(36)
|
|
1,673
|
|
1,820
|
|
147
|
Depreciation and
amortization
|
6,109
|
|
8,500
|
|
2,391
|
|
12,503
|
|
16,289
|
|
3,786
|
|
(2,006)
|
|
(3,583)
|
|
1,577
|
|
(9,983)
|
|
(9,966)
|
|
(17)
|
Equity income on investment
in
hotel
properties
|
|
|
|
|
|
|
|
|
|
|
|
317
|
|
433
|
|
(116)
|
|
478
|
|
538
|
|
(60)
|
Recovery of (provision
for)
impairment
|
|
|
|
|
|
|
|
|
|
|
|
303
|
|
-
|
|
303
|
|
(43,574)
|
|
-
|
|
(43,574)
|
Change in fair value of
financial
instruments: gain
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
68
|
|
(45)
|
|
90
|
|
66
|
|
24
|
Income tax recovery
(expense)
|
383
|
|
798
|
|
(415)
|
|
(16,369)
|
|
2,462
|
|
(18,831)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
($980)
|
|
($2,284)
|
|
$1,304
|
|
($69,358)
|
|
($6,900)
|
|
($62,458)
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Common Share
Results:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
($0.01)
|
|
($0.06)
|
|
|
|
($0.89)
|
|
($0.17)
|
|
|
Hotel Revenue
Analysis of Total Hotel
Revenues
|
|
Three Months Ended June
30
|
|
Six Months Ended June
30
|
|
|
|
|
Increase/
|
|
|
|
|
Increase/
|
|
2016
|
|
2015
|
|
(Decrease)
|
|
2016
|
|
2015
|
|
(Decrease)
|
Same
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fort
McMurray
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
4,748
|
|
$
|
7,511
|
|
$
|
(2,763)
|
|
$
|
8,890
|
|
$
|
15,428
|
|
$
|
(6,538)
|
|
Other hotel
revenue
|
|
634
|
|
|
628
|
|
|
6
|
|
|
1,226
|
|
|
1,183
|
|
|
43
|
|
$
|
5,382
|
|
$
|
8,139
|
|
$
|
(2,757)
|
|
$
|
10,116
|
|
$
|
16,611
|
|
$
|
(6,495)
|
Other
Alberta
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
5,679
|
|
$
|
6,477
|
|
$
|
(798)
|
|
$
|
10,500
|
|
$
|
12,733
|
|
$
|
(2,233)
|
|
Other hotel
revenue
|
|
4,699
|
|
|
4,759
|
|
|
(60)
|
|
|
9,512
|
|
|
10,110
|
|
|
(598)
|
|
$
|
10,378
|
|
$
|
11,236
|
|
$
|
(858)
|
|
$
|
20,012
|
|
$
|
22,843
|
|
$
|
(2,831)
|
Other
Canada
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
20,090
|
|
$
|
19,489
|
|
$
|
601
|
|
$
|
36,189
|
|
$
|
34,949
|
|
$
|
1,240
|
|
Other hotel
revenue
|
|
6,105
|
|
|
5,773
|
|
|
332
|
|
|
11,404
|
|
|
10,808
|
|
|
596
|
|
$
|
26,195
|
|
$
|
25,262
|
|
$
|
933
|
|
$
|
47,593
|
|
$
|
45,757
|
|
$
|
1,836
|
Total ‑ Same
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
30,517
|
|
$
|
33,477
|
|
$
|
(2,960)
|
|
$
|
55,579
|
|
$
|
63,110
|
|
$
|
(7,531)
|
|
Other hotel
revenue
|
|
11,438
|
|
|
11,160
|
|
|
278
|
|
|
22,142
|
|
|
22,101
|
|
|
41
|
|
Total hotel
revenue
|
$
|
41,955
|
|
$
|
44,637
|
|
$
|
(2,682)
|
|
$
|
77,721
|
|
$
|
85,211
|
|
$
|
(7,490)
|
Total ‑ Sold
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
-
|
|
$
|
1,830
|
|
$
|
(1,830)
|
|
$
|
-
|
|
$
|
3,571
|
|
$
|
(3,571)
|
|
Other hotel
revenue
|
|
-
|
|
|
1,429
|
|
|
(1,429)
|
|
|
-
|
|
|
2,671
|
|
|
(2,671)
|
|
Total hotel
revenue
|
$
|
-
|
|
$
|
3,259
|
|
$
|
(3,259)
|
|
$
|
-
|
|
$
|
6,242
|
|
$
|
(6,242)
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room
revenue
|
$
|
30,517
|
|
$
|
35,307
|
|
$
|
(4,790)
|
|
$
|
55,579
|
|
$
|
66,681
|
|
$
|
(11,102)
|
|
Other hotel
revenue
|
|
11,438
|
|
|
12,589
|
|
|
(1,151)
|
|
|
22,142
|
|
|
24,772
|
|
|
(2,630)
|
|
Total hotel
revenue
|
$
|
41,955
|
|
$
|
47,896
|
|
$
|
(5,941)
|
|
$
|
77,721
|
|
$
|
91,453
|
|
$
|
(13,732)
|
During the second quarter of 2016, room revenue decreased by
$4.8 million or 14%, compared to the
second quarter of 2015. The decrease reflects a decrease of
$3.0 million or 9% in Same Property
room revenue, and a decrease of $1.8
million due to the disposition of a property in 2015. The
decrease in Same Property room revenue is comprised of a
$2.8 million (37%) decrease in the
Fort McMurray portfolio and a
$0.8 million (12%) decrease in the
Other Alberta portfolio, partially offset by a $0.6 million (3%) increase in the Other Canada
portfolio.
The decrease in Same Property room revenue during the second
quarter of 2016, compared to the second quarter of 2015, is largely
due to the mandatory evacuation and subsequent repair and
remediation of properties as a result of the wildfire affecting the
Fort McMurray segment as well as
unfavourable market conditions affecting oil‑dependent markets in
the Other Alberta segment. The impact of these two segments on the
Same Property portfolio was partially offset by favourable market
conditions for the Other Canada segment which experienced a 3%
increase over the second quarter of 2015.
Insurance Recoveries
Temple maintains insurance coverage based on industry best
practices and insurance standards, and include Liability, Property,
Boiler and Machinery insurance programs that extend for Building,
Contents and Loss of Revenue.
On May 3, 2016, Fort McMurray and the surrounding areas were
placed under a mandatory evacuation due to uncontrolled wildfires
that extensively damaged the city. The evacuation order, which
ended on June 4, 2016, prompted the
closure, repair and environmental remediation of all the Company's
properties in Fort McMurray. The
Company's hotels sustained limited damage at eight of its nine
hotels. Certain hotels began receiving guests for emergency and
restoration services on May 5, 2016,
and eight hotels were reopened at various dates between
May 5, 2016 and June 10, 2016. The Radisson Hotel & Suites
sustained greater fire, smoke and water damage, and a full
assessment and action plan for repair and remediation is being
implemented. The Cortona lease revenues were not impacted by the
business interruption.
The events in Fort McMurray
will result in an insurance claim under the Company's business
interruption policy. Recoveries under this policy are only
recognized at the earlier of when proceeds have been received or
when confirmation has been given by the insurer of the amount of
any settlement. Because of the complex and uncertain nature of the
settlement negotiations process, the Company has not recognized any
provision in the financial statements for the three months ended
June 30, 2016.
Room Revenue Statistics
As disclosed in the following chart, RevPar for the Same
Property portfolio was $86.33 during
the second quarter ended 2016, compared to $94.95 during the second quarter ended 2015. For
the six months ended June 30, 2016,
RevPar for the Same Property portfolio was $78.52, compared to $89.90 for the six months ended June 30, 2015.
The decrease in RevPar for Same Property portfolio results
generally reflect reduced ADR and occupancy levels in the
Fort McMurray and Other Alberta
segments, partially offset by increased ADR in the Other Canada
segment.
Room Revenue
Statistics
|
|
|
Three Months Ended June
30
|
|
|
2016
|
|
2015
|
|
|
Occ
|
|
|
ADR
|
|
RevPar
|
|
Occ
|
|
|
ADR
|
|
RevPar
|
Same
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fort
McMurray
|
|
32%
|
|
$
|
171.20
|
|
$
|
55.24
|
|
53%
|
|
$
|
173.48
|
|
$
|
92.20
|
Other
Alberta
|
|
58%
|
|
$
|
127.46
|
|
$
|
73.97
|
|
63%
|
|
$
|
134.03
|
|
$
|
84.33
|
Other
Canada
|
|
73%
|
|
$
|
140.25
|
|
$
|
103.34
|
|
73%
|
|
$
|
138.33
|
|
$
|
100.22
|
Total – Same
Property
|
|
61%
|
|
$
|
141.51
|
|
$
|
86.33
|
|
66%
|
|
$
|
143.14
|
|
$
|
94.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold
Property
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
53%
|
|
$
|
169.85
|
|
$
|
89.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall
Portfolio
|
|
61%
|
|
$
|
141.51
|
|
$
|
86.33
|
|
66%
|
|
$
|
144.34
|
|
$
|
94.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Room Revenue
Statistics
|
|
|
Six Months Ended June
30
|
|
|
2016
|
|
2015
|
|
|
Occ
|
|
|
ADR
|
|
RevPar
|
|
Occ
|
|
|
ADR
|
|
RevPar
|
Same
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fort
McMurray
|
|
32%
|
|
$
|
161.29
|
|
$
|
51.47
|
|
54%
|
|
$
|
176.68
|
|
$
|
95.41
|
Other
Alberta
|
|
53%
|
|
$
|
128.73
|
|
$
|
68.38
|
|
62%
|
|
$
|
133.49
|
|
$
|
83.33
|
Other
Canada
|
|
67%
|
|
$
|
137.20
|
|
$
|
93.12
|
|
66%
|
|
$
|
135.82
|
|
$
|
90.36
|
Total – Same
Property
|
|
56%
|
|
$
|
139.14
|
|
$
|
78.52
|
|
63%
|
|
$
|
143.11
|
|
$
|
89.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold
Property
|
|
-
|
|
$
|
-
|
|
$
|
-
|
|
55%
|
|
$
|
159.65
|
|
$
|
88.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall
Portfolio
|
|
56%
|
|
$
|
139.14
|
|
$
|
78.52
|
|
62%
|
|
$
|
143.91
|
|
$
|
89.80
|
|
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 second quarter of 2016, other hotel revenue decreased
by $1.2 million or 9%, compared to
the second quarter of 2015, comprised of a decrease of $1.4 million from the Sold Property and a
decrease of $0.1 million from the
Other Alberta properties, partially offset by a $0.3 million increase in the Other Canada
portfolio. The decrease in other revenue for the Other Alberta
portfolio mainly reflects decreased economic activity in hotel
markets that are directly or indirectly related to the oil
industry.
Notwithstanding the above, the Sheraton Red Deer was the most
significant contributor to other hotel revenue in the Same Property
portfolio during the second quarter of 2016, accounting for
$3.5 million or 31% of other hotel
revenue.
During the first six months of 2016, other hotel revenue
decreased by $2.6 million or 11%,
compared to the first six months of 2015, comprised of a decrease
of $2.7 million from the Sold
Property and a decrease of $0.6
million from the Other Alberta properties, partially offset
by a $0.6 million increase in the
Other Canada portfolio.
Operating Income and Profit Margin
Operating Income and Profit
Margin
|
|
|
|
|
|
|
Three Months Ended June
30
|
|
Six Months Ended June
30
|
|
Operating
Income
|
|
Operating Profit
Margin
|
|
Operating
Income
|
|
Operating Profit
Margin
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Same
Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fort
McMurray
|
$2,650
|
|
$4,192
|
|
49%
|
|
52%
|
|
$3,966
|
|
$8,446
|
|
39%
|
|
51%
|
Other
Alberta
|
$2,092
|
|
$2,255
|
|
20%
|
|
20%
|
|
$3,622
|
|
$5,037
|
|
18%
|
|
22%
|
Other
Canada
|
$8,254
|
|
$7,972
|
|
32%
|
|
32%
|
|
$12,493
|
|
$12,204
|
|
26%
|
|
27%
|
Total ‑ Same
Property
|
$12,996
|
|
$14,419
|
|
31%
|
|
32%
|
|
$20,081
|
|
$25,687
|
|
26%
|
|
30%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold
Property
|
$ -
|
|
$463
|
|
-
|
|
14%
|
|
$ -
|
|
$642
|
|
-
|
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
portfolio
|
$12,996
|
|
$14,882
|
|
31%
|
|
31%
|
|
$20,081
|
|
$26,329
|
|
26%
|
|
29%
|
After accounting for the decrease in total revenues and the
decrease in hotel operating costs, total operating income decreased
by $1.9 million or 13% during the
second quarter of 2016, compared to the second quarter of 2015,
comprised of a decrease of $1.4
million or 10% for the Same Property portfolio and a
decrease of $0.5 million from Sold
Property. The decrease in Same Property operating income mostly
reflects a $1.5 million, or 37%,
decrease in operating income for the Fort
McMurray segment. The operating profit margin within the
Fort McMurray segment declined to
49% during the second quarter of 2016, compared to 52% during the
second quarter of 2015, due to certain fixed costs, such as
property taxes and full time salary employees, that continued to be
expensed during the evacuation period, when certain hotels were
closed to the general public, until the mandatory evacuation period
was lifted on June 4, 2016.
For the first six months of 2016, total operating income
decreased by $6.2 million, or 24%,
compared to the first six months of 2015, comprised of a decrease
of $5.6 million or 22% for the Same
Property portfolio and a decrease of $0.6
million from Sold Property. The decrease in Same Property
operating income reflects a $4.5
million, or 53%, decrease in operating income for the
Fort McMurray segment and a
$1.4 million, or 28%, decrease in
operating income for the Other Alberta segment.
As disclosed in the preceding chart, the overall profit margin
of the entire hotel portfolio was 31% for both the second quarters
of 2016 and 2015. For the six months ended June 30, 2016, the overall profit margin was 26%,
compared to 29% for the six months ended June 30, 2015.
Transfer of Asset Management Agreement
Effective April 1, 2016, Morguard
Corporation provides asset management services to the Company,
replacing Shelter Canadian Properties Limited. Morguard has a
highly qualified management team with years of experience in real
estate investment and development activities and in the asset
management and property management industry. The Chairman and Chief
Executive Officer of Morguard, Mr. K. Rai
Sahi, serves as Chief Executive Officer of the Company. Mr.
Paul Miatello, the Chief Financial
Officer of Morguard, serves as the Chief Financial Officer of the
Company. Morguard's total assets owned and under management in
North America are valued at
$19.4 billion.
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.C, 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.